STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,
SELLER
JPMORGAN CHASE BANK,
TRUSTEE
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
MASTER SERVICER AND SECURITIES ADMINISTRATOR
and
EMC MORTGAGE CORPORATION
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POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2003
--------------------------------------------------------------
Structured Asset Mortgage Investments Inc.
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates
Series 2003-1
TABLE OF CONTENTS
ARTICLE I
Definitions
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE.............................................-35-
Section 2.02 ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE.............................................-38-
Section 2.03 ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE AGREEMENT......................-40-
Section 2.04 SUBSTITUTION OF MORTGAGE LOANS......................................................-41-
Section 2.05 ISSUANCE OF CERTIFICATES............................................................-42-
Section 2.06 REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER................................-42-
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 MASTER SERVICER.....................................................................-44-
Section 3.02 REMIC-RELATED COVENANTS.............................................................-45-
Section 3.03 MONITORING OF SERVICERS.............................................................-45-
Section 3.04 FIDELITY BOND.......................................................................-46-
Section 3.05 POWER TO ACT; PROCEDURES............................................................-46-
Section 3.06 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS..........................................-47-
Section 3.07 RELEASE OF MORTGAGE FILES...........................................................-47-
Section 3.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER TO BE HELD FOR TRUSTEE.....................................................-48-
Section 3.09 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES..............................-49-
Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS....................................-49-
Section 3.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES..............................-50-
Section 3.12 TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES AND DOCUMENTS............-50-
Section 3.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS...........................................-51-
Section 3.14 COMPENSATION FOR THE MASTER SERVICER................................................-51-
Section 3.15 REO PROPERTY........................................................................-51-
Section 3.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.......................................-52-
Section 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT....................................-52-
Section 3.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION...............................-53-
Section 3.19 EMC.................................................................................-54-
Section 3.20 UCC.................................................................................-54-
Section 3.21 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.......................................-54-
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ARTICLE IV
Accounts
Section 4.01 PROTECTED ACCOUNTS..................................................................-55-
Section 4.02 MASTER SERVICER COLLECTION ACCOUNT..................................................-56-
Section 4.03 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER SERVICER
COLLECTION ACCOUNT..................................................................-57-
Section 4.04 DISTRIBUTION ACCOUNT................................................................-58-
Section 4.05 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION ACCOUNT...................-58-
Section 4.06 RESERVE FUND........................................................................-60-
Section 4.07 CLASS XP RESERVE ACCOUNT............................................................-61-
ARTICLE V
Certificates
Section 5.01 CERTIFICATES........................................................................-62-
Section 5.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES...............................-70-
Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES...................................-73-
Section 5.04 PERSONS DEEMED OWNERS...............................................................-74-
Section 5.05 TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES......................................-74-
Section 5.06 RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES.....................................-75-
Section 5.07 ERISA RESTRICTIONS..................................................................-76-
Section 5.08 RULE 144A INFORMATION...............................................................-77-
ARTICLE VI
Payments to Certificateholders
Section 6.01 DISTRIBUTIONS ON THE CERTIFICATES...................................................-78-
Section 6.02 ALLOCATION OF LOSSES................................................................-81-
Section 6.03 PAYMENTS............................................................................-81-
Section 6.04 STATEMENTS TO CERTIFICATEHOLDERS....................................................-82-
Section 6.05 MONTHLY ADVANCES....................................................................-84-
Section 6.06 COMPENSATING INTEREST PAYMENTS......................................................-85-
ARTICLE VII
The Master Servicer
Section 7.01 LIABILITIES OF THE MASTER SERVICER..................................................-86-
Section 7.02 MERGER OR CONSOLIDATION OF THE MASTER SERVICER......................................-86-
Section 7.03 INDEMNIFICATION OF THE TRUSTEE, THE MASTER SERVICER AND THE
SECURITIES ADMINISTRATOR............................................................-86-
Section 7.04 LIMITATIONS ON LIABILITY OF THE MASTER SERVICER AND OTHERS..........................-87-
Section 7.05 MASTER SERVICER NOT TO RESIGN.......................................................-88-
Section 7.06 SUCCESSOR MASTER SERVICER...........................................................-88-
Section 7.07 SALE AND ASSIGNMENT OF MASTER SERVICING.............................................-88-
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ARTICLE VIII
Default
Section 8.01 EVENTS OF DEFAULT...................................................................-90-
Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR............................................-92-
Section 8.03 NOTIFICATION TO CERTIFICATEHOLDERS..................................................-93-
Section 8.04 WAIVER OF DEFAULTS..................................................................-93-
Section 8.05 LIST OF CERTIFICATEHOLDERS..........................................................-93-
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 DUTIES OF TRUSTEE...................................................................-94-
Section 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR..............-96-
Section 9.03 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR MORTGAGE LOANS......................................................-98-
Section 9.04 TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES...........................-98-
Section 9.05 TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND EXPENSES..........................-98-
Section 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES ADMINISTRATOR...................-99-
Section 9.07 INSURANCE...........................................................................-99-
Section 9.08 RESIGNATION AND REMOVAL OF THE TRUSTEE AND SECURITIES ADMINISTRATOR.................-99-
Section 9.09 SUCCESSOR TRUSTEE AND SUCCESSOR SECURITIES ADMINISTRATOR...........................-100-
Section 9.10 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES ADMINISTRATOR.....................-101-
Section 9.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE......................................-101-
Section 9.12 FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS; REMIC ADMINISTRATION...........................................-102-
ARTICLE X
Termination
Section 10.01 TERMINATION UPON REPURCHASE BY EMC OR ITS DESIGNEE OR
LIQUIDATION OF THE MORTGAGE LOANS..................................................-105-
Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS................................................-107-
ARTICLE XI
Miscellaneous Provisions
Section 11.01 INTENT OF PARTIES..................................................................-109-
Section 11.02 AMENDMENT..........................................................................-109-
Section 11.03 RECORDATION OF AGREEMENT...........................................................-110-
Section 11.04 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.........................................-110-
Section 11.05 ACTS OF CERTIFICATEHOLDERS.........................................................-111-
Section 11.06 GOVERNING LAW......................................................................-112-
Section 11.07 NOTICES............................................................................-112-
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Section 11.08 SEVERABILITY OF PROVISIONS.........................................................-112-
Section 11.09 SUCCESSORS AND ASSIGNS.............................................................-113-
Section 11.10 ARTICLE AND SECTION HEADINGS.......................................................-113-
Section 11.11 COUNTERPARTS.......................................................................-113-
Section 11.12 NOTICE TO RATING AGENCIES..........................................................-113-
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EXHIBITS
Exhibit A-1 - Form of Class A Certificates
Exhibit A-2 - Form of Class M Certificates
Exhibit A-3 - Form of Class R Certificates
Exhibit A-4 - Form of Class B-IO Certificates
Exhibit A-5 - Form of Class XP Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - [Reserved]
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit G - Form of Custodial Agreement
Exhibit H-1 - ABN AMRO Servicing Agreement
Exhibit H-2 - Alliance Servicing Agreement
Exhibit H-3 - Bank of America Servicing Agreements
Exhibit H-4 - Cendant Servicing Agreements
Exhibit H-5 - Commercial Federal Servicing Agreement
Exhibit H-6 - Countrywide Servicing Agreement
Exhibit H-7 - EMC Servicing Agreement
Exhibit H-8 - GMAC Servicing Agreement
Exhibit H-9 - IndyMac Servicing Agreement
Exhibit H-10 - SunTrust Servicing Agreement
Exhibit H-11 - U.S. Bank Servicing Agreement
Exhibit H-12 - Washington Mutual Servicing Agreement
Exhibit H-13 - ▇▇▇▇▇ Fargo Servicing Agreement
Exhibit I - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
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POOLING AND SERVICING AGREEMENT
-------------------------------
Pooling and Servicing Agreement dated as of April 1, 2003, among Structured
Asset Mortgage Investments Inc., a Delaware corporation, as seller (the
"Seller"), JPMorgan Chase Bank, a New York banking corporation, not in its
individual capacity but solely as trustee (the "Trustee"), ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as master servicer (in such capacity, the
"Master Servicer") and as securities administrator (in such capacity, the
"Securities Administrator") and EMC Mortgage Corporation ("EMC").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Seller acquired the Mortgage Loans
from EMC. On the Closing Date, the Seller will sell the Mortgage Loans and
certain other property to the Trust Fund and receive in consideration therefor
Certificates evidencing the entire beneficial ownership interest in the Trust
Fund.
The Trustee on behalf of the Trust shall make an election for the assets
constituting REMIC I to be treated for federal income tax purposes as a REMIC.
On the Startup Day, the REMIC I Regular Interests will be designated "regular
interests" in such REMIC and the Class R-I Certificate will be designated the
sole class of "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the REMIC I
Regular Interests, which constitute REMIC II to be treated for federal income
tax purposes as a REMIC. On the Startup Day, the 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 $632,190,222.63. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance.
In consideration of the mutual agreements herein contained, the Seller, the
Master Servicer, the Securities Administrator, EMC and the Trustee agree as
follows:
ARTICLE 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.
ABN AMRO: ABN AMRO Mortgage Group, Inc.
