STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,
SELLER
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
TRUSTEE
and
EMC MORTGAGE CORPORATION
--------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2002
--------------------------------------------------------------
Structured Asset Mortgage Investments Inc.
Bear ▇▇▇▇▇▇▇ ARM Trust, Mortgage Pass-Through Certificates
Series 2002-6
TABLE OF CONTENTS
Page
ARTICLE I
Definitions..............................................................................................2
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates.......................................................................24
Section 2.01 CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE......................................24
Section 2.02 ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE......................................26
Section 2.03 ASSIGNMENT OF INTEREST IN THE MORTGAGE
LOAN PURCHASE AGREEMENT......................................................28
Section 2.04 SUBSTITUTION OF MORTGAGE LOANS...............................................29
Section 2.05 ISSUANCE OF CERTIFICATES.....................................................30
Section 2.06 REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER.........................30
ARTICLE III
Administration and Servicing of Mortgage Loans..........................................................32
Section 3.01 SERVICER.....................................................................32
Section 3.02 REMIC-RELATED COVENANTS......................................................32
Section 3.03 RELEASE OF MORTGAGE FILES....................................................33
Section 3.04 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION........................33
Section 3.05 EMC..........................................................................34
Section 3.06 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS................................34
ARTICLE IV
Accounts................................................................................................35
Section 4.01 DISTRIBUTION ACCOUNT.........................................................35
Section 4.02 PERMITTED WITHDRAWALS AND TRANSFERS
FROM THE DISTRIBUTION ACCOUNT................................................36
ARTICLE V
Certificates............................................................................................37
Section 5.01 CERTIFICATES.................................................................37
Section 5.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES........................41
Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES............................45
Section 5.04 PERSONS DEEMED OWNERS........................................................45
Section 5.05 TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES...............................45
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Section 5.06 RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES..............................47
Section 5.07 ERISA RESTRICTIONS...........................................................47
Section 5.08 RULE 144A INFORMATION........................................................48
ARTICLE VI
Payments to Certificateholders..........................................................................49
Section 6.01 DISTRIBUTIONS ON THE CERTIFICATES............................................49
Section 6.02 ALLOCATION OF LOSSES.........................................................50
Section 6.03 PAYMENTS.....................................................................52
Section 6.04 STATEMENTS TO CERTIFICATEHOLDERS.............................................52
Section 6.05 MONTHLY ADVANCES.............................................................54
Section 6.06 COMPENSATING INTEREST PAYMENTS...............................................55
Section 6.07 SURETY BOND..................................................................55
ARTICLE VII
The Servicer............................................................................................56
Section 7.01 INDEMNIFICATION OF THE TRUSTEE...............................................56
Section 7.02 SUCCESSOR SERVICER...........................................................56
ARTICLE VIII
Default.................................................................................................57
Section 8.01 EVENTS OF DEFAULT............................................................57
Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.....................................57
Section 8.03 NOTIFICATION TO CERTIFICATEHOLDERS...........................................58
Section 8.04 WAIVER OF DEFAULTS...........................................................58
Section 8.05 LIST OF CERTIFICATEHOLDERS...................................................58
ARTICLE IX
Concerning the Trustee..................................................................................59
Section 9.01 DUTIES OF TRUSTEE............................................................59
Section 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE........................................61
Section 9.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS........................62
Section 9.04 TRUSTEE MAY OWN CERTIFICATES.................................................63
Section 9.05 TRUSTEE FEES AND EXPENSES....................................................63
Section 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.........................................63
Section 9.07 INSURANCE....................................................................64
Section 9.08 RESIGNATION AND REMOVAL OF THE TRUSTEE.......................................64
Section 9.09 SUCCESSOR TRUSTEE............................................................64
Section 9.10 MERGER OR CONSOLIDATION OF TRUSTEE...........................................65
Section 9.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE................................65
Section 9.12 FEDERAL INFORMATION RETURNS AND
REPORTS TO CERTIFICATEHOLDERS; REMIC ADMINISTRATION..........................66
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ARTICLE X
Termination.............................................................................................68
Section 10.01 TERMINATION UPON REPURCHASE
BY THE SELLER OR ITS DESIGNEE OR LIQUIDATION
OF THE MORTGAGE LOANS........................................................68
Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS..........................................70
ARTICLE XI
Miscellaneous Provisions................................................................................72
Section 11.01 INTENT OF PARTIES............................................................72
Section 11.02 AMENDMENT....................................................................72
Section 11.03 RECORDATION OF AGREEMENT.....................................................73
Section 11.04 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...................................73
Section 11.05 ACTS OF CERTIFICATEHOLDERS...................................................74
Section 11.06 GOVERNING LAW................................................................75
Section 11.07 NOTICES......................................................................75
Section 11.08 SEVERABILITY OF PROVISIONS...................................................75
Section 11.09 SUCCESSORS AND ASSIGNS.......................................................75
Section 11.10 ARTICLE AND SECTION HEADINGS.................................................75
Section 11.11 COUNTERPARTS.................................................................76
Section 11.12 NOTICE TO RATING AGENCIES....................................................76
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EXHIBITS
Exhibit A-1 - Form of Class A Certificates
Exhibit A-2 - Form of Class X Certificates
Exhibit A-3 - Form of Class B Certificates
Exhibit A-4 - 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-1 - Servicing Agreement
Exhibit G-2 - Underlying Purchase Agreement
Exhibit H - Assignment, Assumption and Recognition Agreement
Exhibit I - Mortgage Loan Purchase Agreement
Exhibit J-1 - Form of Initial Certification
Exhibit J-2 - Form of Interim Certification
Exhibit J-3 - Form of Final Certification
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POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of May 1, 2002, among
Structured Asset Mortgage Investments Inc., a Delaware corporation, as seller
(the "Seller"), ▇▇▇▇▇ Fargo Bank Minnesota, National Association, a national
banking association, not in its individual capacity but solely as trustee (the
"Trustee"), 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 interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC II to be treated for federal income tax purposes as a
REMIC. On the Startup Day, all the Classes of REMIC II Regular Certificates will
be designated "regular interests" in such REMIC and the Class R-II Certificate
will be designated the "residual interests" 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 $497,353,626. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance.
In consideration of the mutual agreements herein contained, the Seller,
EMC and the Trustee agree as follows:
ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
ACCRUED CERTIFICATE INTEREST: For any Certificate for any Distribution
Date, the interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the Current Principal Amount or Notional Amount,
as applicable, of such Certificate immediately prior to such Distribution Date,
calculated on the basis of a 360-day year consisting of twelve 30-day months,
less (i) in the case of a Senior Certificate, such Certificate's share of any
Net Interest Shortfall and, after the Cross-Over Date, the interest portion of
any Realized Losses on the Mortgage Loans allocated thereto in accordance with
Section 6.02(g) and (ii) in the case of a Senior Mezzanine or Subordinate
Certificate, such Certificate's share of any Net Interest Shortfall and the
interest portion of any Realized Losses on the Mortgage Loans allocated thereto
in accordance with Section 6.02(g).
AFFILIATE: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
ALLOCABLE SHARE: With respect to each Class of Senior Mezzanine and
Subordinate Certificates:
(a) as to any Distribution Date and amounts distributable pursuant to
clauses (i) and (iii) of the definition of Senior Mezzanine and Subordinate
Optimal Principal Amount, the fraction, expressed as a percentage, the numerator
of which is the Current Principal Amount of such Class and the denominator of
which is the aggregate Current Principal Amount of all Classes of the Senior
Mezzanine and Subordinate Certificates; and
(b) as to any Distribution Date and amounts distributable pursuant to
clauses (ii), (iv) and (v) of the definition of Senior Mezzanine and Subordinate
Optimal Principal Amount,
(1) for any Distribution Date on which the Senior
Mezzanine Loss and Delinquency Test has been
satisfied, as to each Class of Senior Mezzanine and
Subordinate Certificates (other than the Senior
Mezzanine Certificates, or if the Current Principal
Amount of the Senior Mezzanine Certificates has been
reduced to zero, the Class of Subordinate
Certificates having the lowest
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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 Senior Mezzanine and 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 Senior Mezzanine or
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 Senior Mezzanine
Certificates, or if the Current Principal Amount of
the Senior Mezzanine Certificates has been reduced to
zero, the Class of Subordinate Certificates having
the lowest numerical designation and to the
Subordinate Certificates which satisfy the related
Class Prepayment Distribution Trigger in reduction of
their respective Current Principal Amounts, for to
the Senior Mezzanine Certificates and then to the
Subordinate Certificates in the order of their
numerical Class designations; and
(2) for any Distribution Date on which the Senior
Mezzanine Loss and Delinquency Test has not been
satisfied, as to the Senior Mezzanine Certificates,
100%, and as to the Subordinate Certificates, 0%;
provided that if on a Distribution Date, the Current
Principal Amount of the Senior Mezzanine Certificates
is reduced to zero, any remaining amounts distributed
pursuant to this clause (b)(2) shall be distributed
to the Classes of Subordinate Certificates which
satisfy the related Class Prepayment Distribution
Trigger and to the Class of Subordinate Certificates
having the lowest numerical designation in reduction
of their respective Current Principal Amounts in the
order of their numerical Class designations.
APPLICABLE CREDIT RATING: For any long-term deposit or security, a
credit rating of AAA in the case of S&P or Aaa in the case of ▇▇▇▇▇'▇. 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 ▇▇▇▇▇'▇.
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 Trustee
by either (i) an Opinion of Counsel reasonably acceptable to the Trustee
delivered to it by the Servicer or the Seller, or (ii) written notice from the
appropriate taxing authority as to the applicability of such state law.
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APPRAISED VALUE: For any Mortgaged Property related to a Mortgage Loan,
the amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT: The assignment,
assumption and recognition agreement, dated May 31, 2002, among EMC, the Trustee
and the Servicer, attached hereto as Exhibit H, whereby the Servicing Agreement
and the Underlying Purchase Agreement were assigned to the Trustee for the
benefit of the Certificateholders.
ASSUMED FINAL DISTRIBUTION DATE: June 25, 2032, or if such day is not a
Business Day, the next succeeding Business Day.
AVAILABLE FUNDS: With respect to any Distribution Date, an amount equal
to the aggregate of the following amounts with respect to the Mortgage Loans:
(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 Servicer with respect to such Distribution Date, (c) any other
miscellaneous amounts remitted by the Servicer pursuant to the Servicing
Agreement and (d) any reimbursed amount in connection with losses on investments
of deposits in an account, except:
(i) all payments that were due on or before the Cut-off Date;
(ii) all Principal Prepayments and Liquidation Proceeds
received after the applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or dates
subsequent to the related Due Date;
(iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which, and to the
extent that, there are any unreimbursed Monthly Advances;
(v) amounts representing Monthly Advances determined to be
Nonrecoverable Advances;
(vi) any investment earnings on amounts on deposit in the
Distribution Account and amounts permitted to be withdrawn from the
Distribution Account pursuant to this Agreement;
(vii) to pay the Servicing Fees or to reimburse the Servicer
for such amounts as are due under the applicable Servicing Agreement
and the Agreement and have not been retained by or paid to the
Servicer; and
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(viii) and any expenses, fees, liabilities, or other amounts
incurred by and reimbursable to the Trustee pursuant to this Agreement.
AVERAGE LOSS SEVERITY: With respect to any period, the fraction
obtained by dividing (x) the aggregate amount of Realized Losses for the
Mortgage Loans for such period by (y) the number of 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. ss.ss.101-1330.
BOOK-ENTRY CERTIFICATES: Initially, all Classes of Certificates other
than the Private Certificates and the Residual Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange or Federal Reserve is closed or on
which banking institutions in the jurisdiction in which the Trustee or the
Servicer are authorized or obligated by law or executive order to be closed.
CALENDAR QUARTER: January 1 to March 31, April 1 to June 30, July 1 to
September 30, or October 1 to December 31, as applicable.
CERTIFICATE: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibits ▇-▇, ▇-▇, ▇-▇ and
A-4 with the blanks therein appropriately completed.
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.
CLASS: With respect to the Certificates, ▇-▇, ▇-▇, X, R-I, R-II, ▇-▇,
▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, B-6.
CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Senior Mezzanine
or 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 Senior Mezzanine or Subordinate Certificates subordinate
thereto, if any, and the denominator of which is the aggregate Scheduled
Principal Balance of all of the Mortgage Loans as of the related Due Date,
equals or exceeds such percentage calculated as of the Closing Date.
CLASS R CERTIFICATES: The Class R-I and Class R-II Certificates.
CLOSING DATE: May 31, 2002.
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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 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
CORRESPONDING CERTIFICATE: With respect to (i) REMIC I Regular ▇▇▇▇▇▇▇▇
▇▇-▇▇, (ii) REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, (iii) REMIC I Regular ▇▇▇▇▇▇▇▇
▇▇-▇▇, (iv) REMIC I Regular Interest LT- B1, (v) REMIC I Regular Interest LT-B2,
(vi) REMIC I Regular Interest LT-B3, (vii) REMIC I Regular Interest LT-B4,
(viii) REMIC I Regular Interest LT-B5, (ix) REMIC I Regular Interest LT- B6 and
(x) REMIC I Regular Interest LT-R, (i) the Class A-1 Certificates, (ii) the
Class A-2 Certificates, (iii) the Class A-3 Certificates, (iv) the Class B-1
Certificates, (v) Class B-2 Certificates, (vi) Class B-3 Certificates, (vii)
Class B-4 Certificates, (viii) Class B-5 Certificates, (ix) Class B-6
Certificates and (x) Class R-II Certificates, respectively.