ABN AMRO SERVICING AGREEMENT: The Purchase, Warranties and Servicing
Agreement, dated as of May 1, 2001, between ABN AMRO and EMC attached hereto as
Exhibit H-1.
ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage servicing practices of prudent
mortgage servicing institutions that master service mortgage loans of the same
type and quality as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located, to the extent applicable to the Trustee or the
Master Servicer (except in its capacity as successor to a Servicer), or (y) as
provided in the applicable Servicing Agreement, to the extent applicable to any
Servicer, but in no event below the standard set forth in clause (x).
ACCOUNT: The Master Servicer Collection Account, the Distribution Account
or the Protected Account or the Class XP Reserve Account as the context may
require.
ADDITIONAL COLLATERAL: As defined in the Additional Collateral Assignment
and Servicing Agreement, dated April 26, 2001, between EMC and Cendant.
AFFILIATE: As to any Person, any other Person controlling, controlled by or
under common control with such Person. "Control" means the power to direct the
management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
AGREEMENT: This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto.
ALLIANCE: Alliance Mortgage Company.
ALLIANCE SERVICING AGREEMENT: The Subservicing Agreement, dated as of
January 1, 2002, between Alliance Mortgage Company and EMC attached hereto as
Exhibit H-2.
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 ▇▇▇▇▇'▇.
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APPLICABLE STATE LAW: For purposes of Section 9.12(d), the Applicable State
Law shall be (a) the law of the State of New York and (b) such other state law
whose applicability shall have been brought to the attention of the Securities
Administrator and the Trustee by either (i) an Opinion of Counsel reasonably
acceptable to the Securities Administrator and the Trustee delivered to it by
the Master Servicer or the Seller, or (ii) written notice from the appropriate
taxing authority as to the applicability of such state law.
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date and the
Class M Certificates, the sum of the Realized Losses with respect to the
Mortgage Loans, which are to be applied in reduction of the Certificate
Principal Balance of such Class of Certificates pursuant to this Agreement,
which shall equal on any such Distribution Date(so long as their Certificate
Principal Balance have not been reduced to zero) the amount, if any, by which,
(i) the aggregate Certificate Principal Balance of all of the Certificates
(after all distributions of principal on such Distribution Date) exceeds (ii)
the aggregate Stated Principal Balance of all of the Mortgage Loans as of the
last day of the related Due Period.
APPRAISED VALUE: For any Mortgaged Property related to a Mortgage Loan, the
amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
ASSIGNMENT AGREEMENTS: The agreements attached hereto as Exhibit I, whereby
the Servicing Agreements were assigned to the Trustee for the benefit of the
Certificateholders.
ASSIGNMENT OF PROPRIETARY LEASE: With respect to a Cooperative Loan, the
assignment of the related Cooperative Lease from the Mortgagor to the originator
of the Cooperative Loan.
ASSUMED FINAL DISTRIBUTION DATE: May 25, 2033, or if such day is not a
Business Day, the next succeeding Business Day.
AVAILABLE FUNDS: With respect to each Distribution Date, the aggregate of
Principal Funds and Interest Funds for such Distribution Date.
BANK OF AMERICA: Bank of America, or its successor in interest.
BANK OF AMERICA SERVICING AGREEMENTS: (i) The Flow Mortgage Loan Sale and
Servicing Agreement, dated as of March 1, 2003, between EMC Mortgage Corporation
and Bank of America, (ii) the Mortgage Loan Sale and Servicing Agreement, dated
as of November 11, 2000, between EMC Mortgage Corporation and Bank of America,
(iii) the Mortgage Loan Sale and Servicing Agreement, dated as of November 21,
2000, between EMC Mortgage Corporation and Bank of America, (iv) the Mortgage
Loan Sale and Servicing Agreement, dated as of December 13, 2000, between EMC
Mortgage Corporation and Bank of America, (v) the Mortgage Loan Sale and
Servicing Agreement, dated as of December 13, 2000, between EMC Mortgage
Corporation and Bank of America, (vi) the Mortgage Loan Sale and Servicing
Agreement, dated as of January 16, 2001, between EMC Mortgage Corporation and
Bank of America, (vii) the Mortgage Loan Sale and Servicing Agreement, dated as
of February 6, 2001, between EMC Mortgage Corporation and Bank of America,
(viii) the Mortgage Loan Sale and Servicing Agreement, dated as of February 28,
2001,
-3-
between EMC Mortgage Corporation and Bank of America and (ix) the Mortgage Loan
Sale and Servicing Agreement, dated as of March 15, 2001, between EMC Mortgage
Corporation and Bank of America, each as attached hereto as Exhibit H-3.
BANKRUPTCY CODE: The United States Bankruptcy Code, as amended as codified
in 11 U.S.C. ▇▇.▇▇. 101-1330.
BASIS RISK SHORTFALL: With respect to any Distribution Date for and the
Class I-A, Class II-A or Class M Certificates, the excess, if any, of (a) the
amount of Current Interest that the Class I-A, Class II-A or Class M
Certificates, as applicable, would have been entitled to receive on such
Distribution Date had the related Pass-Though Rate been calculated at a per
annum rate equal to One-Month LIBOR plus the related Margin, over (b) the amount
of Current Interest on such Class of Certificates calculated using a Pass-Though
Rate equal to the lesser of (i) the Net Rate Cap and (ii) 11.50%.
BASIS RISK SHORTFALL CARRY FORWARD AMOUNT: With respect to any Distribution
Date and the I-A, Class II-A or Class M Certificates, Basis Risk Shortfalls for
all previous Distribution Dates not previously paid, together with interest
thereon at a rate equal to the related Pass-Through Rate for such Class of
Certificates for such Distribution Date.
BOOK-ENTRY CERTIFICATES: Initially, all Classes of Certificates other than
the Class B-IO, Class XP 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, the Master
Servicer, any Servicer or the Securities Administrator are authorized or
obligated by law or executive order to be closed.
CALENDAR QUARTER: January 1 to March 31, April 1 to June 30, July 1 to
September 30, or October 1 to December 31, as applicable.
CAP CONTRACTS: Each of the two Cap Contracts, both dated April 30, 2003
between the Trustee, on behalf of the Class I-A Certificateholders or Class M
Certificateholders, as applicable, and Bear ▇▇▇▇▇▇▇ Financial Products Inc.
CAP CONTRACT PAYMENT AMOUNT: With respect to any Distribution Date, the
amount received from the Cap Contracts.
CENDANT: Cendant Mortgage Corporation.
CENDANT SERVICING AGREEMENT: (i) The Mortgage Loan Flow Purchase, Sale and
Servicing Agreement dated as of April 26, 2001, among EMC (as purchaser),
Cendant and ▇▇▇▇▇▇'▇ Gate Residential Mortgage Trust (formerly known as Cendant
Residential Mortgage Trust) (as sellers) and (ii) the Additional Collateral
Assignment and Servicing Agreement, dated April 26, 2001, between EMC and
Cendant, each as attached hereto as Exhibit H-4.
-4-
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-5,
with the blanks therein appropriately completed.
CERTIFICATE GROUP: The Group 1 Senior Certificates and Group 2 Senior
Certificates as applicable, and the Subordinate Certificates to the extent such
Certificates represent an interest in such groups of Certificates.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a Certificate
registered in the name of the Depository or its nominee.
CERTIFICATE PRINCIPAL BALANCE: With respect to any Certificate (other than
Class B-IO Certificate or Class R 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, and (ii) in the case of the Class M Certificates, any Applied
Realized Loss Amounts allocated to such Certificates on previous Distribution
Dates. With respect to any such Class of Certificates, the Certificate Principal
Balance thereof will equal the sum of the Certificate Principal Balances of all
Certificates in such Class.
CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.
CERTIFICATEHOLDER: A Holder of a Certificate.
CLASS: With respect to the Certificates, I-A, II-A, R-I, R-II, M, XP and
B-IO.
CLASS A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an amount
equal to the excess, if any, of (i) the aggregate Certificate Principal Balance
of the Class A Certificates immediately prior to such Distribution Date over
(ii) the excess of (a) the aggregate Stated Principal Balance of the Mortgage
Loans as of the last day of the related Due Period over (b) the product of (1)
the aggregate Stated Principal Balance of the related Mortgage Loans as of the
last day of the related Due Period and (2) the sum of (x) 5.0% and (y) the
Current Specified Overcollateralization Percentage for such Distribution Date.
CLASS B-IO DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
sum of (i) the Current Interest for the Class B-IO Certificate for such
Distribution Date and (ii) any Excess Overcollateralization Amount for such
Distribution Date to the extent available after distributions to the Class I-A,
Class II-A and Class M Certificates pursuant to Section 6.01(a); provided,
however, that on and after the Distribution Date on which the aggregate
Certificate Principal Balance of the Class I-A, Class II-A and Class M
Certificates has been reduced to zero, the Class B-IO Distribution Amount shall
include the Overcollateralization Amount.
CLASS B-IO PASS-THROUGH RATE: The Class B-IO Certificates will bear
interest at a per annum rate equal to the percentage equivalent of a fraction,
the numerator of which is (x) the sum of the amounts calculated pursuant to
clauses (A) through (F) below, and the denominator of which is (y) the aggregate
of the Uncertificated Principal Balances of REMIC I Regular Interest LT-AA,
REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular
Interest LT-M1 and
-5-
REMIC I Regular Interest LT-ZZ. For purposes of calculating the Pass-Through
Rate for the Class B-IO Certificates, the numerator is equal to the sum of the
following components:
(A) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT-AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-AA;
(B) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT-A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-A1;
(C) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT-A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-A2;
(D) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT-M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M1;
(E) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT-ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-ZZ; and
(F) 100% of the interest on REMIC I Regular Interest LT-XP.
CLASS M PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an amount
equal to the excess, if any, of (i) the Certificate Principal Balance of the
Class M Certificates immediately prior to such Distribution Date over (ii) the
excess of (a) the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period over (b) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date) and (2) the product of (x) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and
(y) the Current Specified Overcollateralization Percentage for such Distribution
Date.
CLASS R CERTIFICATES: The Class R-I Certificates and Class R-II
Certificates.
CLOSING DATE: April 30, 2003.
CODE: The Internal Revenue Code of 1986, as amended.
COMMERCIAL FEDERAL: Commercial Federal Mortgage Corporation.
COMMERCIAL FEDERAL SERVICING AGREEMENT: The Purchase, Warranties and
Servicing Agreement dated as of March 1, 2001, between EMC and Commercial
Federal as attached hereto as Exhibit H-5.
-6-
COMPENSATING INTEREST PAYMENT: As defined in Section 6.06.
COOPERATIVE: A private, cooperative housing corporation which owns or
leases land and all or part of a building or buildings, including apartments,
spaces used for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.
COOPERATIVE APARTMENT: A dwelling unit in a multi-dwelling building owned
or leased by a Cooperative, which unit the Mortgagor has an exclusive right to
occupy pursuant to the terms of a proprietary lease or occupancy agreement.
COOPERATIVE LEASE: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.
COOPERATIVE LOAN: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements and (v) a stock
power (or other similar instrument), and ancillary thereto, a recognition
agreement between the Cooperative and the originator of the Cooperative Loan,
each of which was transferred and assigned to the Trustee pursuant to Section
2.01 and are from time to time held as part of the Trust Fund.
COOPERATIVE STOCK: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
COOPERATIVE STOCK CERTIFICATE: With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.
CORPORATE TRUST OFFICE: The designated office of the Trustee where at any
particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Institutional Trust Services/Structured Finance Services, Structured
Asset Mortgage Investments Inc., Bear ▇▇▇▇▇▇▇ ALT-A Trust 2003-1, or at such
other address as the Trustee may designate from time to time.
CORRESPONDING CERTIFICATE: With respect to:
(i) REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, the Class A-1 Certificates,
(ii) REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, the Class A-2 Certificates,
(iii) REMIC I Regular Interest LT-M1, the Class M-1 Certificates, and
(iv) REMIC I Regular Interest LT-XP, the Class XP Certificates.
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COUNTRYWIDE: Countywide Home Loans, Inc.
COUNTRYWIDE SERVICING AGREEMENTS: (i) The Mortgage Loan Purchase and
Interim Servicing Agreement dated as of December 29, 1997, between Redwood
Trust, Inc. and Countrywide and (ii) the Mortgage Loan Purchase and Interim
Servicing Agreement dated as of April1, 1998, between RWT Holdings, Inc. and
Countrywide, each as attached hereto as Exhibit H-6.
CURRENT INTEREST: As of any Distribution Date, with respect to each Class
of Certificates (other than the Class XP Certificates and Class R Certificates),
(i) the interest accrued on the Certificate Principal Balance or Notional
Amount, as applicable, during the related Interest Accrual Period at the
applicable Pass-Through Rate plus any amount previously distributed with respect
to interest for such Certificate that has been recovered as a voidable
preference by a trustee in bankruptcy minus (ii) the sum of (a) any Prepayment
Interest Shortfall for such Distribution Date, to the extent not covered by
Compensating Interest Payments and (b) any shortfalls resulting from the
application of the Relief Act during the related Due Period; provided, however,
that for purposes of calculating Current Interest for any such Class, amounts
specified in clause (ii) hereof for any such Distribution Date shall be
allocated first to the Class B-IO Certificates and the Residual Certificates in
reduction of amounts otherwise distributable to such Certificates on such
Distribution Date and then any excess shall be allocated to each other Class of
Certificates pro rata based on the respective amounts of interest accrued
pursuant to clause (i) hereof for each such Class on such Distribution Date.
CURRENT SPECIFIED OVERCOLLATERALIZATION PERCENTAGE: For any Distribution
Date and the Class I-A, Class II-A and Class M Certificates, the percentage
equivalent of a fraction, the numerator of which is the Overcollateralization
Target Amount, and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period.
CUSTODIAL AGREEMENT: An agreement, dated as of the Closing Date among the
Seller, the Master Servicer, the Trustee and the Custodian in substantially the
form of Exhibit G hereto.
CUSTODIAN: ▇▇▇▇▇ Fargo Bank Minnesota, National Association, or any
successor custodian appointed pursuant to the provisions hereof and of the
Custodial Agreement.
CUT-OFF DATE: April 1, 2003.
CUT-OFF DATE BALANCE: $632,190,222.63.
DEBT SERVICE REDUCTION: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of the
Mortgaged Property by a court of competent jurisdiction in an amount less than
the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.
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DELINQUENT: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the last day of the month immediately succeeding the month in which such payment
was due. For example, a Mortgage Loan with a payment due on December 1 that
remained unpaid as of the close of business on January 31 would then be
considered to be 30 to 59 days delinquent. Similarly for "60 days delinquent,"
"90 days delinquent" and so on.
DEPOSITORY: The Depository Trust Company, the nominee of which is Cede &
Co., or any successor thereto.
DEPOSITORY AGREEMENT: The meaning specified in Subsection 5.01(a) hereof.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DESIGNATED DEPOSITORY INSTITUTION: A depository institution (commercial
bank, federal savings bank mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.
DETERMINATION DATE: With respect to each Mortgage Loan, the Determination
Date as defined in the related Servicing Agreement.
DISQUALIFIED ORGANIZATION: Any of the following: (i) the United States, any
State or political subdivision thereof, any possession of the United States, or
any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the ▇▇▇▇▇▇▇ Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an ownership interest in a Residual Certificate by such Person
may cause any REMIC contained in the Trust or any Person having an ownership
interest in the Residual Certificate (other than such Person) to incur a
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in a Residual Certificate
to such Person. The terms "United States," "State" and "international
organization" shall have the meanings set forth in Section 7701 of the Code or
successor provisions.
DISTRIBUTION ACCOUNT: The trust account or accounts created and maintained
pursuant to Section 4.04, which shall be denominated "JPMorgan Chase Bank, as
Trustee f/b/o holders of Structured Asset Mortgage Investments Inc., Bear
▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates, Series 2003-1 -
Distribution Account."
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DISTRIBUTION ACCOUNT DEPOSIT DATE: The Business Day prior to each
Distribution Date.
DISTRIBUTION DATE: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is not
a Business Day, the Business Day immediately following.
DTC CUSTODIAN: JPMorgan Chase Bank, 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 the related Scheduled Payment is due, as set forth in the related Mortgage
Note.
DUE PERIOD: With respect to any Distribution Date and each Mortgage Loan,
the period commencing on the second day of the month preceding the month in
which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) a segregated account maintained with a federal
or state chartered depository institution (A) the short-term obligations of
which are rated A-1 or better by Standard & Poor's and P-1 by Moody's at the
time of any deposit therein or (B) insured by the FDIC (to the limits
established by such Corporation), the uninsured deposits in which account are
otherwise secured such that, as evidenced by an Opinion of Counsel (obtained by
the Person requesting that the account be held pursuant to this clause (ii))
delivered to the Trustee prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in such account
and a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments, each of which shall mature not later
than the Business Day immediately preceding the Distribution Date next following
the date of investment in such collateral or the Distribution Date if such
Permitted Investment is an obligation of the institution that maintains the
Distribution Account) securing such funds that is superior to claims of any
other depositors or general creditors of the depository institution with which
such account is maintained, (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Distribution Account will not have an adverse effect on the
then-current ratings assigned to the Classes of the Certificates then rated by
the Rating Agencies). Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation.
EMC SERVICING AGREEMENT: The Servicing Agreement, dated as of April 1,
2003, between Structured Asset Mortgage Investments Inc. and EMC as attached
hereto as Exhibit H-7.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
EVENT OF DEFAULT: An event of default described in Section 8.01.
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EXCESS CASHFLOW: With respect to any Distribution Date, an amount, if any,
equal to the sum of (a) the Excess Overcollateralization Amount and (b) the
Remaining Excess Spread, in each case for such Distribution Date.
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.
EXCESS OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date,
the lesser of (i) Principal Funds and (ii) the excess, if any, of (a) the
Overcollateralization Amount over (b) the Overcollateralization Target Amount,
in each case for such Distribution Date.
EXCESS SPREAD: With respect to any Distribution Date, the excess, if any,
of (i) the Interest Funds for such Distribution Date, over (ii) the sum of the
Current Interest on the Offered Certificates and Interest Carry Forward Amounts
on the Class A Certificates, in each case for such Distribution Date.
EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date
after the first Distribution Date and the Class I-A, Class II-A and Class M
Certificates, the lesser of (i) the excess, if any, of the Overcollateralization
Target Amount for such Distribution Date over the Overcollateralization Amount
for such Distribution Date and (ii) the Excess Spread for such Distribution
Date.
▇▇▇▇▇▇ ▇▇▇: Federal National Mortgage Association or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
FINAL CERTIFICATION: The certification substantially in the form of Exhibit
Three to the Custodial Agreement.
FITCH: Fitch, Inc. and its successors in interest.
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 Certificate Principal Balance of such Certificate and
the denominator of which is the Certificate Principal Balance of such Class.
With respect to the Certificates in the aggregate, the fractional undivided
interest evidenced by (i) a Residual Certificate will each be deemed to equal
0.25% multiplied by the percentage interest of such Residual Certificate, (ii)
the Class B-IO Certificates will be deemed to equal 1.00% 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 Certificate Principal Balance of such
Certificate and the denominator of which is the aggregate Certificate Principal
Balance of all the Certificates.
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▇▇▇▇▇▇▇ 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).
GMAC: GMAC Mortgage Corporation.
GMAC SERVICING AGREEMENT: The Servicing Agreement, dated as of May 1, 2001,
between EMC and GMAC as attached hereto as Exhibit H-8.
GROSS MARGIN: As to each Mortgage Loan, the fixed percentage set forth in
the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the minimum and maximum Mortgage Interest Rate
and the Periodic Rate Cap) the Mortgage Interest Rate until the next Interest
Adjustment Date.
GROUP 1 NET WAC RATE: The weighted average of the Net Rates on the Group 1
Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof
as of the beginning of the related Due Period, adjusted to an effective rate
reflecting the accrual of interest on an actual/360 basis.
GROUP 2 NET WAC RATE: The weighted average of the Net Rates on the Group 2
Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof
as of the beginning of the related Due Period, adjusted to an effective rate
reflecting the accrual of interest on an actual/360 basis.
GROUP 1 SENIOR CERTIFICATES: The Class I-A Certificates.
GROUP 2 SENIOR CERTIFICATES: The Class II-A Certificates.
HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller or the Trustee or any Affiliate
thereof shall be deemed not to be outstanding and the Fractional Undivided
Interest evidenced thereby shall not be taken into account in determining
whether the requisite percentage of Fractional Undivided Interests necessary to
effect any such consent has been obtained.
INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Custodian and
the Securities Administrator, and their officers, directors, agents and
employees and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.
INDEPENDENT: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Seller or the Master
Servicer and of any Affiliate of the Seller
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or the Master Servicer, (b) does not have any direct financial interest or any
material indirect financial interest in the Seller or the Master Servicer or any
Affiliate of the Seller or the Master Servicer and (c) is not connected with the
Seller or the Master Servicer or any Affiliate as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
INDEX: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
INDIVIDUAL CERTIFICATE: Any Private Certificate registered in the name of
the Holder other than the Depository or its nominee.
INDYMAC: IndyMac Bank.
INDYMAC SERVICING AGREEMENT: The Master Purchase, Warranties and Servicing
Agreement, dated as of August 1, 2001, between EMC and IndyMac as attached
hereto as Exhibit H-9.
INITIAL CERTIFICATION: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the requirements of
Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or any
entity all of the equity holders in which come within such paragraphs.
INSURANCE POLICY: With respect to any Mortgage Loan, any standard hazard
insurance policy, flood insurance policy or title insurance policy.
INSURANCE PROCEEDS: Amounts paid by the insurer under any Insurance Policy
covering any Mortgage Loan or Mortgaged Property other than amounts required to
be paid over to the Mortgagor pursuant to law or the related Mortgage Note or
Security Instrument and other than amounts used to repair or restore the
Mortgaged Property or to reimburse insured expenses.
INTEREST ACCRUAL PERIOD: With respect to each Class of Certificates (other
than the Class B-IO, Class XP and Residual Certificates), the period from and
including the preceding Distribution Date (or, in the case of the first
Distribution Date, from the Closing Date) to and including the day prior to the
current Distribution Date. With respect to the Class B-IO Certificates, the
calendar month immediately preceding such Distribution Date.
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 CARRYFORWARD AMOUNT: As of any Distribution Date and with respect
to each Class of Certificates (other than the Class XP, Class B-IO and Residual
Certificates), the sum of (i) the excess of (a) the Current Interest for such
Class with respect to prior Distribution Dates over (b) the amount actually
distributed to such Class of Certificates with respect to interest on such prior
Distribution Dates and (ii) interest thereon (to the extent permitted by
applicable law) at the
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applicable Pass-Through Rate for such Class for the related Interest Accrual
Period including the Interest Accrual Period relating to such Distribution Date.
INTEREST FUNDS: For any Distribution Date and the related Loan Group (i)
the sum, without duplication, of (a) all scheduled interest collected in respect
to the related Mortgage Loans during the related Due Period less the Servicing
Fee, (b) all Advances relating to interest with respect to the related Mortgage
Loans made on or prior to the related Distribution Account Deposit Date, (c) all
Compensating Interest Payments with respect to the related Mortgage Loans and
required to be remitted by the Master Servicer pursuant to this Agreement or the
related Servicer pursuant to the related Servicing Agreement with respect to
such Distribution Date, (d) Liquidation Proceeds with respect to the Mortgage
Loans in the related Loan Group collected during the related Prepayment Period
(to the extent such Liquidation Proceeds relate to interest), (e) all amounts
relating to interest with respect to each Mortgage Loan in the related Loan
Group purchased by EMC pursuant to Sections 2.02 and 2.03 or by the Seller
pursuant to Section 3.21 and (f) all amounts in respect of interest paid by EMC
pursuant to Section 10.01, in each case to the extent remitted by EMC or the
related Servicer, as applicable, to the Distribution Account pursuant to this
Agreement or the related Servicing Agreement minus (ii) all amounts relating to
interest required to be reimbursed pursuant to Sections 4.01, 4.03 and 4.05 or
as otherwise set forth in this Agreement.
INTEREST ONLY CERTIFICATES: The Class B-IO Certificates.
INTERIM CERTIFICATION: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.
INVESTMENT LETTER: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private Certificates in
connection with such purchase, substantially in the form set forth as Exhibit
F-1 hereto.
LIBOR BUSINESS DAY: Any day other than a Saturday or a Sunday or a day on
which banking institutions in the city of London, England are required or
authorized by law to be closed.
LIBOR DETERMINATION DATE: With respect to the Class I-A, Class II-A and
Class M Certificates and for the first Interest Accrual Period, April 24, 2003.
With respect to the Class I-A, Class II-A and Class M Certificates and any
Interest Accrual Period thereafter, the second LIBOR Business Day preceding the
commencement of such Interest Accrual Period.
LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which the
Servicer or the Master Servicer has determined that all amounts it expects to
recover from or on account of such Mortgage Loan have been recovered.
LIQUIDATION DATE: With respect to any Liquidated Mortgage Loan, the date on
which the Servicer or the Master 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
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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.
LOAN GROUP: Loan Group 1 or Loan Group 2 as applicable.
LOAN GROUP 1: The group of Mortgage Loans designated as belonging to Loan
Group 1 on the Mortgage Loan Schedule.
LOAN GROUP 2: The group of Mortgage Loans designated as belonging to Loan
Group 2 on the Mortgage Loan Schedule.
LOST NOTES: The original Mortgage Notes that have been lost, as indicated
on the Mortgage Loan Schedule.
MARGIN: (A) With respect to any Distribution Date on or prior to the first
possible Optional Termination Date and (i) with respect to the Class I-A
Certificates, 0.38% per annum, (ii) with respect to the Class II-A Certificates,
0.30% per annum, and (iii) with respect to the Class M Certificates, 1.10% per
annum; and (B) with respect to any Distribution Date after the first possible
Optional Termination Date and (i) with respect to the Class I-A Certificates,
0.76% per annum, (ii) with respect to the Class II-A Certificates, 0.60% per
annum, and (iii) with respect to the Class M Certificates, 1.65% per annum.
MARKER RATE: With respect to the Class B-IO Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC I Pass-Through Rates for REMIC I Regular ▇▇▇▇▇▇▇▇
▇▇-▇▇, REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular Interest LT-M1 and REMIC
I Regular Interest LT-ZZ: with the rate on REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇
subject to a cap equal to (A) in the case of any Distribution Date up to and
including the Optional Termination Date, the lesser of (x) One-Month LIBOR plus
0.38% per annum and (y) the related Net Rate Cap and (B) in the case of any
Distribution Date after the Optional Termination Date, the lesser of (x)
One-Month LIBOR plus 0.76% per annum and (y) the related Net Rate Cap for the
purpose of this calculation; with the rate on REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇
subject to a cap equal to (A) in the case of any Distribution Date up to and
including the Optional Termination Date, the lesser of (x) One-Month LIBOR plus
0.30% per annum and (y) the related Net Rate Cap and (B) in the case of any
Distribution Date after the Optional Termination Date, the lesser of (x)
One-Month LIBOR plus 0.60% per annum and (y) the related Net Rate Cap for the
purpose of this calculation; with the rate on REMIC I Regular Interest LT-M1
subject to a cap equal to (A) in the case of any Distribution Date up to and
including the Optional Termination Date, the lesser of (x) One-Month
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LIBOR plus 1.10% per annum and (y) the Net Rate Cap and (B) in the case of any
Distribution Date after the Optional Termination Date, the lesser of (x)
One-Month LIBOR plus 1.65% per annum and (y) the related Net Rate Cap for the
purpose of this calculation; and with the rate on REMIC I Regular Interest LT-ZZ
subject to a cap of zero for the purpose of this calculation; provided, however,
that for this purpose, calculations of the Uncertificated REMIC I Pass-Through
Rates and the related caps with respect to the REMIC I Regular Interests shall
be multiplied by a fraction, the numerator of which is the actual number of days
in the Interest Accrual Period and the denominator of which is 30.