CROSS-OVER DATE: The first Distribution Date on which the aggregate
Current Principal Amount of the Senior Mezzanine and Subordinate Certificates
has been reduced to zero (after giving effect to all distributions on such
Distribution Date).
CURRENT PRINCIPAL AMOUNT: With respect to any Certificate (other than
an Interest Only 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 Subordinate Certificate, such Certificate's
pro rata share, if any, of the applicable Subordinate Certificate Writedown
Amount for previous Distribution Dates and (iv) in the case of a Senior
Mezzanine Certificate, such Certificate's PRO RATA share, if any, of the
applicable Senior Mezzanine Certificate Writedown Amount for previous
Distribution Dates . With respect to any Class of Certificates (other than an
Interest Only Certificate), 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 and Class
R-II 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.
CUT-OFF DATE: May 1, 2002.
CUT-OFF DATE BALANCE: $497,353,626.15.
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.
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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 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 ▇▇▇▇▇▇▇ 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 4.02, which shall be denominated "▇▇▇▇▇ Fargo
Bank Minnesota, National Association, as Trustee f/b/o holders of Structured
Asset Mortgage Investments Inc., Bear ▇▇▇▇▇▇▇ ARM Trust, Mortgage Pass-Through
Certificates, Series 2002-6 - Distribution Account."
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.
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DTC CUSTODIAN: ▇▇▇▇▇ Fargo Bank Minnesota, 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 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 if
rated 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 (i)) delivered to the Trustee prior to the establishment of such account,
the Certificateholders will have a claim with respect to the funds in such
account and a perfected first priority security interest against any collateral
(which shall be limited to Permitted Investments, each of which shall mature not
later than the Business Day immediately preceding the Distribution Date next
following the date of investment in such collateral or the Distribution Date if
such Permitted Investment is an obligation of the institution that maintains the
Protected Account or 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 Protected Account or the Distribution Account will
not have an adverse effect on the then-current ratings assigned to the Classes
of the Certificates then rated by the Rating Agencies). Eligible Accounts may
bear interest.
EMC: EMC Mortgage Corporation.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
EVENT OF DEFAULT: An event of default described in Section 9.01 of the
Servicing Agreement.
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.
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▇▇▇▇▇▇ ▇▇▇: 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 J-3 to this Agreement hereto.
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,
(ii) an Interest Only Certificate will be deemed to equal 1.0% multiplied by a
fraction, the numerator of which is the Notional Amount of such Certificate and
the denominator of which is the aggregate Notional Amount of such respective
Class and (iii) a Certificate of any other Class will be deemed to equal 98.50%
multiplied by a fraction, the numerator of which is the Current Principal Amount
of such Certificate and the denominator of which is the aggregate Current
Principal Amount of all the Certificates.
▇▇▇▇▇▇▇ MAC: ▇▇▇▇▇▇▇ 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).
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.
HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 12.02(b) and 12.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller, the 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. The Trustee may
conclusively rely upon a certificate of the Seller or the Servicer in
determining whether a Certificate is held by an Affiliate thereof.
INDEMNIFIED PERSONS: The Trustee and their officers, directors, agents
and employees and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.
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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 Servicer
and of any Affiliate of the Seller or the Servicer, (b) does not have any direct
financial interest or any material indirect financial interest in the Seller or
the Servicer or any Affiliate of the Seller or the Servicer and (c) is not
connected with the Seller or the 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 J-1 hereto.
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 ONLY CERTIFICATES: Class X Certificates.
INTEREST SHORTFALL: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:
(a) Partial principal prepayments received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the amount of such 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
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Balance of such Mortgage Loan immediately prior to such prepayment and (ii) the
amount of interest for the calendar month of such prepayment (adjusted to the
applicable Net Rate) received at the time of such prepayment; and
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan, the
excess of (i) 30 days' interest (or, in the case of a principal prepayment in
full, interest to the date of prepayment) on the Scheduled Principal Balance
thereof (or, in the case of a principal prepayment in part, on the amount so
prepaid) at the related Net Rate over (ii) 30 days' interest (or, in the case of
a principal prepayment in full, interest to the date of prepayment) on such
Scheduled Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the Net Rate required to be paid by the Mortgagor
as limited by application of the Relief Act.
INTERIM CERTIFICATION: The certification substantially in the form of
Exhibit J-2 hereto.
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
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 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 Servicer,
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-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.
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.
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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.
MLCC: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation, or its successor in interest.
MONTHLY ADVANCE: An advance of principal or interest required to be
made by the Servicer pursuant to the Servicing Agreement or the Trustee pursuant
to Section 6.05.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in interest.
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 May 31, 2002, between EMC, as seller, and Structured Asset Mortgage
Investments Inc., as purchaser, and all amendments thereof and supplements
thereto, attached as Exhibit I.
MORTGAGE LOAN SCHEDULE: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.
MORTGAGE LOAN SELLER: EMC Mortgage Corporation, as mortgage loan seller
under the Mortgage Loan Purchase Agreement.
MORTGAGE NOTE: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
MORTGAGED PROPERTY: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
MORTGAGOR: The obligor on a Mortgage Note.
NET INTEREST SHORTFALL: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
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NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the Servicer in accordance with the Servicing Agreement or this Agreement and
(ii) unreimbursed advances by the 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.
NONRECOVERABLE ADVANCE: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Servicer or the Trustee (as
successor Servicer) and (ii) which, in the good faith judgment of the Servicer
or the Trustee, will not or, in the case of a proposed advance or Monthly
Advance, would not, be ultimately recoverable by the Servicer or the Trustee (as
successor Servicer) from Liquidation Proceeds, Insurance Proceeds or future
payments on the Mortgage Loan for which such advance or Monthly Advance was
made.
NOTIONAL AMOUNT: On any Distribution Date, the Notional Amount of the
Class X Certificates is equal to the Current Principal Amount of the Class A-1
Certificates; provided, however, for federal income tax purposes such Notional
Amount shall be the equivalent of the foregoing, expressed as the Uncertificated
Principal Balance of REMIC I Regular Interest LT-1A.
OFFERED CERTIFICATE: Any Senior Certificate, Senior Mezzanine
Certificate or Offered Subordinate Certificate.
OFFERED SUBORDINATE CERTIFICATES: The Class ▇-▇, Class B-2 and Class
B-3 Certificates.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the 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 Servicer
or the Seller.
ORIGINAL SENIOR MEZZANINE AND SUBORDINATE PRINCIPAL BALANCE: The
aggregate Current Principal Amount of the Senior Mezzanine and Subordinate
Certificates as of the Closing Date.
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.
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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, the rate of
interest determined as provided with respect thereto, in Section 5.01(d). Any
monthly calculation of interest at a stated rate shall be based upon annual
interest at such rate divided by twelve.
PERIODIC RATE CAP: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
PERMITTED INVESTMENTS: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely payment
of which are fully guaranteed by the United States of America or any
agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof (including the Trustee or the 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) 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;
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(v) 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
(vi) 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 Servicer or any affiliate of the
Trustee or 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.
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 the purchase price in connection with any purchase of a Mortgage Loan, any
cash deposit in connection with the substitution of a Mortgage Loan, and the
principal portion of Net Liquidation Proceeds.
PRIVATE CERTIFICATES: Any Class B-4, Class B-5 and Class B-6
Certificate.
PROTECTED ACCOUNT: An account established and maintained for the
benefit of Certificateholders by the Servicer with respect to the related
Mortgage Loans and with respect to REO Property in accordance with the Servicing
Agreement.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
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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 Servicer, so long as the claims paying
ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
RATING AGENCIES: S&P and ▇▇▇▇▇'▇.
REALIZED LOSS: Any (i) Deficient Valuation or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation, less (y) the related Net
Liquidation Proceeds with respect to such Mortgage Loan.
RECORD DATE: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.
REINVESTMENT AGREEMENTS: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
RELIEF ACT MORTGAGE LOAN: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC I: That group of assets contained in the Trust Fund designated as
a REMIC consisting of (i) the Mortgage Loans, (ii) the Protected Accounts, (iii)
any REO Property relating to the Mortgage Loans, (iv) the rights with respect to
the Servicing Agreement, (v) the rights with respect to the Assignment,
Assumption and Recognition Agreement 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 II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I Regular Interests.
REMIC II CERTIFICATES: The REMIC II Regular Certificates and the Class
R-II Certificates.
REMIC II REGULAR CERTIFICATES: As defined in Section 5.01(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 or REMIC II to fail to qualify as a REMIC while any regular
interest in such REMIC is outstanding, (ii) result in a tax on prohibited
transactions with respect to 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 (A) repurchased by the Underlying
Seller, the "Purchase Price" as provided in the Underlying Purchase Agreement or
(B) repurchased by the Mortgage Loan Seller pursuant to the Mortgage Loan
Purchase Agreement or Article II of this Agreement or by EMC pursuant to Section
3.06 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 Servicing Compensation,
Monthly Advances and advances payable to the purchaser of the Mortgage Loan.
REQUEST FOR RELEASE: A request for release in the form attached hereto
as Exhibit D.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.
RESIDUAL CERTIFICATES: 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.
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S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.,
and its successors in interest.
SCHEDULED PAYMENT: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.
SCHEDULED PRINCIPAL: The principal portion of any Scheduled Payment.
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any moratorium or similar waiver or grace
period) 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 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
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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 B-4, Class B-5 and Class 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, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇
95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY
DUTIES ON THE PART OF THE SELLER, THE SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL
TO SUCH EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL ACCREDITED INVESTOR].
SECURITY INSTRUMENT: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed, including
any riders or addenda thereto.
SELLER: Structured Asset Mortgage Investments Inc., a Delaware
corporation, or its successors in interest.
SENIOR CERTIFICATES: The Class A-1, Class A-2, Class X, Class R-I and
Class R-II Certificates.
SENIOR MEZZANINE CERTIFICATES: The Class A-3 Certificates.
SENIOR MEZZANINE CERTIFICATE WRITEDOWN AMOUNT: As to any Distribution
Date on or after which the aggregate Current Principal Amount of the Subordinate
Certificates has been reduced to zero, the amount by which (a) the sum of the
Current Principal Amounts of all the Certificates (after giving effect to the
distribution of principal and the allocation of applicable Realized Losses in
reduction of the Current Principal Amounts of such Certificates on such
Distribution Date) exceeds (b) the aggregate Scheduled Principal Balance of the
Mortgage Loans on the Due Date related to such Distribution Date.
SENIOR MEZZANINE LOSS AND DELINQUENCY TEST: On any Distribution Date,
the 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 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 Senior Mezzanine and Subordinate Certificates does not
exceed 100%; and (B) cumulative Realized Losses on the Mortgage Loans do not
exceed (a) 30% of the Original Senior Mezzanine and Subordinate Principal
Balance if such Distribution Date occurs between and including June 2009 and May
2010, (b) 35% of the Original Senior Mezzanine and Subordinate Principal Balance
if such
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Distribution Date occurs between and including June 2010 and May 2011, (c) 40%
of the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs between and including June 2011 and May 2012, (d) 45%
of the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs between and including June 2012 and May 2013, and (e)
50% of the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs during or after June 2013.
SENIOR MEZZANINE AND SUBORDINATE PERCENTAGE: On any Distribution Date,
100% minus the Senior Percentage.
SENIOR MEZZANINE AND SUBORDINATE PREPAYMENT PERCENTAGE: With respect to
the Mortgage Loans, on any Distribution Date, 100% minus the Senior Prepayment
Percentage, except that on any Distribution Date after the Current Principal
Amounts of the Senior Certificates (other than the Interest Only Certificates)
have each been reduced to zero, the Senior Mezzanine and Subordinate Prepayment
Percentage will equal 100%.
SENIOR OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date, an amount
equal to the sum, without duplication, of:
(i) the applicable Senior Percentage of the principal portion
of all Monthly Payments due on the Mortgage Loans on the related Due
Date, as specified in the amortization schedule at the time applicable
thereto (after adjustment for previous principal prepayments but before
any adjustment to such amortization schedule by reason of any
bankruptcy or similar proceeding or any moratorium or similar waiver or
grace period);
(ii) the applicable Senior Prepayment Percentage of the
Scheduled Principal Balance of each Mortgage Loan which was the subject
of a prepayment in full received by the Servicer during the applicable
Prepayment Period (as defined below);
(iii) the applicable Senior Prepayment Percentage of all
partial prepayments allocated to principal received during the
applicable Prepayment Period; and
(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 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
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 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 that was purchased by an insurer from the Trustee during
the related Prepayment Period pursuant to the related Primary Mortgage
Insurance Policy, if any or otherwise; and the applicable Senior
Prepayment Percentage of the sum of (a) the Scheduled Principal Balance
of each Mortgage Loan which was repurchased by HSBC or the
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Mortgage Loan Seller in connection with such Distribution Date and (b)
the excess, if any, of the Scheduled Principal Balance of a Mortgage
Loan 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.
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 Senior
Certificates immediately preceding such Distribution Date by the aggregate
Scheduled Principal Balance of the Mortgage Loans as of the beginning of the
related Due Period.
SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date occurring during
the periods set forth below, as follows:
Period (dates inclusive) Senior Prepayment Percentage
----------------------------------------------------- -------------------------------------------------------------
June 25, 2002 - May 25, 2009 100%
June 25, 2009 - May 25, 2010 Senior Percentage plus 70% of the Senior
Mezzanine and Subordinate Percentage
June 25, 2010 - May 25, 2011 Senior Percentage plus 60% of the Senior
Mezzanine and Subordinate Percentage
June 25, 2011 - May 25, 2012 Senior Percentage plus 40% of the Senior
Mezzanine and Subordinate Percentage
June 25, 2012 - May 25, 2013 Senior Percentage plus 20% of the Senior
Mezzanine and Subordinate Percentage
June 25, 2013 and thereafter Senior Percentage
In addition, no reduction of the Senior Prepayment Percentage shall
occur on any Distribution Date unless, as of the last day of the month preceding
such Distribution Date, (A) the aggregate Scheduled Principal Balance of the
Mortgage Loans delinquent 60 days or more (including for this purpose any such
Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount of
the Senior Mezzanine Certificates and Subordinate Certificates, does not exceed
50%; and (B) cumulative Realized Losses on the Mortgage Loans do not exceed (a)
30% of the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs between and including June 2009 and May 2010, (b) 35%
of the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs between and including June 2010 and May 2011, (c) 40%
of the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs between and including June 2011 and May 2012, (d) 45%
of the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs between and including June 2012 and May 2013, and (e)
50% of the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs during or after June 2013.
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In addition, if the current Senior Mezzanine and Subordinate Percentage
is equal to or greater than two times the initial Senior Mezzanine and
Subordinate Percentage for the Certificates, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and 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 Senior Mezzanine and Subordinate Certificates,
does not exceed 50% and (b)(i) prior to the Distribution Date in June 2005,
cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the
Original Senior Mezzanine and Subordinate Principal Balance and (ii) on or after
the Distribution Date in June 2005 cumulative Realized Losses on the Mortgage
Loans do not exceed 30% of the Original Senior Mezzanine and Subordinate
Principal Balance, then, in each case, the Senior Prepayment Percentage for such
Distribution Date will equal the Senior Percentage; provided, however, if the
current Senior Mezzanine and Subordinate Percentage for the Certificates is
equal to or greater than two times the initial Senior Mezzanine and Subordinate
Percentage for the Certificates prior to June 25, 2005 and the above delinquency
and loss tests are met, then the Senior Prepayment Percentage for such
Distribution Date will equal the Senior Percentage plus 50% of the Senior
Mezzanine and Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Senior
Percentage exceeds the Senior Percentage as of the Cut-Off Date, the Senior
Prepayment Percentage for such Distribution Date will equal 100%. On the
Distribution Date on which the aggregate Current Principal Amount of the Senior
Certificates is reduced to zero, the Senior Prepayment Percentage shall be the
minimum percentage sufficient to effect such reduction and thereafter shall be
zero.
SERVICER: As of the Closing Date, HSBC Mortgage Corporation (USA) and,
thereafter, its respective successors in interest who meet the qualifications of
the Servicing Agreement and this Agreement.
SERVICER REMITTANCE DATE: With respect to each Mortgage Loan, the 18th
day of each month, or if such 18th day is not a Business Day, the first Business
Day immediately following such 18th day.
SERVICING AGREEMENT: The Purchase, Warranties and Servicing Agreement,
dated as of May 1, 2002, between EMC and HSBC, attached hereto as Exhibit H-1.
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: May 31, 2002.
SUBORDINATE CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.
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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 Senior Mezzanine and
Subordinate Certificates immediately prior to such Distribution Date):
(i) the applicable Senior Mezzanine and Subordinate Percentage
of the principal portion of all Monthly Payments due on each 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 Senior Mezzanine and Subordinate
Prepayment Percentage of the Scheduled Principal Balance of each
Mortgage Loan which was the subject of a prepayment in full received by
the Servicer during the applicable Prepayment Period;
(iii) the applicable Senior Mezzanine and Subordinate
Prepayment Percentage of all partial prepayments of principal received
during the applicable Prepayment Period for each Mortgage Loan ;
(iv) the excess, if any, of (a) the Net Liquidation Proceeds
allocable to principal received during the related Prepayment Period in
respect of each Liquidated Mortgage Loan over (b) the sum of the
amounts distributable to the Senior Certificateholders pursuant to
clause (iv) of the definition of Senior Optimal Principal Amount on
such Distribution Date;
(v) the applicable Senior Mezzanine and Subordinate Prepayment
Percentage of the sum of (a) the Scheduled Principal Balance of each
Mortgage Loan which was repurchased by HSBC or the Mortgage Loan Seller
in connection with such Distribution Date and (b) the difference, if
any, between the Scheduled Principal Balance of a Mortgage Loan that
has been replaced by HSBC or the Mortgage Loan Seller with a substitute
Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement in
connection with such Distribution Date and the Scheduled Principal
Balance of such substitute Mortgage Loan; and
(vi) on the Distribution Date on which the Current Principal
Amounts of the Senior Certificates (other than the Interest Only
Certificates) have all been reduced to zero, 100% of any applicable
Senior Optimal Principal Amount.
After the aggregate Current Principal Amount of the Senior Mezzanine and
Subordinate Certificates has been reduced to zero, the Subordinate Optimal
Principal Amount shall be zero.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Trustee
pursuant to the Underlying Purchase Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, which either (A) in
the case of a mortgage loan tendered by the Underlying Seller pursuant to the
Underlying Purchase Agreement, satisfies the requirements of a "Qualified
Substitute Mortgage Loan" as defined in the Underlying Purchase Agreement or (B)
in the case of
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a mortgage loan tendered by the Mortgage Loan Seller pursuant to the Mortgage
Loan Purchase Agreement or this Agreement, any mortgage loan (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 Trustee 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: ▇▇▇▇▇ Fargo Bank Minnesota, 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, the balance thereof as indicated in Section 5.01, as reduced by
amounts allocated thereto in reduction thereof in accordance with Section 5.01.
UNDERLYING SELLER: With respect to each Mortgage Loan, HSBC.
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 to the 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
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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.
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ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE. (a) The Seller
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Trust without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule,
including all interest and principal due with respect to the Mortgage Loans
after the Cut-off Date, but excluding any payments of principal and interest due
on or prior to the Cut-off Date; (ii) such assets relating to the Mortgage Loans
as from time to time may be held by the Servicer in the Protected Account and
the Trustee in the Distribution Account for the benefit of the Trustee on behalf
of the Certificateholders, (iii) any REO Property, (iv) 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), (v) the Mortgage Loan
Purchase Agreement to the extent provided in Subsection 2.03(a), (vi) the
Underlying Purchase Agreement, (vii) the Servicing Agreement, (viii) the
Assignment, Assumption and Recognition Agreement, and (ix) any proceeds of the
foregoing. Although it is the intent of the parties to this Agreement that the
conveyance of the Seller's right, title and interest in and to the Mortgage
Loans and other assets in the Trust Fund pursuant to this Agreement shall
constitute a purchase and sale and not a loan, in the event that such conveyance
is deemed to be a loan, it is the intent of the parties to this Agreement that
the Seller shall be deemed to have granted to the Trustee a first priority
perfected security interest in all of the Seller's right, title and interest in,
to and under the Mortgage Loans and other assets in the Trust Fund, and that
this Agreement shall constitute a security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Seller
hereby deposits with the Trustee, with respect to each Mortgage Loan, (i) the
original Mortgage Note, endorsed without recourse to the order of the Trustee
and showing an unbroken chain of endorsements from the original payee thereof to
the Person endorsing it to the Trustee, or a lost note affidavit with indemnity,
(ii) the original Security Instrument, which shall have been recorded, with
evidence of such recording indicated thereon, (iii) a certified copy of the
assignment (which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to "▇▇▇▇▇ Fargo Bank
Minnesota, 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
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will, upon receipt of recording information relating to the Security Instrument
required to be included thereon, be delivered to recording offices for recording
and have not been returned to the Seller in time to permit their delivery as
specified above, the Seller may deliver a true copy thereof with a certification
by the Seller, on the face of such copy, substantially as follows: "Certified to
be a true and correct copy of the original, which has been transmitted for
recording"; (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 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 a
certification to such effect and shall deposit all amounts paid in respect of
such Mortgage Loans in the Protected 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 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 such recordation is not required by the Rating
Agencies or an Opinion of Counsel has been provided to the Trustee which states
that recordation of such Security Instrument is not required to protect the
interests of the Certificateholders in the related Mortgage Loans. The Seller
need not cause to be recorded any assignment in any jurisdiction under any state
other than Maryland, Florida, Mississippi, South Carolina and Tennessee;
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,
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,
(iv) the occurrence of a servicing transfer as described in Section 8.02 hereof
and (v) if the Seller is not the Servicer and with respect to any one
assignment, the occurrence of a bankruptcy, insolvency or foreclosure relating
to the Mortgagor under the related Mortgage, unless, with respect to clauses
(ii) through (v) above, an Opinion of Counsel is provided stating that such
assignment does not need to be recorded to protect the interest of the Trust in
such Mortgage Loan. 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.
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, the
Trustee, with respect to the Mortgage Loans, shall acknowledge with respect to
each Mortgage Loan by an
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Initial Certification substantially in the form of Exhibit J-1 hereto 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 thereof), the Trustee agrees, for the
benefit of the Certificateholders, to review each Mortgage File delivered to it
and to execute and deliver, or cause to be executed and delivered, to the Seller
and the Servicer an Interim Certification substantially in the form annexed as
Exhibit J-2 hereto. In conducting such review, the Trustee 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 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 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 shall promptly notify the Mortgage Loan
Seller. In accordance with the Mortgage Loan Purchase Agreement, the Mortgage
Loan Seller shall correct or cure any such defect within ninety (90) days from
the date of notice from the Trustee 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 shall enforce the Mortgage Loan Seller's
obligation pursuant to the Mortgage Loan Purchase Agreement, within 90 days from
the Trustee'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 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 will
review, for the benefit of the Certificateholders, the Mortgage Files delivered
to it and will execute and deliver or cause to be executed and delivered to the
Seller a Final Certification substantially in the form annexed as Exhibit J-3
hereto. In conducting such review, the Trustee 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 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
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Mortgage Loans identified in Exhibit B or to appear defective on its face, the
Trustee 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 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 Servicer the Repurchase Price for deposit in the
Protected 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 Protected Account, the Seller shall
notify the Trustee and the Trustee (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 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, the Underlying Purchase Agreement and the Servicing
Agreement, provided that the Seller retains a joint and several right in the
event of breach of the representations, warranties and covenants of the Servicer
under the Servicing Agreement or the Underlying Seller under the Underlying
Purchase Agreement to enforce the provisions thereof and to seek all or any
available remedies; and provided further that this shall not be deemed an
agreement or requirement on the part of the Seller to pursue any such remedies;
provided, further, that the obligations of the Mortgage Loan Seller or the
Underlying Seller, as applicable, to substitute or repurchase, as applicable, a
Mortgage Loan shall be the Trustee's and the Certificateholders' sole
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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 or the Trustee discovers (i) a breach of any of the
representations and warranties set forth in Section 3 of the Underlying Purchase
Agreement and such breach existed on the date the representation and warranty
was made or (ii) in accordance with Section 7 of the Mortgage Loan Purchase
Agreement, that an event has occurred which rendered the representation and
warranty untrue in any material respect between the date of the Servicing
Agreement and the Closing Date, 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 Underlying Seller or the Mortgage Loan
Seller, as applicable, within 60 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 Underlying Purchase Agreement, the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, shall purchase the Mortgage Loan or any property acquired with
respect thereto from the Trustee; PROVIDED, HOWEVER, that if there is a breach
of any representation set forth in the Underlying Purchase Agreement, 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 Underlying Seller or the Mortgage Loan Seller,
as applicable, 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 Underlying Seller or the Mortgage Loan Seller, as applicable, to the
extent not required by law to be paid to the borrower.) Upon receipt by the
Trustee of the Repurchase Price, the Trustee shall deposit such amount in the
Distribution Account and shall release to the Underlying Seller or the Mortgage
Loan Seller, as applicable, the related Mortgage File and shall execute and
deliver all instruments of transfer or assignment furnished to it by the
Underlying Seller or the Mortgage Loan Seller, as applicable, without recourse,
as are necessary to vest in the Underlying Seller or the Mortgage Loan Seller,
as applicable, 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 Servicer and the Rating Agencies of
such amendment. Enforcement of the obligation of the Underlying Seller or 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. In lieu of purchasing a
Mortgage Loan pursuant to the Underlying Purchase Agreement, the Mortgage Loan
Purchase Agreement or Sections 2.02 or 2.03 of this Agreement, the Underlying
Seller or the Mortgage Loan Seller, as applicable, may, no later than the date
by which such purchase by the Underlying Seller or the Mortgage Loan Seller, as
applicable, would otherwise be required, in accordance with and if required by
the related agreement, tender to the Trustee a Substitute Mortgage Loan
accompanied by a certificate of an authorized officer of the Underlying Seller
or the Mortgage Loan Seller, as
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applicable, that such Substitute Mortgage Loan conforms to the requirements set
forth in the definition of "Substitute Mortgage Loan" in the Underlying Purchase
Agreement or this Agreement, as applicable; PROVIDED, HOWEVER, that substitution
pursuant to the Underlying Purchase Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, in lieu of purchase
shall not be permitted after the termination of the two-year period beginning on
the Startup Day. The Trustee shall examine the Mortgage File for any Substitute
Mortgage Loan in the manner set forth in Section 2.02(a) and shall notify the
Underlying Seller or the Mortgage Loan Seller, as applicable, in writing, within
five Business Days after receipt, whether or not the documents relating to the
Substitute Mortgage Loan satisfy the requirements of the third sentence of
Subsection 2.02(a). Within two Business Days after such notification, the
Underlying Seller or the Mortgage Loan Seller, as applicable, 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 Underlying Seller or
the Mortgage Loan Seller, as applicable, of the Repurchase Price for the
purchase of a Mortgage Loan by the Underlying Seller or the Mortgage Loan
Seller, as applicable. After such notification to the Underlying Seller or 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
Underlying Seller or the Mortgage Loan Seller, as applicable, or the Servicer.