MASTER SERVICER: As of the Closing Date, ▇▇▇▇▇ Fargo Bank Minnesota,
National Association and, thereafter, its respective successors in interest who
meet the qualifications of the Servicing Agreements and this Agreement.
MASTER SERVICER CERTIFICATION: A written certification covering servicing
of the Mortgage Loans by all Servicers and signed by an officer of the Master
Servicer that complies with (i) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended from
time to time, and (ii) the February 21, 2003 Statement by the Staff of the
Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superceded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer and the Seller following a negotiation in good faith to
determine how to comply with any such new requirements.
MASTER SERVICER COLLECTION ACCOUNT: The trust account or accounts created
and maintained pursuant to Section 4.02, which shall be denominated "JPMorgan
Chase Bank, as Trustee f/b/o holders of Structured Asset Mortgage Investments
Inc., Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates, Series
2003-1 - Master Servicer Collection Account,"and which shall be an Eligible
Account.
MASTER SERVICING COMPENSATION: The meaning specified in Section 3.14.
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.
MAXIMUM UNCERTIFICATED ACCRUED INTEREST DEFERRAL AMOUNT: With respect to
any Distribution Date, the excess of (a) accrued interest at the Uncertificated
REMIC I Pass-Through Rate applicable to REMIC I Regular Interest LT-ZZ for such
Distribution Date on a balance equal to the excess of (i) the Uncertificated
Principal Balance of REMIC I Regular Interest LT-ZZ over (ii) the REMIC I
Overcollateralized Amount for such Distribution Date, over (b) (1)
Uncertificated Accrued Interest on REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, with the rate
on REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇ subject to
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a cap equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) One-Month LIBOR plus 0.38% per
annum and (y) the related Net Rate Cap and (B) in the case of any Distribution
Date after the Optional Termination Date, the lesser of (x) One-Month LIBOR plus
0.76% per annum and (y) the related Net Rate Cap for the purpose of this
calculation, (2) Uncertificated Accrued Interest on REMIC I Regular ▇▇▇▇▇▇▇▇
▇▇-▇▇, with the rate on REMIC I Regular Interest LT-M1 subject to a cap equal to
(A) in the case of any Distribution Date up to and including the Optional
Termination Date, the lesser of (x) One-Month LIBOR plus 0.30% per annum and (y)
the related Net Rate Cap and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) One-Month LIBOR plus 0.60% per
annum and (y) the related Net Rate Cap for the purpose of this calculation, and
(3) Uncertificated Accrued Interest on REMIC I Regular Interest LT-M1, with the
rate on REMIC I Regular Interest LT-M1 subject to a cap equal to (A) in the case
of any Distribution Date up to and including the Optional Termination Date, the
lesser of (x) One-Month LIBOR plus 1.10% per annum and (y) the Net Rate Cap and
(B) in the case of any Distribution Date after the Optional Termination Date,
the lesser of (x) One-Month LIBOR plus 1.65% per annum and (y) the related Net
Rate Cap for the purpose of this calculation; provided, however, that for this
purpose, calculations of the Uncertificated REMIC I Pass-Through Rate and the
related caps with respect to REMIC I Regular Interest ▇▇-▇▇, ▇▇-▇▇ and LT-M1
shall be multiplied by a fraction, the numerator of which is the actual number
of days in the Interest Accrual Period and the denominator of which is 30.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with
MERS on the MERS(R) System.
MINIMUM LIFETIME MORTGAGE RATE: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MOM LOAN: With respect to any Mortgage Loan, MERS acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.
MONTHLY ADVANCE: An advance of principal or interest required to be made by
the applicable Servicer pursuant to the related Servicing Agreement or the
Master Servicer pursuant to Section 6.05.
MOODY'S: ▇▇▇▇▇'▇ 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.
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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 (which shall include, without
limitation, (i) with respect to each Cooperative Loan, the related Mortgage
Note, Security Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate, Cooperative Lease and Mortgage File and all rights appertaining
thereto, and (ii) with respect to each Mortgage Loan other than a Cooperative
Loan, each related Mortgage Note, Mortgage and Mortgage File and all rights
appertaining thereto), 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 April 30, 2003, between EMC, as seller, and Structured Asset
Mortgage Investments Inc., as purchaser, and all amendments thereof and
supplements thereto, attached as Exhibit J.
MORTGAGE LOAN SCHEDULE: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and divided into Loan Groups 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, or, in the case of a Cooperative Loan, the related Cooperative
Lease and Cooperative Stock.
MORTGAGOR: The obligor on a Mortgage Note.
NET INTEREST SHORTFALL: With respect to any Distribution Date, the Interest
Shortfall, if any, for such Distribution Date net of Compensating Interest
Payments made with respect to such Distribution Date.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan, Liquidation
Proceeds net of (i) Liquidation Expenses which are payable therefrom by the
Master Servicer or the Servicer in accordance with the related Servicing
Agreement or this Agreement and (ii) unreimbursed advances by the Master
Servicer or 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 (expressed as a per annum
rate).
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NET RATE CAP: For any Distribution Date and the Class I-A Certificates and
Class II-A Certificates, the weighted average of the Net Rates on the Mortgage
Loans in the related Loan Group, weighted on the basis of the Stated Principal
Balances thereof as of the beginning of the related Due Period, times a fraction
equal to (x) the aggregate Stated Principal Balance of the Mortgage Loans in
such Loan Group, over (y) the aggregate Certificate Principal Balance of such
Classes of Certificates, and as adjusted to an effective rate reflecting the
accrual of interest on an actual/360 basis. For any Distribution Date and the
Class M Certificates, the weighted average of the Net Rates on the Mortgage
Loans in each Loan Group, weighted in proportion to the results of subtracting
from the aggregate Stated Principal Balance of each Loan Group, the Certificate
Principal Balance of the related Class of Senior Certificates, and as adjusted
to an effective rate reflecting the accrual of interest on an actual/360 basis.
For federal income tax purposes, the Net Rate Cap is equal to (i) the weighted
average of the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular
Interest LT-1GRP, weighted on the basis of such REMIC I Regular Interest's
Uncertificated Principal Balance, with respect to the Class I-A Certificates,
(ii) the weighted average of the Uncertificated REMIC I Pass-Through Rate on
REMIC I Regular Interest LT-2GRP, weighted on the basis of such REMIC I Regular
Interest's Uncertificated Principal Balance, with respect to the Class II-A
Certificates and (iii) the weighted average of (a) the Uncertificated REMIC I
Pass- Through Rate on REMIC I Regular Interest LT-1SUB, subject to a cap and a
floor equal to the Group 1 Net WAC Rate and (b) the Uncertificated REMIC I
Pass-Through Rate on REMIC I Regular Interest LT-2SUB, subject to a cap and a
floor equal to the Group 2 Net WAC Rate, weighted on the basis of the
Uncertificated Principal Balance of such REMIC I Regular Interests, with respect
to the Class M Certificates.
NONRECOVERABLE ADVANCE: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer, the Trustee
(as successor Master Servicer) or the applicable Servicer and (ii) which, in the
good faith judgment of the Master Servicer, the Trustee or the applicable
Servicer, will not or, in the case of a proposed advance or Monthly Advance,
would not, be ultimately recoverable by the Master Servicer, the Trustee (as
successor Master Servicer) or the applicable Servicer from Liquidation Proceeds,
Insurance Proceeds or future payments on the Mortgage Loan for which such
advance or Monthly Advance was made.
NOTIONAL AMOUNT: The Notional Amount of the Class B-IO Certificates
immediately prior to any Distribution Date is equal to the aggregate of the
Uncertificated Principal Balances of the REMIC I Regular Interests.
OFFERED CERTIFICATE: Any Class I-A, Class II-A or Class M Certificate.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a Vice President or Assistant
Vice President or other authorized officer of the Master Servicer or the Seller,
as applicable, and delivered to the Trustee, as required by this Agreement.
ONE-MONTH LIBOR: With respect to any Interest Accrual Period, the rate
determined by the Securities Administrator on the related LIBOR Determination
Date on the basis of the rate for U.S. dollar deposits for one month that
appears on Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such
LIBOR Determination Date; provided that the parties hereto acknowledge that One-
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Month LIBOR for the first Interest Accrual Period shall equal 1.32% per annum.