The Scheduled Principal on a Substitute Mortgage Loan due on the Due Date in the
month of substitution shall be the property of the Underlying Seller or the
Mortgage Loan Seller, as applicable, and the Scheduled Principal on the Mortgage
Loan for which the substitution is made due on such Due Date shall be the
property of the Trust Fund. Upon acceptance of the Substitute Mortgage Loan, the
Trustee shall release to the Underlying Seller or the Mortgage Loan Seller, as
applicable, the related Mortgage File related to any Mortgage Loan released
pursuant to the Underlying Purchase Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, and shall execute
and deliver all instruments of transfer or assignment, without recourse, in form
as provided to it as are necessary to vest in the Underlying Seller or the
Mortgage Loan Seller, as applicable, title to and rights under any Mortgage Loan
released pursuant to the Underlying Purchase Agreement, the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable. The
Underlying Seller shall deliver, or the Mortgage Loan Seller shall deliver, the
documents related to the Substitute Mortgage Loan in accordance with the
provisions of the Underlying Purchase Agreement, the Mortgage Loan Purchase
Agreement or Subsections 2.01(b) and 2.02(b) of this Agreement, as applicable,
with the date of acceptance of the Substitute Mortgage Loan deemed to be the
Closing Date for purposes of the time periods set forth in those Subsections.
The representations and warranties set forth in the Underlying Purchase
Agreement and the Mortgage Loan Purchase Agreement shall be deemed to have been
made by the Underlying Seller or 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 Trustee shall amend the Mortgage Loan
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Schedule to reflect such substitution and shall provide a copy of such amended
Mortgage Loan Schedule to the Servicer and the Rating Agencies.
Section 2.05 ISSUANCE OF CERTIFICATES. 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.
The Seller, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Seller in and to the
REMIC I Regular Interests and the other assets of REMIC II for the benefit of
the holders of the REMIC II Certificates. The Trustee acknowledges receipt of
the REMIC I Regular Interests (which are uncertificated) and the other assets of
REMIC II and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the holders of the REMIC II Certificates.
Section 2.06 REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER. The
Seller hereby represents and warrants to the Trustee as follows:
(i) the Seller (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and (b) is qualified and in good standing as a foreign corporation to
do business in each jurisdiction where such qualification is necessary,
except where the failure so to qualify would not reasonably be expected
to have a material adverse effect on the Seller's business as presently
conducted or on the Seller's ability to enter into this Agreement and
to consummate the transactions contemplated hereby;
(ii) the Seller has full corporate power to own its property,
to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(iii) the execution and delivery by the Seller of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Seller; and neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Seller or its properties or the articles
of incorporation or by-laws of the Seller, except those conflicts,
breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Seller's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(iv) the execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency,
except those
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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.
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ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 SERVICER. The Mortgage Loans shall be serviced pursuant to
the Servicing Agreement. The Trustee shall furnish the Servicer with any powers
of attorney and other documents in form as provided to it necessary or
appropriate to enable the Servicer to service and administer the related
Mortgage Loans and REO Property. In addition, the Trustee shall enforce the
obligations of the Servicer under the Servicing Agreement. The Trust shall be
liable for any costs incurred in connection with actions undertaken by the
Servicer, with the consent of the Trustee, pursuant to Section 6.03 of the
Servicing Agreement.
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 Servicer any court
pleadings, requests for trustee's sale or other documents necessary or desirable
to (i) the foreclosure or trustee's sale with respect to a Mortgaged Property;
(ii) any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Security Instrument; (iii) obtain a deficiency judgment against
the Mortgagor; or (iv) enforce any other rights or remedies provided by the
Mortgage Note or Security Instrument or otherwise available at law or equity.
Section 3.02 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee shall act in accordance herewith to assure continuing
treatment of such REMIC as a REMIC, and the Trustee shall comply with any
directions of the Seller or the 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 the Protected
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 Underlying Purchase Agreement, 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.
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Section 3.03 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the 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 Trustee shall direct the Servicer to, as provided in Section 7.02 of the
Servicing Agreement, promptly furnish to 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 Servicer pursuant to Section 4.01 of the
Servicing Agreement have been or will be so deposited) and upon receipt of such
certification, the Trustee shall deliver to the Servicer the related Mortgage
File; thereafter, the Trustee shall have no further responsibility with regard
to such Mortgage File. Upon any such payment in full, the 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 Servicing Agreement,
the Trustee shall execute such documents as shall be prepared and furnished to
the Trustee by the Servicer (in form reasonably acceptable to the Trustee) and
as are necessary to the prosecution of any such proceedings. The Trustee shall,
upon the request of the Servicer and delivery to 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. Such trust
receipt shall obligate the Servicer to return the Mortgage File to the Trustee,
when the need therefor by the Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the Mortgage File shall be
released by the Trustee to the Servicer.
Section 3.04 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.
Within 15 days after each Distribution Date, the Trustee shall, in accordance
with industry standards, file with the Commission via the Electronic Data
Gathering and Retrieval System ("▇▇▇▇▇"), a Form 8-K which shall include a copy
of the statement to the Certificateholders for such Distribution Date as an
exhibit thereto. Prior to January 30, 2003, the Trustee shall, in accordance
with industry standards and only if instructed by the Seller, file a Form 15
Suspension Notice with respect to the Trust Fund, if applicable. Prior to March
30, 2003, the Trustee shall file a Form 10-K, in substance conforming to
industry standards, with respect to the Trust Fund. The Seller hereby grants to
the Trustee a limited power of attorney to execute and file each such document
on behalf of the Seller. Such power of attorney shall continue until either the
earlier of (i) receipt by the Trustee from the Seller of written termination of
such power of attorney and (ii) the termination of the Trust Fund. The Seller
agrees to promptly furnish to the Trustee, from time to time upon request, such
further information, reports and financial statements within its control related
to this Agreement and the Mortgage Loans
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as the Trustee reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Trustee shall have no responsibility to file
any items other than those specified in this Section 3.04; provided, however,
the Trustee will cooperate with the Seller in connection with any additional
filings with respect to the Trust Fund as the Seller deems necessary under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Copies of all
reports filed by the Trustee under the Exchange Act shall be sent to: the Seller
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc., Attn: Managing Director-Analysis and Control, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇- 3859. Fees and expenses
incurred by the Trustee in connection with this Section 3.04 shall not be
reimbursable from the Trust Fund.
Section 3.05 EMC. On the Closing Date, EMC will receive from the Seller
a payment of $5,000.
Section 3.06 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.
With respect to any Mortgage Loan which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, EMC shall have the right to purchase such Mortgage Loan from the Trust
at a price equal to the Repurchase Price; provided however (i) that such
Mortgage Loan is still 90 days or more delinquent or is an REO Property as of
the date of such purchase and (ii) this purchase option, if not theretofore
exercised, shall terminate on the date prior to the last day of the related
Calendar Quarter. This purchase option, if not exercised, shall not be
thereafter reinstated unless the delinquency is cured and the Mortgage Loan
thereafter again becomes 90 days or more delinquent or becomes an REO Property,
in which case the option shall again become exercisable as of the first day of
the related Calendar Quarter.
If at any time EMC remits to the Servicer a payment for deposit in the
Protected 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 Protected 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 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. The Trustee
will cause to be deposited in the Distribution Account as received, the
following amounts:
(i) Any amounts received by the Trustee from the Servicer on
the Servicer Remittance Date or any other amounts required to be
deposited in the Distribution Account pursuant to this Agreement or the
Servicing Agreement;
(ii) The Repurchase Price with respect to any Mortgage Loans
purchased by the Underlying Seller, the Mortgage Loan Seller or EMC
pursuant to the Underlying Purchase Agreement, the Mortgage Loan
Purchase Agreement or Section 2.02, 2.03 or 3.06 of this Agreement, as
applicable, any amounts which are to be treated pursuant to the
Underlying Purchase Agreement, the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, as the payment of such a
Repurchase Price, and all proceeds of any Mortgage Loans or property
acquired in connection with the optional termination of the Trust; and
(iii) Any amounts required to be deposited with respect to
losses on investments of deposits in the Distribution Account.
(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 Servicer (whether made directly, or indirectly through a liquidator or
receiver of the Trustee or the Servicer). 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 Trustee or held on deposit with the
trustee uninvested, 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. Any and all investment earnings or other
benefit from uninvested funds from the Distribution Account shall be paid to, or
accrue to the benefit of the Trustee. If there is any loss on a Permitted
Investment or demand deposit, the Trustee shall deposit the amount of the loss
in the Distribution Account. With respect to the Distribution Account and the
funds deposited therein, the Trustee shall take such action as may be necessary
to ensure that the Certificateholders shall be entitled to the
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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), if applicable, or
any applicable comparable state statute applicable to state chartered banking
corporations.
Section 4.02 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT. (a) The Trustee will, from time to time, make or cause to be made such
withdrawals or transfers from the Distribution Account as follows:
(i) to reimburse the Trustee for expenses, costs and liabilities
incurred by and reimbursable to it pursuant to this Agreement;
(ii) to pay investment income to the Trustee on amounts on deposit
in the Distribution Account;
(iii) to remove amounts deposited in error; and
(iv) to clear and terminate the Distribution Account pursuant to
Section 10.01.
(b) On each Distribution Date, the Trustee shall distribute the
Available Funds to the Holders of the Certificates in accordance with Section
6.01.
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ARTICLE V
Certificates
Section 5.01 CERTIFICATES. (a) The Depository, the Seller and the
Trustee have entered into a Depository Agreement dated as of the Closing Date
(the "Depository Agreement"). Except for the Residual Certificates, the Private
Certificates and the Individual Certificates and as provided in Subsection
5.01(b), the Certificates shall at all times remain registered in the name of
the Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to a successor to the
Depository; (ii) ownership and transfers of registration of such Certificates on
the books of the Depository shall be governed by applicable rules established by
the Depository; (iii) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (iv) the Trustee shall
deal with the Depository as representative of such Certificate Owners of the
respective Class of Certificates for purposes of exercising the rights of
Certificateholders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; and (v) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.
The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Trustee cause such Class to become
Global Certificates, the Trustee and the Seller will take such action as may be
reasonably required to cause the Depository to accept such Class or Classes for
trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(b) If (i)(A) the Seller advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the 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
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equal to those set forth in Section 5.01(c) and (y) the Class R-I Certificates,
which is hereby designated as the single "residual interest" in REMIC I.
Distributions of principal shall be deemed to be made to the REMIC I Regular
Interests LT-A1, LT-A2, LT-A3, ▇▇-▇▇, ▇▇-▇▇, ▇▇-▇▇, ▇▇-▇▇, ▇▇-▇▇, ▇▇-▇▇ and LT-R
in the same manner and priority as princpal payments are made to Corresponding
Certificates. Realized Losses shall be applied in the amount and priority
allocated to Corresponding Certificates.
The REMIC I Regular Certificates and the Class R-I Certificates will
have the following designations and pass-through rates:
REMIC I
Interest Initial Balance Pass-Through Rate
-------- --------------- -----------------
LT-A1 $ 197,485,800.00 (1)
LT-A2 $ 275,000,000.00 (1)
LT-A3 $ 8,703,700.00 (1)
LT-B1 $ 6,216,900.00 (1)
LT-B2 $ 4,476,200.00 (1)
LT-B3 $ 2,238,100.00 (1)
LT-B4 $ 1,243,400.00 (1)
LT-B5 $ 994,700.00 (1)
LT-B6 $ 994,726.15 (1)
LT-R $ 50.00 (1)
Class R-I $ 50.00 (1)
------------------------------------
(1) The weighted average of the Net Rates of the 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.
(ii) REMIC II will be evidenced by (x) the Certificates (other
than the Class R Certificates) (the "REMIC II Regular Certificates"), which are
hereby designated as the "regular interests" in REMIC II and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in Section 5.01(c) and (y) the Class R-II Certificate, which is hereby
designated as the single "residual interest" in REMIC II.
The Classes of the Certificates shall have the following designations,
initial principal amounts and Pass-Through Rates:
DESIGNATION INITIAL PRINCIPAL AMOUNT PASS-THROUGH RATE
----------- ------------------------ -----------------
A-1 $197,485,800 (1)
A-2 $275,000,000 (4)
X (2) (3)
R-I $50.00 (4)
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R-II $50.00 (4)
A-3 $8,703,700 (4)
B-1 $6,216,900 (4)
B-2 $4,476,200 (4)
B-3 $2,238,100 (4)
B-4 $1,243,400 (4)
B-5 $994,700 (4)
B-6 $994,726.15 (4)
------------------------------------
(1) The Class A-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Mortgage
Loans, minus 0.6485% per annum, 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. After the
Distribution Date in March 2007, the Class A-1 Certificates will bear interest
at a variable Pass-Through Rate equal to the weighted average of the Net Rates
of the Mortgage Loans. The Pass-Through Rate with respect to the first Interest
Accrual Period is expected to be approximately 5.2000% per annum.
(2) The Class X Certificates will have a notional balance equal to the
principal balance of the Class A-1 Certificates, which for federal income tax
purposes shall equal the Uncertificated Principal Balance of REMIC I Regular
Interest LT-1A.
(3) The Class X Certificates will bear interest, up to and including
the Distribution Date in March 2007, at a fixed rate equal to 0.6485% per annum
based on a Notional Balance described in footnote (2). After the Distribution
Date in March 2007, the Class X Certificate will not bear any interest.
(4) The Class R-I, Class R-II, Class A-2, Class A-3, Class B-1, Class
B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the 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. The Pass-
Through Rate with respect to the first Interest Accrual Period is expected to be
approximately 5.8485% per annum.
(d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date in the Trust Fund has been
designated as the "latest possible maturity date" for the REMIC I Regular
Interests and the Certificates.
(e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates, 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 ▇-▇, ▇-▇, ▇-▇ and A-4. On original issuance, the Trustee shall sign,
countersign and shall deliver them at the direction of the Seller. Pending the
preparation of definitive Certificates of any Class, the Trustee may sign and
countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates
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may determine, as evidenced by their execution of such Certificates. If
temporary Certificates are issued, the Seller will cause definitive Certificates
to be prepared without unreasonable delay. After the preparation of definitive
Certificates, the temporary Certificates shall be exchangeable for definitive
Certificates upon surrender of the temporary Certificates at the office of the
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Certificates, the Trustee shall sign and countersign and
deliver in exchange therefor a like aggregate principal amount, in authorized
denominations for such Class, of definitive Certificates of the same Class.
Until so exchanged, such temporary Certificates shall in all respects be
entitled to the same benefits as definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates) and the
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.
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(h) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each
REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each REMIC shall have a tax year
that is a calendar year and shall report income on an accrual basis.
(k) The Trustee on behalf of the Trust shall cause each REMIC to timely
elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of any
Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.
(l) The following legend shall be placed on the Residual Certificates
and Private Certificates, whether upon original issuance or upon issuance of any
other Certificate of any such Class in exchange therefor or upon transfer
thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, 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, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 95-60 OR PTE 96-23 AND (II) WILL NOT
GIVE RISE TO ANY ADDITIONAL FIDUCIARY OBLIGATIONS ON THE PART OF THE
SELLER, THE 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.
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Section 5.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. (a)
The Trustee shall maintain at its Corporate Trust Office a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided.
(b) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Physical Certificate upon the satisfaction of the conditions set
forth below, upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose, the Trustee
shall sign, countersign and shall deliver, in the name of the designated
transferee or transferees, a new Certificate of a like Class and aggregate
Fractional Undivided Interest, but bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein. In addition to the provisions of Subsection 5.02(h), the following
restrictions shall apply with respect to the transfer and registration of
transfer of an Individual Certificate to a transferee that takes delivery in the
form of an Individual Certificate:
(i) The Trustee shall register the transfer of an Individual
Certificate if the requested transfer is being made to a transferee who
has provided the Trustee with a Rule 144A Certificate or comparable
evidence as to its QIB status.
(ii) The Trustee shall register the transfer of any Individual
Certificate if (x) the transferor has advised the Trustee in writing
that the Certificate is being transferred to an Institutional
Accredited Investor; and (y) prior to the transfer the transferee
furnishes to the Trustee an Investment Letter (and the Trustee shall be
fully protected in so doing), provided that, if based upon an Opinion
of Counsel 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).
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(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.
(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.
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(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 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
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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.
(m) 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, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 95-60 OR PTE 96-23 AND (II) WILL NOT
GIVE RISE TO ANY ADDITIONAL FIDUCIARY OBLIGATIONS ON THE PART OF THE
SELLER, THE SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED
BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND
WILL BE EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH
EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL ACCREDITED INVESTOR.
Section 5.03 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.
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(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 (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
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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 Trustee 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.
(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 and
the Servicer with an Opinion of Counsel satisfactory to the Trustee and the
Servicer which opinion will not be at the expense of the Trustee or the Servicer
that the purchase of such Certificates by or on behalf of such Plan is
permissible under applicable law, will not constitute or result in a nonexempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the
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Trustee or the Servicer 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
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 B-4, Class B-5 and
Class 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, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ 95-60 or PTE 96- 23 and (II) will not subject the Seller, the Servicer
or the Trustee to any obligation in addition to those undertaken in the
Agreement.
(c) Neither the Trustee nor the Servicer 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 and the Servicer from and against any and all liabilities, claims,
costs or expenses incurred by the Trustee or the 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.
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
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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 May 2002, in an aggregate amount equal to the sum of the
Available Funds for such Distribution Date. On each Distribution Date, the
Available Funds shall be distributed as follows:
(A) on each Distribution Date, the Available Funds will be
distributed to the Senior Certificates as follows:
FIRST, to the Senior Certificates, on a pro rata
basis, the Accrued Certificate Interest on each such
Class for such Distribution Date. As described below,
Accrued Certificate Interest on the Senior
Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto.
Any Net Interest Shortfalls shall be allocated among
the Senior Certificates as described below;
SECOND, to the Senior Certificates, on a pro rata
basis, any Accrued Certificate Interest thereon
remaining undistributed from previous Distribution
Dates, to the extent of remaining Available Funds;
and
THIRD, the Senior Optimal Principal Amount for such
Distribution Date to the extent of remaining
Available Funds shall be distributed as follows:
(a) sequentially, in the following order, to the
Class R-I Certificates and Class R-II
Certificates, in reduction of the Current
Principal Amounts thereof, until the Current
Principal Amounts of such Classes have been
reduced to zero; and
(b) to the Class A-1 Certificates and Class A-2
Certificates, on a pro rata basis, based on
the Current Principal Amounts thereof, until
the Current Principal Amounts of such
Classes have been reduced to zero;
(B) On each Distribution Date on or prior to the Cross-Over
Date, an amount equal to the remaining Available Funds after
the distributions in (A) above will be distributed to the
Class A-3 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 the
remaining Available Funds.
(C) On each Distribution Date on or prior to the Cross-Over
Date, an amount equal to the sum of the remaining Available
Funds after the distributions in (A) and
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(B) above will be distributed sequentially, in the following
order, to the Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates, in each case up to an
amount equal to and in the following order: (a) the Accrued
Certificate Interest thereon for such Distribution Date, (b)
any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates and (c) such
Class's Allocable Share for such Distribution Date, in each
case, to the extent of the remaining Available Funds.
(b) If, after distributions have been made pursuant to priorities first
and second of clause (A) above on any Distribution Date, the remaining Available
Funds are less than the Senior Optimal Principal Amount such amount shall be
reduced, and such remaining funds will be distributed on the Senior Certificates
on the basis of such reduced amount.
(c) "Pro rata" distributions among Classes of Certificates will be made
in proportion to the then Current Principal Amount of such Classes.
(d) 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-II Certificates.
(e) 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.
(f) If on any Distribution Date the Available Funds for the Senior
Certificates is less than the Accrued Certificate Interest on the 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 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
Servicer or otherwise, except to the extent of applicable Compensating Interest
Payments.
(g) The expenses and fees of the Trust shall be paid by each of the
REMICs, to the extent that such expenses relate to the assets of each of such
respective REMICs, and all other expenses and fees of the Trust shall be paid
pro rata by each of the REMICs.
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Section 6.02 ALLOCATION OF LOSSES. (a) On or prior to each
Determination Date, the Servicer shall determine the amount of any Realized Loss
in respect of each Mortgage Loan that occurred during the immediately preceding
calendar month.
(b) With respect to any Certificates on any Distribution Date, the
principal portion of each Realized Loss on a Mortgage Loan shall be allocated as
follows:
first, to the Class B-6 Certificates until the Current
Principal Amount thereof has been reduced to zero;
second, to the Class B-5 Certificates until the Current
Principal Amount thereof has been reduced to zero;
third, to the Class B-4 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fifth, to the Class B-2 Certificates until the Current
Principal Amount thereof has been reduced to zero;
sixth, to the Class B-1 Certificates until the Current
Principal Amount thereof has been reduced to zero; and
seventh, to the Class A-3 Certificates until the Current
Principal Amount thereof has been reduced to zero;
eighth, to the Senior Certificates (other than the Interest
Only Certificates), on a pro rata basis until the Current Principal
Amounts thereof have been reduced to zero.
(c) Notwithstanding the foregoing clause (b), no such allocation of any
Realized Loss shall be made on a Distribution Date to any Class of Certificates
to the extent that such allocation would result in the reduction of the
aggregate Current Principal Amounts of all the Certificates as of such
Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on such date, to an amount less than the
aggregate Scheduled Principal Balance of all of the Mortgage Loans as of the
first day of the month of such Distribution Date (such limitation, the "Loss
Allocation Limitation").
(d) Any Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class in proportion to their respective
Current Principal Amounts. Any allocation of Realized Losses shall be
accomplished by reducing the Current Principal Amount of the related
Certificates on the related Distribution Date.
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(e) Realized Losses shall be allocated on the Distribution Date in the
month following the month in which such loss was incurred and, in the case of
the principal portion thereof, after giving effect to distributions made on such
Distribution Date.
(f) On each Distribution Date, the Trustee shall determine the Senior
Mezzanine Certificate Writedown Amount and the Subordinate Certificate Writedown
Amount. Any such Subordinate Certificate Writedown Amount shall effect a
corresponding reduction in the Current Principal Amount of (i) with respect to
the Subordinate Certificate Writedown Amount, if prior to the Cross-Over Date,
the Current Principal Amounts of the Subordinate Certificates, in the reverse
order of their numerical Class designations, (ii) with respect to the Senior
Mezzanine Certificate Writedown Amount, if prior to the Cross-Over Date, the
Current Principal Amounts of the Senior Mezzanine Certificates and (iii) from
and after the Cross-Over Date, the Senior Certificates which reduction shall
occur on such Distribution Date after giving effect to distributions made on
such Distribution Date.
(g) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall for such Distribution Date. The interest portion of any
Realized Losses with respect to the Mortgage Loans occurring on or prior to the
Cross-Over Date will not be allocated among any Certificates, but will reduce
the amount of Available Funds on the related Distribution Date. As a result of
the subordination of the Senior Mezzanine and Subordinate Certificates in right
of distribution, such Realized Losses will be borne first by the Subordinate
Certificates in inverse order of their numerical Class designations, and then by
the Senior Mezzanine Certificates. Following the Cross-Over Date, the interest
portion of Realized Losses on the Mortgage Loans will be allocated to the
related 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 Trustee by the Servicer. The Trustee shall calculate the amount
to be distributed to each Class and, based on such amounts, the Trustee shall
determine the amount to be distributed to each Certificateholder. All of the
Trustee's calculations of payments shall be based solely on information provided
to the Trustee by the Servicer. The Trustee shall not be required to confirm,
verify or recompute any such information but shall be entitled to rely
conclusively on such information.
(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.
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Section 6.04 STATEMENTS TO CERTIFICATEHOLDERS. (a) Concurrently with
each distribution to Certificateholders, the Trustee shall make available to the
parties hereto and each Certificateholder via the Trustee'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, in the case of the
Interest Only Certificates, a Notional Amount of $1,000, or in the case of each
Class of Residual Certificates, an initial Current Principal Amount of $50:
(i) the Current Principal Amount or Notional Amount of each
Class of Certificates immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on
each applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related
Interest Accrual Period;
(iv) the Net Interest Shortfall and any other adjustments to
interest at the related Pass-Through Rate necessary to account for any
difference between interest accrued and aggregate interest distributed
with respect to each Class of Certificates;
(v) the amount of the distribution allocable to interest on
each Class of Certificates;
(vi) the Pass-Through Rates for each Class of Certificates
with respect to such Distribution Date;
(vii) the Current Principal Amount or Notional Amount of each
Class of Certificates after such Distribution Date;
(viii) the amount of any Monthly Advances, Compensating
Interest Payments and outstanding unreimbursed advances by the Servicer
included in such distribution;
(ix) the aggregate amount of any Realized Losses (listed
separately for each category of Realized Loss) 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 the Mortgage Loans, 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)
remaining in the Trust Fund as of the end of the related Prepayment
Period;
(xiii) information for the Mortgage Loans 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) 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) 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; provided
that, in the event that such information is not available to the
Trustee 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; and
(xix) the then applicable Senior Percentage, Senior Prepayment
Percentage, Senior Mezzanine and Subordinate Percentage and Subordinate
Prepayment Percentage.
The information set forth above shall be calculated or reported, as the
case may be, by the Trustee, based solely on, and to the extent of, information
provided to the Trustee by the Servicer. The Trustee may conclusively rely on
such information and shall not be required to confirm, verify or recalculate any
such information.
The Trustee may make available each month, to any interested party ,
the monthly statement to Certificateholders via the Trustee's website initially
located at "▇▇▇.▇▇▇▇▇▇▇.▇▇▇." Assistance in using the website can be obtained by
calling the Trustee's customer service desk at (301) 815-
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6600. 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 Trustee 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 Trustee shall provide
timely and adequate notification to all parties regarding any such change.
(b) By May 31 of each year beginning in 2003, 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 Trustee deems to be necessary and/or to be required
by the Internal Revenue Service or by a federal or state law or rules or
regulations to enable such Holders to prepare their tax returns for such
calendar year. Such obligations shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Trustee pursuant to the requirements of the Code.