If such rate does not appear on such page (or such other page as may replace
that page on that service, or if such service is no longer offered, such other
service for displaying One-Month LIBOR or comparable rates as may be reasonably
selected by the Securities Administrator), One-Month LIBOR for the applicable
Interest Accrual Period will be the Reference Bank Rate. If no such quotations
can be obtained by the Securities Administrator and no Reference Bank Rate is
available, One-Month LIBOR will be One-Month LIBOR applicable to the preceding
Interest Accrual Period.
OPINION OF COUNSEL: A written opinion of counsel who is or are acceptable
to the Trustee and who, unless required to be Independent (an "Opinion of
Independent Counsel"), may be internal counsel for EMC, the Master Servicer or
the Seller.
OPTIONAL TERMINATION DATE: The Distribution Date on which the aggregate
Stated Principal Balance of all of the Mortgage Loans is equal to or less than
20% of the aggregate Stated Principal Balance of all of the Mortgage Loans as of
the Cut-off Date.
ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the aggregate
Certificate Principal Balances of each Class of 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.
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.
OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans as of the last day of the related Due Period over (b) the Certificate
Principal Balances of the Offered Certificates on such Distribution Date (after
taking into account the payment of principal other than any Extra Principal
Distribution Amount on such Certificates).
OVERCOLLATERALIZATION TARGET AMOUNT: $3,160,951.
PASS-THROUGH RATE: As to each Class of Certificates and the REMIC I Regular
Interests, the rate of interest determined as provided with respect thereto in
Section 5.01(d). Any monthly
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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 Master Servicer or its Affiliates
acting in its commercial banking capacity) and subject to supervision and
examination by federal and/or state banking authorities, provided that the
commercial paper and/or the short-term debt rating and/or the long-term
unsecured debt obligations of such depository institution or trust company
at the time of such investment or contractual commitment providing for such
investment have the Applicable Credit Rating or better from each Rating
Agency and (b) any other demand or time deposit or certificate of deposit
that is fully insured by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an agency or instrumentality of the United States of America,
the obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in clause
(ii)(a) above where the Trustee holds the security therefor;
(iv) securities bearing interest or sold at a discount issued by any
corporation (including the Trustee or the Master Servicer or its
Affiliates) incorporated under the laws of the United States of America or
any state thereof that have the Applicable Credit Rating or better from
each Rating Agency at the time of such investment or contractual commitment
providing for such investment; provided, however, that securities issued by
any particular corporation will not be Permitted Investments to the extent
that investments therein will cause the then outstanding principal amount
of securities issued by such corporation and held as part of the Trust to
exceed 10% of the aggregate Outstanding Principal Balances of all the
Mortgage Loans and Permitted Investments held as part of the Trust;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one
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year after the date of issuance thereof) having the Applicable Credit
Rating or better from each Rating Agency at the time of such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance company or
other corporation or entity;
(vii) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency as
evidenced in writing by each Rating Agency to the Trustee; and
(viii) any money market or common trust fund having the Applicable
Credit Rating or better from each Rating Agency, including any such fund
for which the Trustee or the Master Servicer or any affiliate of the
Trustee or the Master Servicer acts as a manager or an advisor;
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
instrument or security is purchased at a price greater than par.
PERMITTED TRANSFEREE: Any Person other than a Disqualified Organization or
an "electing large partnership" (as defined by Section 775 of the Code).
PERSON: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
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 CHARGE LOAN: Any Mortgage Loan for which a Prepayment Charge may
be assessed and to which such Prepayment Charge the Class XP Certificates are
entitled, as indicated on the Mortgage Loan Schedule.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the
related Prepayment Period, (other than a Principal Prepayment in full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 3.21 or
10.01 hereof), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan immediately prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment (or liquidation
proceeds) exceeds (ii) the amount of interest paid or collected in connection
with such
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Principal Prepayment or such liquidation proceeds less the sum of (a) any
Prepayment Charges and (b) the related Servicing Fee.
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 DISTRIBUTION AMOUNT: With respect to each Distribution Date, an
amount equal to (x) the Principal Funds for such Distribution Date plus (y) any
Extra Principal Distribution Amount for such Distribution Date minus (z) any
Excess Overcollateralization Amount for such Distribution Date.
PRINCIPAL FUNDS: With respect to any Distribution Date and each Loan Group,
(i) the sum, without duplication, of (a) all scheduled principal collected on
the Mortgage Loans in the related Loan Group during the related Due Period, (b)
all Advances relating to principal made on the Mortgage Loans in the related
Loan Group on or before the Distribution Account Deposit Date, (c) Principal
Prepayments on the Mortgage Loans in the related Loan Group, exclusive of
prepayment charges or penalties, collected during the related Prepayment Period,
(d) the Stated Principal Balance of each related Mortgage Loan that was
purchased by the Mortgage Loan Seller pursuant to Section 2.02, 2.03 or 3.21,
(e) the aggregate of all Substitution Adjustment Amounts for the related
Determination Date in connection with the substitution of Mortgage Loans in the
related Loan Group pursuant to Section 2.03(c), (f) amounts in respect of
principal paid by EMC pursuant to Section 10.01 and (g) all Liquidation Proceeds
collected during the related Prepayment Period (to the extent such Liquidation
Proceeds relate to principal) on the Mortgage Loans in the related Loan Group,
in each case to the extent remitted by EMC or the related Servicer to the
Distribution Account pursuant to this Agreement or the related Servicing
Agreement minus (ii) all amounts required to be reimbursed pursuant to Sections
4.01, 4.03 and 4.05 or as otherwise set forth in this Agreement.
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 Repurchase Proceeds, but excluding the principal portion of Net
Liquidation Proceeds.
PRIVATE CERTIFICATE: Any Class XP Certificate, Class B-IO Certificate or
Class R Certificate.
PROTECTED ACCOUNT: An account established and maintained for the benefit of
Certificateholders by each Servicer with respect to the related Mortgage Loans
and with respect to REO Property pursuant to the respective Servicing
Agreements.
QIB: A Qualified Institutional Buyer as defined in Rule 144A promulgated
under the Securities Act.
QUALIFIED INSURER: Any insurance company duly qualified as such under the
laws of the state or states in which the related Mortgaged Property or Mortgaged
Properties is or are located, duly authorized and licensed in such state or
states to transact the type of insurance business in which it is engaged and
approved as an insurer by the Master Servicer, so long as the claims paying
ability
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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 Moody's.
REALIZED LOSS: Any (i) Bankruptcy Loss or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation, less (y) the related Net
Liquidation Proceeds with respect to such Mortgage Loan and the related
Mortgaged Property.
RECORD DATE: For each Class of Certificates, the Business Day preceding the
applicable Distribution Date so long as such Class of Certificates remains in
book-entry form; and otherwise, 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, or similar state laws.
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.
REMAINING EXCESS SPREAD: With respect to any Distribution Date, the Excess
Spread less any Extra Principal Distribution Amount, for such Distribution Date.
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 Master Servicer Collection
Account, (iii) any REO Property relating to the Mortgage Loans, (iv) the rights
with respect to any related Servicing Agreement, (v) the rights with respect to
any related Assignment Agreement and (vi) any proceeds of the foregoing.
REMIC I INTERESTS: The REMIC I Regular Interests and the Class R-I
Certificates.
REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any Distribution
Date, an amount equal to (a) the product of (i) the aggregate Stated Principal
Balance of the Mortgage Loans and related REO Properties then outstanding and
(ii) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest
LT-AA minus the Marker Rate, divided by (b) 12.
REMIC I MARKER ALLOCATION PERCENTAGE: 50% of any amount payable or loss
attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest LT-AA, REMIC
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I Regular Interest LT-A1, REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular
Interest LT-M1, REMIC I Regular Interest LT-ZZ and REMIC I Regular Interest
LT-XP.
REMIC I OVERCOLLATERALIZED AMOUNT: With respect to any date of
determination, (i) 1% of the aggregate of the Uncertificated Principal Balances
of REMIC I Regular Interest LT-AA, REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I
Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular Interest LT-M1 and REMIC I Regular
Interest LT-ZZ, minus (ii) the aggregate of the Uncertificated Principal
Balances of REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular Interest LT-A2 and
REMIC I Regular Interest LT-M1, in each case as of such date of determination.
REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any Distribution
Date and the Mortgage Loans, an amount equal to (a) the product of (i) the
aggregate Stated Principal Balance of the Mortgage Loans and related REO
Properties then outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the aggregate of the Uncertificated Principal Balances of REMIC I
Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular Interest
LT-M1, and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular ▇▇▇▇▇▇▇▇
▇▇-▇▇, REMIC I Regular Interest LT-M1 and REMIC I Regular Interest LT-ZZ.
REMIC I OVERCOLLATERALIZATION TARGET AMOUNT: 1% of the
Overcollateralization Target Amount.
REMIC I REGULAR INTEREST LT-AA: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Regular Interest LT-AA shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LT-A1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇ shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LT-A2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇ shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LT-M1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Regular Interest LT-M1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through
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Rate in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I REGULAR INTEREST LT-ZZ: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Regular Interest LT-ZZ shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LT-XP: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Regular Interest LT-XP shall be entitled
to any Prepayment Charges collected by the Master Servicer and to a distribution
of principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in Section
5.01.