Section 6.05 MONTHLY ADVANCES. Pursuant to Section 5.03 of the
Servicing Agreement, the Servicer shall make Monthly Advances. On the Business
Day prior to each Servicer Remittance Date, if a Mortgage Loan is delinquent as
of the immediately preceding Determination Date, the Servicer will be obligated
to make a Monthly Advance by deposit into the Custodial Account (as defined in
the Servicing Agreement), except to the extent the Servicer determines any such
advance to be nonrecoverable from Liquidation Proceeds, Insurance Proceeds or
from future payments on the Mortgage Loan for which the advance was made. In the
event the Servicer fails to remit the required Monthly Advance by three (3)
Business Days after the related Servicer Remittance Date, the Trustee shall
terminate the Servicer in accordance with Section 10.01 of the Servicing
Agreement, and, as successor Servicer, make the Monthly Advance with respect to
that Mortgage Loan. The Trustee shall be reimbursed for any Monthly Advance in
the same manner that the Servicer would be reimbursed for a Monthly Advance, in
accordance with the Servicing Agreement.
Section 6.06 COMPENSATING INTEREST PAYMENTS. Pursuant to Section 6.04
of the Servicing Agreement, the Servicer is required to remit to the Trustee for
deposit in the Distribution Account amounts in respect of subclauses (a) and (b)
of the definition of Interest Shortfall with respect to the Mortgage Loans for
the related Distribution Date (such amount, the "Compensating Interest
Payment"). The Servicer shall not be entitled to any reimbursement of any
Compensating Interest Payment. Any Interest Shortfalls required to be funded but
not funded by the Servicer are required to be paid by the Trustee, but only to
the extent that such amount does not exceed amounts due to the Trustee hereunder
for the applicable Distribution Date.
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ARTICLE VII
The Servicer
Section 7.01 INDEMNIFICATION OF THE TRUSTEE. (a) The Trust shall
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 other than (i) any loss, liability or expense related to such
Indemnified Person's failure to perform such Indemnified Person's duties in
strict compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and (ii) any
loss, liability or expense incurred by reason of such Indemnified Person's
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. This indemnity shall survive the resignation or removal of the
Trustee and the termination of this Agreement.
(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 7.02 SUCCESSOR SERVICER. In connection with the appointment of
any successor Servicer (acceptable to the Rating Agencies) or the assumption of
the duties of the Servicer, EMC or the Trustee may make such arrangements for
the compensation of such successor servicer out of payments on the Mortgage
Loans as EMC or the Trustee and such successor servicer shall agree. If the
successor servicer does not agree that such market value is a fair price, such
successor servicer shall obtain two quotations of market value from third
parties actively engaged in the servicing of single-family mortgage loans.
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ARTICLE VIII
Default
Section 8.01 EVENTS OF DEFAULT. In each and every case, so long as an
Event of Default with respect to the Servicer shall not have been remedied, the
Trustee may, and upon request of the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the principal of
the Trust Fund, the Trustee shall by notice in writing to the Servicer, with a
copy to the Rating Agencies, terminate all of the rights and obligations (but
not the liabilities) of the Servicer under the Servicing Agreement and in and to
the Mortgage Loans and/or the REO Property serviced by the Servicer and the
proceeds thereof.
Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon the
termination of the Servicer under the Servicing Agreement, the Trustee shall
automatically become the successor in all respects to the Servicer in its
capacity under the Servicing Agreement and the transactions set forth or
provided for therein and shall thereafter be subject to all the
responsibilities, duties, liabilities and limitations on liabilities relating
thereto placed on the Servicer by the terms and provisions thereof; PROVIDED,
HOWEVER, that EMC shall have the right to either (a) immediately assume the
duties of the Servicer or (b) select a successor Servicer acceptable to the
Rating Agencies; and PROVIDED FURTHER, HOWEVER, it is understood and
acknowledged that by the parties hereto that there will be a period of
transition (not to exceed 90 days) before the transfer of servicing obligations
is fully effected and that the Trustee (i) shall be under no obligation to
purchase any Mortgage Loan; and (ii) shall have no obligation whatsoever with
respect to any liability (other than advances deemed recoverable and not
previously made) incurred by the Servicer at or prior to the time of
termination. As compensation therefor, the Trustee shall be entitled to all
funds relating to the Mortgage Loans which the Servicer would have been entitled
to retain if the Servicer had continued to act hereunder, except for those
amounts due the Servicer as reimbursement 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 ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac-approved servicer having a net worth of not less than $25,000,000
and which has the qualifications required under the Servicing Agreement, as the
successor to the Servicer under the Servicing Agreement in the assumption of all
or any part of the responsibilities, duties or liabilities of the Servicer under
the Servicing Agreement. Pending appointment of a successor to the 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 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 servicing responsibilities
hereunder. The Trustee and such successor shall take such action, consistent
with this Agreement and the Servicing Agreement, as shall be necessary to
effectuate any such succession.
(b) The termination of the rights and obligations of the Servicer shall
not affect any obligations incurred by the Servicer prior to such termination.
Notwithstanding anything in this Agreement to the contrary, the Trustee shall be
entitled to be reimbursed by the Servicer (or by the
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Trust Fund if the Servicer is unable to fulfill its obligations hereunder) for
all costs incurred by the Trustee in connection or associated with the transfer
of servicing from the Servicer to a successor Servicer (whether or not the
Trustee is the successor Servicer), including, without limitation, any costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction and/or manipulation of such servicing data as may be
required to correct any errors or insufficiencies in the servicing data provided
by the Servicer or as otherwise may be required to enable the successor Servicer
(including the Trustee) to service the Mortgage Loans properly and effectively
in accordance with the provisions of this Agreement.
If the Trustee shall succeed to any duties of the 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
Servicer in the servicing of the Mortgage Loans (although such provisions shall
continue to apply to the Trustee in its capacity as Trustee); the provisions of
Article VII, however, shall apply to it in its capacity as successor servicer.
Section 8.03 NOTIFICATION TO CERTIFICATEHOLDERS. Upon any termination
or appointment of a successor to the 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 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
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, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement as duties of the
Trustee. If an Event of Default has occurred and has not been cured or waived,
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and subject to Section 8.02(b) use the same degree of care and skill
in their exercise, as a prudent person would exercise under the circumstances in
the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee pursuant to any provision of this
Agreement, the Trustee shall examine them to determine whether they are in the
form required by this Agreement; provided, however, that the Trustee shall not
be responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Servicer; provided, further, that the Trustee shall not be responsible for the
accuracy or verification of any calculation provided to it pursuant to this
Agreement.
(c) On each Distribution Date, the Trustee shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 6.01 and 10.01 herein.
(d) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of 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 and, in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
(ii) The Trustee shall not be liable in its individual
capacity for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent
facts;
(iii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the directions of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 25%
of the
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Trust Fund, if such action or non-action relates to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or other power conferred upon the
Trustee under this Agreement;
(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 Protected 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 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 has
been advised of the likelihood of such loss or damage and regardless of
the form of action, except that the Trustee shall be responsible for
any losses on Permitted Investments in the Distribution Account;
(vii) Neither EMC nor the Trustee shall be responsible for the
acts or omissions of the other, it being understood that this Agreement
shall not be construed to render them partners, joint venturers or
agents of one another; and
(viii) The Trustee shall not in any way be liable for any
action or failure to act by the Servicer and is not required to
supervise the performance of the Servicer.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under the Servicing Agreement, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Servicer in accordance with
the terms of this Agreement.
(e) All funds received by the Servicer and the Trustee and required to
be deposited in the Protected Account or Distribution Account pursuant to this
Agreement will be promptly so deposited by the Servicer and the Trustee.
(f) Except for those actions that the Trustee is required to take
hereunder, the Trustee shall not 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.
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Section 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as otherwise
provided in Section 9.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting in reliance on any resolution, certificate of
the Seller or the Servicer, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) The Trustee may consult with counsel and any advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection with respect to any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel:
(iii) The Trustee shall not 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, the Trustee shall not be liable in its individual capacity
for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(v) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing to do so by Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund and
provided that the payment within a reasonable time to the Trustee of
the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement. The Trustee may require reasonable indemnity
against such expense or liability as a condition to taking any such
action. The reasonable expense of every such examination shall be paid
by the Certificateholders requesting the investigation;
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(vi) The Trustee 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 Servicer, which
consent will not be unreasonably withheld. The Trustee shall not be
liable or responsible for the misconduct or negligence of any of the
Trustee's agents or attorneys or a custodian or paying agent appointed
hereunder by the Trustee with due care and, when required, with the
consent of the Servicer;
(vii) Should the Trustee deem the nature of any action
required on its part, other than a payment or transfer under Subsection
4.01(b) to be unclear, the Trustee may require prior to such action
that it be provided by the Seller with reasonable further instructions;
(viii) The right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and
the Trustee shall not be accountable for other than its negligence or
willful misconduct in the performance of any such act;
(ix) The Trustee shall not be required to give any bond or
surety with respect to the execution of the trust created hereby or the
powers granted hereunder, except as provided in Subsection 9.07; and
(x) The Trustee shall not have any duty to conduct any
affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Mortgage Loan by the Underlying Seller
pursuant to the Underlying Purchase Agreement, 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 NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS. The
recitals contained herein and in the Certificates (other than the signature and
countersignature of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and the Trustee shall not have any responsibility for
their correctness. The Trustee does not make 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. The Trustee
shall not be accountable for the use or application by the Seller of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Seller with respect to the Mortgage Loans.
Subject to the provisions of Section 2.05, the Trustee shall not be responsible
for the legality or validity of this Agreement or any document or instrument
relating to this Agreement, the validity of the execution of this Agreement or
of any supplement hereto or instrument of further assurance, or the validity,
priority, perfection or sufficiency of the security for the Certificates issued
hereunder or intended to be issued hereunder. The Trustee shall not 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
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maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Fund or its ability to generate the payments to be
distributed to Certificateholders, under this Agreement. The Trustee shall not
have any responsibility for filing any financing or continuation statement in
any public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to record this
Agreement.
Section 9.04 TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual capacity or in any capacity other than as Trustee hereunder may
become the owner or pledgee of any Certificates with the same rights it would
have if it were not Trustee, and may otherwise deal with the parties hereto.
Section 9.05 TRUSTEE FEES AND EXPENSES. The Trustee will be entitled to
any amounts earned on funds in the Distribution Account. The Trustee shall not
be liable for any legal expenses, costs and liabilities from any action that the
Servicer may undertake.
The Trustee will be entitled to recover from the Distribution Account
pursuant to Section 4.02(a) all reasonable out-of-pocket expenses, disbursements
and advances and the expenses of the Trustee, 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 in the administration of the trusts hereunder (including the
reasonable compensation, expenses and disbursements of its counsel) except any
such expense, disbursement or advance as may arise from its negligence or
intentional misconduct or which is the responsibility of the Certificateholders
or the Trust Fund hereunder. If funds in the Distribution Account are
insufficient therefor, the Trustee 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. The Trustee and any
successor Trustee shall during the entire duration of this Agreement be a state
bank or trust company or a national banking association organized and doing
business under the laws of such state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus and undivided profits of at least $40,000,000 or, in the
case of a successor Trustee, $50,000,000, subject to supervision or examination
by federal or state authority and, in the case of 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 ▇▇▇▇▇'▇ with respect to any outstanding long-
term unsecured unsubordinated debt, and, in the case of a successor Trustee
other than pursuant to Section 9.10, rated in one of the two highest long-term
debt categories of, or otherwise acceptable to, each of the Rating Agencies. If
the Trustee publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 9.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital and
surplus) as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 9.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 9.08.
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Section 9.07 INSURANCE. The Trustee, at its own expense, shall at all
times maintain and keep in full force and effect: (i) fidelity insurance, (ii)
theft of documents insurance and (iii) forgery insurance (which may be
collectively satisfied by a "Financial Institution Bond" and/or a "Bankers'
Blanket Bond"). All such insurance shall be in amounts, with standard coverage
and subject to deductibles, as are customary for insurance typically maintained
by banks or their affiliates which act as custodians for investor-owned mortgage
pools. A certificate of an officer of the Trustee as to the Trustee's compliance
with this Section 9.07 shall be furnished to any Certificateholder upon
reasonable written request.
Section 9.08 RESIGNATION AND REMOVAL OF THE TRUSTEE. (a) The Trustee
may at any time resign and be discharged from the Trust hereby created by giving
written notice thereof to the Seller and the Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Seller shall promptly
appoint a successor Trustee by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the resigning Trustee the
successor Trustee. If no successor Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.06 and shall fail to resign after written
request therefor by the Seller or if at any time the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver
of the Trustee, or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee, or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Seller
shall promptly remove the Trustee and appoint a successor Trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
each of the Trustee so removed and the successor Trustee.
(c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee and appoint a successor Trustee by written instrument or
instruments, in quadruplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Seller, the Servicer, and the Trustee so removed and the successor so appointed.
(d) No resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.08 shall
become effective except upon appointment of and acceptance of such appointment
by the successor Trustee as provided in Section 9.09.