REMIC I REGULAR INTEREST LT-1SUB: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Regular Interest LT-1SUB shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LT-1GRP: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Regular Interest LT-1GRP shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LT-2SUB: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Regular Interest LT-2SUB shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LT-2GRP: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Regular Interest LT-1SUB shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
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REMIC I REGULAR INTEREST LT-XX: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Regular Interest LT-XX shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTERESTS: REMIC I Regular Interest LT-AA, REMIC I Regular
▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular Interest LT-M1,
REMIC I Regular Interest LT-ZZ, REMIC I Regular Interest LT-XP, REMIC I Regular
Interest LT-1SUB, REMIC I Regular Interest LT-1GRP, REMIC I Regular Interest
LT-2SUB, REMIC I Regular Interest LT- 2GRP and REMIC I Regular Interest LT-XX.
REMIC I SUB WAC ALLOCATION PERCENTAGE: 50% of any amount payable or loss
attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest LT-1SUB, REMIC I Regular Interest LT-1GRP, REMIC I Regular
Interest LT-2SUB, REMIC I Regular Interest LT2-GRP and REMIC I Regular Interest
LT-XX.
REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each REMIC I Regular Interest ending with the designation
"SUB,", equal to the ratio among, with respect to each such REMIC I Regular
Interest, the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the Certificate Principal
Balance of the Class A Certificates in the related Loan Group and Class XP
Certificates.
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).
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.
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REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Mortgage Loan
Seller pursuant to the Mortgage Loan Purchase Agreement or Article II of this
Agreement, an amount equal to the sum of (i) 100% of the Outstanding Principal
Balance of such Mortgage Loan as of the date of repurchase (or if the related
Mortgaged Property was acquired with respect thereto, 100% of the Outstanding
Principal Balance at the date of the acquisition), plus (ii) accrued but unpaid
interest on the Outstanding Principal Balance at the related Mortgage Interest
Rate, through and including the last day of the month of repurchase, and reduced
by (iii) any portion of the Master Servicing Compensation, Monthly Advances and
advances payable to the purchaser of the Mortgage Loan and (iv) any costs and
damages (if any) incurred by the Trust in connection with any violation of such
Mortgage Loan of any predatory or abusive lending laws.
REPURCHASE PROCEEDS: the Repurchase Price in connection with any repurchase
of a Mortgage Loan by the Mortgage Loan Seller and any cash deposit in
connection with the substitution of a Mortgage Loan.
REQUEST FOR RELEASE: A request for release in the form attached hereto as
Exhibit D.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under this Agreement
with respect to such Mortgage Loan.
RESERVE FUND: Shall mean the separate trust account created and maintained
by the Trustee pursuant to Section 4.06 hereof.
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.
ROLLING THREE-MONTH DELINQUENCY AVERAGE: With respect to a Distribution
Date, is equal to the average, over the past three months of (x) the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date that
are 61 or more days Delinquent as of the close of business on the last day of
the calendar month preceding such Distribution Date (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), over (y) the
aggregate Stated Principal Balance of Mortgage Loans as of the close of business
on the last day of the calendar month preceding such Distribution Date.
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
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under Rule 144A promulgated under the Securities Act, substantially in the form
set forth as Exhibit F-2 hereto.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ 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.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES ADMINISTRATOR: ▇▇▇▇▇ Fargo Bank Minnesota, National Association,
or its successor in interest, or any successor securities administrator
appointed as herein provided.
SECURITIES LEGEND: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO
(A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN
THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY
OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR
INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, AND/OR SECTION 4975
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OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED [in the case of the Class XP
Certificates and Class B-IO 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 ("PTCE") 84-14,
▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ 95-60 OR PTCE 96-23 AND (II) WILL NOT GIVE RISE TO
ANY ADDITIONAL FIDUCIARY DUTIES ON THE PART OF THE SELLER, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, 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 OR UNLESS THE TRANSFEREE
PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL FOR THE BENEFIT OF THE TRUSTEE,
MASTER SERVICER AND THE SECURITIES ADMINISTRATOR AND WHICH THEY MAY RELY WHICH
IS SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE IS
PERMISSIBLE UNDER LOCAL LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL
NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
SECURITY AGREEMENT: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
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 Certificates.
SERVICER: With respect to each Mortgage Loans, ABN AMRO, Alliance, Bank of
America, Cendant, Commercial Federal, Countrywide, EMC, GMAC, IndyMac Bank,
SunTrust, U.S. Bank, Washington Mutual or ▇▇▇▇▇ Fargo, or any successor thereto.
SERVICER REMITTANCE DATE: With respect to each Mortgage Loan, the date set
forth in the related Servicing Agreement.
SERVICING AGREEMENTS: The ABN AMRO Servicing Agreement, Alliance Servicing
Agreement, Bank of America Servicing Agreements, Cendant Servicing Agreements,
Commercial Federal Servicing Agreement, Countrywide Servicing Agreements, EMC
Servicing Agreement,
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IndyMac Bank Servicing Agreement, GMAC Servicing Agreement, SunTrust Servicing
Agreement, U.S. Bank Servicing Agreement, Washington Mutual Servicing Agreement
and ▇▇▇▇▇ Fargo Servicing Agreement.
SERVICING FEE: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Stated 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: April 30, 2003.
STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or related REO
Property and any Distribution Date, the Cut-off Date Principal Balance thereof
minus the sum of (i) the principal portion of the Scheduled Payments due with
respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date (and irrespective of any delinquency in their payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan received prior to
or during the related Prepayment Period, and all Liquidation Proceeds to the
extent applied by the Master Servicer or any related Servicer as recoveries of
principal in accordance with this Agreement or the applicable Servicing
Agreement with respect to such Mortgage Loan, that were received by the Master
Servicer or the related Servicer as of the close of business on the last day of
the Prepayment Period related to such Distribution Date and (iii) any Realized
Losses on such Mortgage Loan incurred during the related Prepayment Period. The
Stated Principal Balance of a Liquidated Loan equals zero. References herein to
the Stated Principal Balance of a Loan Group at any time shall mean the
aggregate Stated Principal Balance of all Mortgage Loans in such Loan Group.
STEPDOWN DATE: The earlier to occur of (i) the Distribution Date on which
the aggregate Certificate Principal Balance of the Class A Certificates has been
reduced to zero and (ii) the later to occur of (a) the Distribution Date in May
2006 and (b) the first Distribution Date on which the sum of the Certificate
Principal Balance of the Class M Certificates and the Overcollateralization
Amount divided by the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period is greater than or equal to 6.0%.
SUBORDINATE CERTIFICATES: The Class M Certificates, Class B-IO Certificates
and Residual Certificates.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Trustee pursuant
to the related Servicing Agreement, the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, in each case, (i) which has an
Outstanding Principal Balance not greater nor materially less than the Mortgage
Loan for which it is to be substituted; (ii) which has a Mortgage Interest Rate
and Net Rate not less than, and not materially greater than, such Mortgage Loan;
(iii) which has a maturity date not materially earlier or later than such
Mortgage Loan and not later than the latest maturity date of any Mortgage Loan;
(iv) which is of the same property type and occupancy type as such Mortgage
Loan; (v) which has a Loan-to-Value Ratio not greater than the Loan-to-Value
Ratio of such Mortgage Loan; (vi) which is current in payment of principal and
interest as of the date of
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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.
SUNTRUST: SunTrust Mortgage, Inc.
SUNTRUST SERVICING AGREEMENT: The Purchase, Warranties and Servicing
Agreement, dated as of January 1, 2002, between EMC and SunTrust as attached
hereto as Exhibit H-10.
TAX ADMINISTRATION AND TAX MATTERS PERSON: The Securities Administrator or
any successor thereto or assignee thereof shall serve as tax administrator
hereunder and as agent for the Tax Matters Person. The Holder of each Class of
Residual Certificates shall be the Tax Matters Person for the related REMIC, as
more particularly set forth in Section 9.12 hereof.
TERMINATION PURCHASE PRICE: The price, calculated as set forth in Section
10.01, to be paid in connection with the repurchase of the Mortgage Loans
pursuant to Section 10.01.
TRIGGER EVENT: with respect to a Distribution Date after the Stepdown Date,
exists if the Rolling Three-Month Delinquency Average exceeds 50% of the sum of
the Certificate Principal Balance of the Class M Certificates and the
Overcollateralization Amount, in each case after taking into account the
distribution of the related Principal Distribution Amounts on such Distribution
Date.
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: JPMorgan Chase Bank, or its successor in interest, or any
successor trustee appointed as herein provided.
UNCERTIFICATED ACCRUED INTEREST: With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass-Through Rate on the Uncertificated Principal
Balance of such REMIC Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Prepayment Interest Shortfalls and shortfalls
resulting from application of the Relief Act (allocated to such REMIC Regular
Interests as set forth in Section 5.01).
UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC Regular
Interest, the principal amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC I Regular Interest shall equal the amount set forth in the
Section 5.01 as its initial Uncertificated Principal Balance. On each
Distribution Date, the Uncertificated Principal Balance of each such REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 5.01 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 5.01. The
Uncertificated Principal Balance of each REMIC Regular Interest shall never be
less than zero.