Section 9.09 SUCCESSOR TRUSTEE. (a) Any successor Trustee appointed as
provided in Section 9.08 shall execute, acknowledge and deliver to the Seller
and to its predecessor Trustee an instrument accepting such appointment
hereunder. The resignation or removal of the predecessor Trustee shall then
become effective and such successor Trustee , without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee herein. The predecessor Trustee shall after payment of its
outstanding fees and expenses promptly deliver to the successor Trustee all
assets and records of the Trust held by it hereunder, and the Seller and the
predecessor
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Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor Trustee all such rights, powers, duties and obligations.
(b) No successor Trustee shall accept appointment as provided in this
Section 9.09 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee as provided
in this Section 9.09, the successor Trustee shall mail notice of the succession
of such Trustee hereunder to all Certificateholders at their addresses as shown
in the Certificate Register and to the Rating Agencies. EMC shall pay the cost
of any mailing by the successor Trustee .
Section 9.10 MERGER OR CONSOLIDATION OF TRUSTEE. Any state bank or
trust company or national banking association into which the Trustee may be
merged or converted or with which it may be consolidated or any state bank or
trust company or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any state
bank or trust company or national banking association succeeding to all or
substantially all of the corporate trust business of the Trustee shall be the
successor of the Trustee hereunder, provided such state bank or trust company or
national banking association shall be eligible under the provisions of Section
9.06. Such succession shall be valid without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
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 cotrustee 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
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as Trustee hereunder or as successor to the 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, 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 and REMIC II shall be a calendar year and
the Trustee shall maintain or cause the maintenance of the books of each such
REMIC on the accrual method of accounting.
(b) The Trustee 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 and REMIC II, 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 20% CPR). The Trustee 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
Trustee 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 and REMIC II (the "REMIC Reporting Agent").
The Trustee shall make elections to treat each of REMIC I and REMIC II as a
REMIC (which elections shall apply to the taxable period ending
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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
Trustee. The Trustee shall sign all tax information returns filed pursuant to
this Section and any other returns as may be required by the Code. The Holder of
the Class R-I Certificate is hereby designated as the "Tax Matters Person"
(within the meaning of Treas. Reg. ss.ss.1.860F-4(d)) for REMIC I, and the
Holder of the Class R-II Certificate is hereby designated as the "Tax Matters
Person" for REMIC II. The Trustee is hereby designated and appointed as the
agent of each such Tax Matters Person. Any Holder of a Residual Certificate will
by acceptance thereof appoint the Trustee as agent and attorney-in-fact for the
purpose of acting as Tax Matters Person for each of REMIC I and REMIC II during
such time as the Trustee 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, the Trustee 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 Trustee shall provide upon request and receipt of reasonable
compensation, such information as required in Section 860D(a)(6)(B) of the Code
to the Internal Revenue Service, to any Person purporting to transfer a Residual
Certificate to a Person other than a transferee permitted by Section 5.05(b),
and to any regulated investment company, real estate investment trust, common
trust fund, partnership, trust, estate, organization described in Section 1381
of the Code, or nominee holding an interest in a pass-through entity described
in Section 860E(e)(6) of the Code, any record holder of which is not a
transferee permitted by Section 5.05(b) (or which is deemed by statute to be an
entity with a disqualified member).
(d) The Trustee 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 and REMIC II or the Trust Fund.
(e) Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage Loans,
that the Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for such withholding. In the event
the Trustee withholds any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall, together with its monthly report to
such Certificateholders, indicate such amount withheld.
(f) The Trustee agrees 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 Servicer, as a
result of a breach of the Trustee's covenants set forth in this Section 9.12;
provided, the Trustee shall not 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
Section 10.01 TERMINATION UPON REPURCHASE BY THE SELLER OR ITS DESIGNEE
OR LIQUIDATION OF THE MORTGAGE LOANS.
(a) Subject to Section 10.02, the respective obligations and
responsibilities of the Seller, the Trustee and EMC created hereby, other than
the obligation of the Trustee to make payments to Certificateholders as
hereinafter set forth shall terminate upon:
(i) the repurchase by or at the direction of the Seller or its
designee of all Mortgage Loans and all related REO Property remaining
in the Trust at a price 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 Mortgage
Loan remaining in the Trust Fund or the disposition of all property
acquired with respect to any Mortgage Loan; provided, however, that in
the event that an advance has been made, but not yet recovered, at the
time of such termination, the Person having made such advance shall be
entitled to receive, notwithstanding such termination, any payments
received subsequent thereto with respect to which such advance was
made; or
(iii) the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement.
(b) In no event, however, shall the Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to
the Court of St. James's, living on the date of this Agreement.
(c) The right of the Seller or its designee to repurchase all the
Mortgage Loans pursuant to Subsection 10.01(a)(i) above shall be exercisable
only if (i) the aggregate Scheduled Principal Balance of the Mortgage Loans at
the time of any such repurchase is less than 10% of the Cut-off Date Balance or
(ii) the Seller, based upon an Opinion of Counsel, has determined that the REMIC
status of the REMIC I or REMIC II has been lost or that a substantial risk
exists that such REMIC status will be lost for the then-current taxable year. At
any time thereafter, in the case of (i) or (ii)
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above, the Seller may elect to terminate the REMIC I or REMIC II at any time,
and upon such election, the Seller or its designee, shall repurchase all the
Mortgage Loans.
(d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to 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 Mortgage Loans under Subsection 10.01 (a)(i) above is exercised, the
Seller and/or its designee shall deliver to the Trustee for deposit in the
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 and REMIC II. 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 Mortgage Loans are not sufficient to pay all of the Certificates
in full, any such deficiency will be allocated first, to the Subordinate
Certificates, in inverse order of their numerical designation, second to the
Senior Mezzanine Certificates, and then to the 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 Servicer shall deliver to the Trustee for deposit in the Distribution
Account all distributable amounts remaining in the Protected 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
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in the Distribution Account. Upon deposit by the 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 Protected Account and the Distribution Account shall
terminate, subject to the Trustee's obligation to hold any amounts payable to
the Certificateholders in trust without interest pending final distributions
pursuant to this Subsection 10.01(f).
(g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.
Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS. (a) If the option of
the Seller to repurchase all the Mortgage Loans under Subsection 10.01(a)(i)
above is exercised, the Trust Fund and each of REMIC I and REMIC II 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 each of REMIC I and REMIC II 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 and REMIC II in the case of a termination under
Subsection 10.01(a)(i), or a plan of complete liquidation of REMIC I in
the case of a termination under Subsection 10.01(c), provided to it by
the Seller meeting the requirements of a "qualified liquidation" under
Section 860F of the Code and any regulations thereunder.
(ii) the Seller shall notify the Trustee at the commencement
of such 90-day liquidation period and, at or prior to the time of
making of the final payment on the Certificates, the Trustee shall sell
or otherwise dispose of all of the remaining assets of the Trust Fund
in accordance with the terms hereof; and
(iii) at or after the time of adoption of such a plan of
complete liquidation of any of REMIC I and REMIC II and at or prior to
the final Distribution Date, the Trustee shall sell for cash all of the
assets of the Trust to or at the direction of the Seller, and REMIC I
and REMIC II, 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
REMIC upon the written request of the Seller, and to take such action in
connection therewith as may be reasonably requested by the Seller and (ii)
appoint the Seller as their attorney-in-fact, with full power of substitution,
for purposes of adopting
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such a plan of complete liquidation. The Trustee shall adopt such plan of
liquidation by filing the appropriate statement on the final tax return of each
REMIC. Upon complete liquidation or final distribution of all of the assets of
the Trust Fund, the Trust Fund and each of REMIC I and REMIC II shall terminate.
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ARTICLE XI
Miscellaneous Provisions
Section 11.01 INTENT OF PARTIES. The parties intend that each of REMIC
I and REMIC II 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 and the Trustee, and the Servicing Agreement may be
amended from time to time by EMC, the 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
Seller and the Trustee, and the Servicing Agreement may also be amended from
time to time by EMC, the 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 or REMIC II 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, EMC, the
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.
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(e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement.
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 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,
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each and every Certificateholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
Section 11.05 ACTS OF CERTIFICATEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Seller. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Seller,
if made in the manner provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Seller, the 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 Seller, the 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 Seller, the 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 Seller, the 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 Seller, or the Servicer, as the case may be.
-77-
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,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice
President-Servicing, telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇, 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, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice
President-Servicing, telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (iv) in
the case of the Servicer, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention:
BART 2002-6), 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, ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and
Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Any notice delivered to the Seller, the
Servicer 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.
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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 Agreement;
2. The occurrence of any Event of Default that has not been
cured;
3. The resignation or termination of the Servicer under the
Servicing Agreement or the Trustee under this Agreement;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Protected Account or the
Distribution Account.
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IN WITNESS WHEREOF, the Seller, the Trustee and EMC Mortgage
Corporation 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/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
EMC MORTGAGE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
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/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of May, 2002 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, known to me to be a Managing
Director 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 MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 31st day of May, 2002 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, known to me to be an Assistant
Vice President of ▇▇▇▇▇ 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 31st day of May, 2002 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇, 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-_] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT
PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED WILL
BE REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT WILL
BE MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
A-1
Certificate No._ Variable Pass-Through Rate
Class [A-_] Senior
Aggregate Initial Current Principal Amount of
Date of Pooling and Servicing Agreement and this Senior Certificate as of the Cut-off Date:
Cut-off Date: May 1, 2002 $___________
Initial Current Principal Amount of this Senior
First Distribution Date: Certificate as of the Cut-off Date:
June 25, 2002 $___________
Servicer:
HSBC Mortgage Corporation (USA) CUSIP:___________
Assumed Final Distribution Date:
June 25, 2032
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2002-6
evidencing a fractional undivided interest in the distributions
allocable to the Class [A-_] Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties and individual condominium units sold by STRUCTURED ASSET
MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the 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 Servicer or the Trustee or
any of their affiliates or any other person. None of Structured Asset Mortgage
Investments Inc., the Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that __________ is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional adjustable rate mortgage
loans secured by first liens on one- to four- family residences, units in
planned unit developments and individual condominium units (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments Inc. ("SAMI").
The Mortgage Loans were sold by EMC Mortgage
A-2
Corporation ("EMC") to SAMI. HSBC Mortgage Corporation (USA) ("HSBC") will act
as servicer of the Mortgage Loans (the "Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement"), among SAMI, as seller (the "Seller"),
▇▇▇▇▇ Fargo Bank Minnesota, National Association as trustee (the "Trustee") and
EMC Mortgage Corporation, 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 or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
Initial Current Principal Amount of this Certificate is set forth above. The
Current Principal Amount hereof will be reduced to the extent of distributions
allocable to principal hereon and any Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in ten Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
A-3
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided; (i) the amendment thereof and the modification of the rights and
obligations of the Seller, the Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by EMC, the Seller, the
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.
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 Servicer, the Trustee and any agent of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of Seller, the 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
A-4
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-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: May __, 2002 ▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION
Not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A-_ Certificates referred to in the
within-mentioned Agreement.
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION Authorized signatory of ▇▇▇▇▇ Fargo
bank Minnesota, National Association, not in
its individual capacity but solely as Trustee
By:
------------------------------------------
Authorized Signatory
A-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
--------------------------------------------------------
Signature by or on behalf of assignor
---------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED WILL
BE REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT WILL
BE MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
A-2-1
Certificate No.1 Fixed Pass-Through Rate
Class X Senior
Date of Pooling and Servicing Agreement and Aggregate Notional Amount of this Senior
Cut-off Date: Certificate as of the Cut-off Date:
May 1, 2002 $_______________
Initial Notional Amount of this Senior
First Distribution Date: Certificate as of the Cut-off Date:
June 25, 2002 $_______________
Servicer:
HSBC Mortgage Corporation (USA) CUSIP:____________
Assumed Final Distribution Date:
June 25, 2032
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2002-6
evidencing a fractional undivided interest in the distributions
allocable to the Class X 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 individual condominium units sold by STRUCTURED ASSET
MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the 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 Servicer or the Trustee or
any of their affiliates or any other person. None of Structured Asset Mortgage
Investments Inc., the Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that __________ is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional adjustable rate mortgage
loans secured by first liens on one- to four- family residences, units in
planned unit developments and individual condominium units (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments Inc. ("SAMI").
The Mortgage Loans were sold by EMC Mortgage
A-2-2
Corporation ("EMC") to SAMI. HSBC Mortgage Corporation (USA) ("HSBC") will act
as Servicer of the Mortgage Loans (the "Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement"), among SAMI, as seller (the "Seller"),
EMC Mortgage Corporation and ▇▇▇▇▇ Fargo Bank Minnesota, 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 or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
Initial Current Principal Amount of this Certificate is set forth above. The
Current Principal Amount hereof will be reduced to the extent of distributions
allocable to principal hereon and any Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in ten Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
A-2-3
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided; (i) the amendment thereof and the modification of the rights and
obligations of the Seller, the Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by EMC, the Seller, the
Servicer 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.
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 Servicer, the Trustee and any agent of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of Seller, the 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
A-2-4
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-2-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: May __, 2002 ▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION
Not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class X Certificates referred to in the
within-mentioned Agreement.
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION Authorized signatory of ▇▇▇▇▇ Fargo
bank Minnesota, National Association, not in
its individual capacity but solely as Trustee
By:
------------------------------------------
Authorized Signatory
A-2-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
--------------------------------------------------------
Signature by or on behalf of assignor
---------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS [B-_] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE
HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
[THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER
ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A
PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A
QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH
CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM
TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.]
A-3-1
[THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT
RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR
CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO,
PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 95-60
OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY OBLIGATIONS
ON THE PART OF THE SELLER, THE SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND
WILL BE EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY
OR ON BEHALF OF AN INSTITUTIONAL ACCREDITED INVESTOR.]
A-3-2
Certificate No._ Variable Pass-Through Rate
Class [B-_]
Aggregate Initial Current Principal Amount of
Date of Pooling and Servicing Agreement and this Certificate as of the Cut-off Date:
Cut-off Date: May1, 2002 $_______
First Distribution Date: Initial Current Principal Amount of this
June 25, 2002 Certificate as of the Cut-off Date: $_______
Servicer:
HSBC Mortgage Corporation (USA) CUSIP: ___________
Assumed Final Distribution Date:
June 25, 2032
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2002-6
evidencing a fractional undivided interest in the distributions
allocable to the Class [B-_] Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties and individual condominium units sold by STRUCTURED ASSET
MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the 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 Servicer or the Trustee or
any of their affiliates or any other person. None of Structured Asset Mortgage
Investments Inc., the Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that_______________________________ is the
registered owner of the Fractional Undivided Interest evidenced hereby in the
beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund") generally consisting of conventional
adjustable rate mortgage loans secured by first liens on one- to four- family
residences and individual condominium units (collectively, the "Mortgage Loans")
sold by Structured Asset Mortgage Investments Inc. ("SAMI"). The Mortgage Loans
were sold by EMC Mortgage Corporation ("EMC") to SAMI. HSBC Mortgage Corporation
(USA) ("HSBC") will act as servicer of the Mortgage Loans (the "Servicer," which
term includes any successors thereto under the
A-3-3
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"), ▇▇▇▇▇ Fargo Bank Minnesota,
National Association as trustee (the "Trustee") and EMC Mortgage Corporation 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 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.
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: (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, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ ▇▇-▇▇
or PTE 96-23 and (ii) will not give rise to any additional fiduciary obligations
on the part of the Seller, the 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 ten 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 Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by EMC, the Seller, the
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
A-3-5
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 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 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: May __, 2002 ▇▇▇▇▇ FARGO BANK MINNESOTA, 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.
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION Authorized signatory of ▇▇▇▇▇ Fargo
bank Minnesota, 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.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
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 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
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
A-4-1
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-4-2
Certificate No._ Variable Pass-Through Rate
Class [R-_] Senior
Aggregate Initial Current Principal Amount of
Date of Pooling and Servicing Agreement and this Certificate as of the Cut-off Date:
Cut-off Date: May 1, 2002 $50.00
First Distribution Date: Initial Current Principal Amount of this
June 25, 2002 Certificate as of the Cut-off Date: $50.00
Servicer:
HSBC Mortgage Corporation (USA) CUSIP: ___________
Assumed Final Distribution Date:
June 25, 2032
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2002-6
evidencing a fractional undivided interest in the distributions
allocable to the Class [R-_] Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties and individual condominium units sold by STRUCTURED ASSET
MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the 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 Servicer or the Trustee or
any of their affiliates or any other person. None of Structured Asset Mortgage
Investments Inc., the Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that ______________________________ is the
registered owner of the Fractional Undivided Interest evidenced hereby in the
beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund") generally consisting of conventional
adjustable rate mortgage loans secured by first liens on one- to four- family
residences and individual condominium units (collectively, the "Mortgage Loans")
sold by Structured Asset Mortgage Investments Inc. ("SAMI"). The Mortgage Loans
were sold by EMC Mortgage Corporation ("EMC") to SAMI. HSBC Mortgage Corporation
(USA) ("HSBC") will act as servicer of the Mortgage Loans (the "Servicer," which
term includes any successors thereto under the Agreement
A-4-3
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"), ▇▇▇▇▇ Fargo Bank Minnesota,
National Association as trustee (the "Trustee") and EMC Mortgage Corporation, 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-4-4
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 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 ten 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 Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by EMC, the Seller, the
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.
A-4-5
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate 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 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 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-4-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: May __, 2002 ▇▇▇▇▇ FARGO BANK MINNESOTA, 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.
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION Authorized signatory of ▇▇▇▇▇ Fargo
bank Minnesota, National Association, not in
its individual capacity but solely as Trustee
By:
------------------------------------------
Authorized Signatory
A-4-7
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.
A-4-1
EXHIBIT B
MORTGAGE LOAN SCHEDULE
[PROVIDED UPON REQUEST]
B-1
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: ▇▇▇▇▇ Fargo Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: Pooling and Servicing Agreement dated as of
May 1, 2002, among SAMI,
EMC Mortgage Corporation and
▇▇▇▇▇ Fargo Bank Minnesota,
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
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 ▇▇▇▇▇▇▇ ARM Trust, Mortgage Pass-Through Certificates,
Series 2002-6, 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.
E-1
6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.
7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.
[NAME OF INVESTOR]
By:
-------------------------------------------------
[Name of Officer]
[Title of Officer]
[Address of Investor for receipt of distributions]
Address of Investor
for receipt of tax
information:
E-2
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of _________, 20___.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the ___ day of ___________________, 20___.
E-3
EXHIBIT F-1
FORM OF INVESTMENT LETTER
[Date]
[SELLER]
▇▇▇▇▇ Fargo Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Structured Asset Mortgage Investments Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Structured Asset Mortgage Investments Inc., Bear ▇▇▇▇▇▇▇ ARM Trust,
Series 2002-6 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)
F-1-1
unless subsequently registered under the Act and any
applicable state securities or "Blue Sky" laws or an
exemption from the registration requirements of the
Act and any applicable state securities or "Blue Sky"
laws is available;
(vi) we agree that in the event that at some future time
we wish to dispose of or exchange any of the
Privately Offered Certificates (such disposition or
exchange not being currently foreseen or
contemplated), we will not transfer or exchange any
of the Privately Offered Certificates unless:
(A) (1) the sale is to an Eligible Purchaser
(as defined below), (2) if required by the Pooling
and Servicing Agreement (as defined below) a letter
to substantially the same effect as either this
letter or, if the Eligible Purchaser is a Qualified
Institutional Buyer as defined under Rule 144A of the
Act, the Rule 144A and Related Matters Certificate in
the form attached to the Pooling and Servicing
Agreement (as defined below) (or such other
documentation as may be acceptable to the Trustee) is
executed promptly by the purchaser and delivered to
the addressees hereof and (3) all offers or
solicitations in connection with the sale, whether
directly or through any agent acting on our behalf,
are limited only to Eligible Purchasers and are not
made by means of any form of general solicitation or
general advertising whatsoever; and
(B) if the Privately Offered Certificate is
not registered under the Act (as to which we
acknowledge you have no obligation), the Privately
Offered Certificate is sold in a transaction that
does not require registration under the Act and any
applicable state securities or "blue sky" laws and,
if 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
F-1-2
Exemption ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇
▇▇-▇▇, ▇▇▇ ▇▇-▇▇ or Section 401(c) of ERISA and the
regulations promulgated thereunder and (II) will not
give rise to any additional fiduciary duties on the
part of the Seller, the Servicer or the Trustee.
(ix) We understand that each of the Class B-4, Class B-5
and Class B-6 Certificates bears, and will continue
to bear, a legend to substantiate the following
effect: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
(A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED
FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
THE MEANING THEREOF IN RULE 501(A)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN
WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED
DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS
F-1-3
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, ▇▇▇
▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ 96-23 OR SECTION
401(C) OF ERISA AND THE REGULATIONS TO BE PROMULGATED
THEREUNDER AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL FIDUCIARY DUTIES ON THE PART OF THE
SELLER, THE SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY
CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE
EVIDENCED BY A REPRESENTATION OR AN OPINION OF
COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF A HOLDER OF
A PRIVATE CERTIFICATE."
"ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.
Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of May 1, 2002, among
Structured Asset Mortgage Investments Inc., EMC Mortgage Corporation and ▇▇▇▇▇
Fargo Bank Minnesota, 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]
▇▇▇▇▇ Fargo Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Structured Asset Mortgage Investments Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Structured Asset Mortgage Investments Inc., Bear ▇▇▇▇▇▇▇ ARM Trust,
Series 2002-6 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
Act1; or
--------
1 A purchase by an insurance company for one or more of its separate
accounts, as defined by Section 2(a)(37) of the Investment Company Act of
1940, which are neither registered nor required to be registered
thereunder, shall be deemed to be a purchase for the account of such
insurance company.
F-2-1
(y) |_| an investment company registered under the
Investment Company Act or any business
development company as defined in Section
2(a)(48) of the Investment Company Act of
1940; or
(z) |_| a Small Business Investment Company
licensed by the U.S. Small Business
Administration under Section 301(c) or (d)
of the Small Business Investment Act of
1958; or
(aa) |_| a plan (i) established and maintained by
a state, its political subdivisions, or any
agency or instrumentality of a state or its
political subdivisions, the laws of which
permit the purchase of securities of this
type, for the benefit of its employees and
(ii) the governing investment guidelines of
which permit the purchase of securities of
this type; or
(bb) |_| a business development company as defined in
Section 202(a)(22) of the Investment
Advisers Act of 1940; or
(cc) |_| a corporation (other than a U.S. bank,
savings and loan association or equivalent
foreign institution), partnership,
Massachusetts or similar business trust, or
an organization described in Section
501(c)(3) of the Internal Revenue Code; or
(dd) |_| a U.S. bank, savings and loan association or
equivalent foreign institution, which has an
audited net worth of at least $25 million as
demonstrated in its latest annual financial
statements; or
(ee) |_| an investment adviser registered under the
Investment Advisers Act; or
b. |_| greater than $10 million, and the undersigned is a
broker-dealer registered with the SEC; or
c. |_| less than $ 10 million, and the undersigned is a
broker-dealer registered with the SEC and
will only purchase Rule 144A securities in
transactions in which it acts as a riskless
principal (as defined in Rule 144A); or
d. |_| less than $100 million, and the undersigned is an
investment company registered under the Investment
Company Act of 1940, which, together with one or more
registered investment companies having the same or an
affiliated investment adviser, owns at least $100
million of eligible securities; or
e. |_| less than $100 million, and the undersigned is an
entity, all the equity owners of which are
qualified institutional buyers.
F-2-2
The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the Privately
Offered Certificates may be resold, pledged or transferred only to (i) a person
reasonably believed to be a Qualified Institutional Buyer that purchases for its
own account or for the account of a Qualified Institutional Buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance in Rule
144A, or (ii) an institutional "accredited investor," as such term is defined
under Rule 501 of the Act in a transaction that otherwise does not constitute a
public offering.
The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement, dated as of May 1, 2002, among Structured Asset Mortgage
Investments Inc., EMC Mortgage Corporation and ▇▇▇▇▇ Fargo Bank Minnesota,
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") ▇▇- ▇▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 95-60, PTE 96-23 or Section
401(c) of ERISA and the regulations to be promulgated thereunder and (II) will
not give rise to any additional fiduciary duties on the part of the Seller, the
Servicer or the Trustee.
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
F-2-3
Name of Nominee (if any):
IN WITNESS WHEREOF, this document has been executed by the undersigned who is
duly authorized to do so on behalf of the undersigned Eligible Purchaser on the
____ day of ___________, 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-1
SERVICING AGREEMENT
HSBC Mortgage Corporation (USA)
[SEE TAB 7]
G-1-1
EXHIBIT G-2
UNDERLYING PURCHASE AGREEMENT
[SEE TAB 6]
G-2-1
EXHIBIT H
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
[SEE TAB 5]
H-1
EXHIBIT I
MORTGAGE LOAN PURCHASE AGREEMENT
[PROVIDED UPON REQUEST]
I-1
EXHIBIT J-1
INITIAL CERTIFICATION
May __, ▇▇__
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc., Series 2002-4
Re: Pooling and Servicing Agreement, dated as of May 1, 2002,
by and among Structured Asset Mortgage Investments Inc.,
EMC Mortgage Corporation and ▇▇▇▇▇ Fargo Bank
Minnesota, National Association relating to Bear ▇▇▇▇▇▇▇
ARM Trust, Mortgage Pass-Through Certificates, Series 2002-6
------------------------------------------------------------
Ladies and Gentlemen:
Subject to Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, 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 Pooling and
Servicing Agreement.
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
----------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF INTERIM CERTIFICATION
May __, ▇▇__
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc., Series 2002-6
Re: Pooling and Servicing Agreement, dated as of May 1, 2002,
by and among ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, Structured Asset Mortgage Investments Inc. and
EMC Mortgage Corporation relating to Bear ▇▇▇▇▇▇▇ ARM
Trust, Mortgage Pass-Through Certificates, Series 2002-6
--------------------------------------------------------
Ladies and Gentlemen:
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 Pooling and
Servicing Agreement.
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF FINAL CERTIFICATION
May __, ▇▇__
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc., Series 2002-6
Re: Pooling and Servicing Agreement, dated as of May 1, 2002,
by and among ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, Structured Asset Mortgage Investments Inc. and
EMC Mortgage Corporation relating to Bear ▇▇▇▇▇▇▇ ARM
Trust, Mortgage Pass-Through Certificates, Series 2002-6
--------------------------------------------------------
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:
(a) 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;
(b) 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;
(c) 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;
(d) 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
J-3-1
assignment or assignments of the Mortgage certified by the public
recording office in which such assignment or assignments have been
recorded; and
(e) 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.
▇▇▇▇▇ FARGO BANK
MINNESOTA, NATIONAL
ASSOCIATION
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
J-3-2