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UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to REMIC I Regular
Interest LT-AA, REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇,
REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-ZZ, REMIC I Regular
Interest LT-XP, REMIC I Regular Interest LT-1SUB, REMIC I Regular Interest
LT-2SUB and REMIC I Regular Interest LT-XX, the weighted average of the Net
Mortgage Rates of the Mortgage Loans. With respect to REMIC I Regular Interest
LT-1GRP, the weighted average of the Net Mortgage Rates of the Group 1 Mortgage
Loans and with respect REMIC I Regular Interest LT-2GRP, the weighted average of
the Net Mortgage Rates of the Group 2 Mortgage Loans.
UNINSURED CAUSE: Any cause of damage to a Mortgaged Property or related REO
Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant the related Servicing Agreement, without
regard to whether or not such policy is maintained.
UNITED STATES PERSON: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class R Certificates, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence.
UNPAID REALIZED LOSS AMOUNT: With respect to the Class M Certificates and
as to any Distribution Date, is the excess of (i) Applied Realized Loss Amounts
with respect to such Class over (ii) the sum of all distributions in reduction
of the Applied Realized Loss Amounts on all previous Distribution Dates.
U.S. BANK: U.S. Bank Home Mortgage, a Division of U.S. Bank, ▇.▇.
▇.▇. BANK SERVICING AGREEMENT: The Subservicing Agreement, dated as of
March 1, 2003, between U.S. Bank and EMC as attached hereto as Exhibit H-11.
WAMU: Washington Mutual Bank, FA.
WAMU SERVICING AGREEMENT: The Servicing Agreement, dated as of April 1,
2001, between WAMU and EMC as attached hereto as Exhibit ▇-▇▇.
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇: ▇▇▇▇▇ Fargo Home Mortgage, Inc.
▇▇▇▇▇ FARGO SERVICING AGREEMENT: The Master Seller's Warranties and
Servicing Agreement, dated as of April 1, 2003, between WFHM and EMC as attached
hereto as Exhibit H-13.
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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 as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Master Servicer Collection Account, (iii) such assets relating to the Mortgage
Loans as from time to time may be held by the Servicers in Protected Accounts,
the Master Servicer in the Master Servicer Collection Account and the Trustee in
the Distribution Account for the benefit of the Trustee on behalf of the
Certificateholders, (iv) any REO Property, (v) the Required Insurance Policies
and any amounts paid or payable by the insurer under any Insurance Policy (to
the extent the mortgagee has a claim thereto), (vi) the Mortgage Loan Purchase
Agreement to the extent provided in Subsection 2.03(a), (vii) the rights with
respect to the Servicing Agreements as assigned to the Trustee on behalf of the
Certificateholders by the Assignment Agreements, (viii) the rights under the Cap
Contracts 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 or the Custodian, as its agent, with respect to (I)
each Mortgage Loan (other than a Cooperative Loan):
(i) the original Mortgage Note, endorsed without recourse to the order
of the Trustee and showing an unbroken chain of endorsements from the original
payee thereof to the Person endorsing it to the Trustee, or lost note affidavit
together with a copy of the related Mortgage Note,
(ii) the original Mortgage and, if the related Mortgage Loan is a MOM
Loan, noting the presence of the MIN and language indicating that such Mortgage
Loan is a MOM Loan, which shall have been recorded (or if the original is not
available, a copy), with evidence of such recording indicated thereon (or if
clause (x) in the proviso below applies, shall be in recordable form),
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy of the
assignment (which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to "JPMorgan Chase
Bank, 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
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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;
and (II) with respect to each Cooperative Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to the order
of the Trustee and showing an unbroken chain of endorsements from the originator
thereof to the Person endorsing it to the Trustee, or lost note affidavit,
together with a copy of the related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan with intervening
assignments showing an unbroken chain of title from such originator to the
Trustee;
(iii) The related Cooperative Stock Certificate, representing the
related Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument) executed in
blank;
(iv) The original recognition agreement by the Cooperative of the
interests of the mortgagee with respect to the related Cooperative Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative Loan as
secured party, each with evidence of recording thereof, evidencing the interest
of the originator under the Security Agreement and the Assignment of Proprietary
Lease;
(vii) Copies of the filed UCC-3 assignments of the security interest
referenced in clause (vi) above showing an unbroken chain of title from the
originator to the Trustee, each with evidence of recording thereof, evidencing
the interest of the originator under the Security Agreement and the Assignment
of Proprietary Lease;
(viii) An executed assignment of the interest of the originator in the
Security Agreement, Assignment of Proprietary Lease and the recognition
agreement referenced in clause (iv) above, showing an unbroken chain of title
from the originator to the Trustee; and
(ix) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Cooperative Loan;
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PROVIDED, HOWEVER, that in lieu of the foregoing, the Seller may deliver the
following documents, under the circumstances set forth below: (x) in lieu of the
original Security Instrument, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording and have
not been returned to the Seller in time to permit their delivery as specified
above, the Seller may deliver a true copy thereof with a certification by the
Seller, on the face of such copy, substantially as follows: "Certified to be a
true and correct copy of the original, which has been transmitted for
recording"; (y) in lieu of the Security Instrument, assignment to the Trustee or
intervening assignments thereof, if the applicable jurisdiction retains the
originals of such documents (as evidenced by a certification from the Seller to
such effect) the Seller may deliver photocopies of such documents containing an
original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (z) the Seller shall not be
required to deliver intervening assignments or Mortgage Note endorsements
between the related underlying seller of the Mortgage Loans and EMC Mortgage
Corporation, between EMC Mortgage Corporation and the Depositor, and between the
Depositor and the Trustee; and provided, further, however, that in the case of
Mortgage Loans which have been prepaid in full after the Cut-off Date and prior
to the Closing Date, the Seller, in lieu of delivering the above documents, may
deliver to the Trustee or the Custodian, as its agent, a certification to such
effect and shall deposit all amounts paid in respect of such Mortgage Loans in
the Master Servicer Collection Account on the Closing Date. The Seller shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) to the Trustee or the Custodian,
as its agent, promptly after they are received. The Seller shall cause, at its
expense, the assignment of the Security Instrument to the Trustee to be recorded
not later than 180 days after the Closing Date, unless such (a) recordation is
not required by the Rating Agencies or an Opinion of Counsel has been provided
to the Trustee (with a copy to the Custodian) which states that recordation of
such Security Instrument is not required to protect the interests of the
Certificateholders in the related Mortgage Loans or (b) MERS is identified on
the Mortgage or on a properly recorded assignment of the Mortgage as the
mortgagee of record solely as nominee for Seller and its successor and assigns;
provided, however, that each assignment shall be submitted for recording by the
Seller in the manner described above, at no expense to the Trust or the Trustee
or the Custodian, as its agent, upon the earliest to occur of : (i) reasonable
direction by the Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 25% of the Trust, (ii) the occurrence of an
Event of Default, (iii) the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Seller and (iv) the occurrence of a servicing
transfer as described in Section 8.02 hereof. Notwithstanding the foregoing, if
the Seller fails to pay the cost of recording the assignments, such expense will
be paid by the Trustee and the Trustee shall be reimbursed for such expenses by
the Trust in accordance with Section 9.05.
(c) The Seller hereby assigns to the Trustee its security interest in and
to any Additional Collateral, its right to receive amounts due or to become due
in respect of any Additional Collateral pursuant to the related Servicing
Agreement.
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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
Custodian, with respect to the Mortgage Loans, shall acknowledge with respect to
each Mortgage Loan by an Initial Certification receipt of the Mortgage File, but
without review of such Mortgage File, except to the extent necessary to confirm
that such Mortgage File contains the related Mortgage Note or lost note
affidavit. No later than 90 days after the Closing Date (or, with respect to any
Substitute Mortgage Loan, within five Business Days after the receipt by the
Trustee or Custodian thereof), the Trustee agrees, for the benefit of the
Certificateholders, to review or cause to be reviewed by the Custodian on its
behalf (under the Custodial Agreement), each Mortgage File delivered to it and
to execute and deliver, or cause to be executed and delivered, to the Seller and
the Trustee an Interim Certification. In conducting such review, the Trustee or
Custodian will ascertain whether all required documents have been executed and
received, and based on the Mortgage Loan Schedule, whether those documents
relate, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans it has received, as identified in
the Mortgage Loan Schedule. In performing any such review, the Trustee or the
Custodian, as its agent, may conclusively rely on the purported due execution
and genuineness of any such document and on the purported genuineness of any
signature thereon. If the Trustee or the Custodian, as its agent, finds any
document constituting part of the Mortgage File not to have been executed or
received, or to be unrelated to the Mortgage Loans identified in Exhibit B or to
appear to be defective on its face, the Trustee or the Custodian, as its agent,
shall promptly notify the Mortgage Loan Seller. In accordance with the Mortgage
Loan Purchase Agreement, the Mortgage Loan Seller shall correct or cure any such
defect within ninety (90) days from the date of notice from the Trustee or the
Custodian, as its agent, of the defect and if the Mortgage Loan Seller fails to
correct or cure the defect within such period, and such defect materially and
adversely affects the interests of the Certificateholders in the related
Mortgage Loan, the Trustee or the Custodian, as its agent, shall enforce the
Mortgage Loan Seller's obligation pursuant to the Mortgage Loan Purchase
Agreement, within 90 days from the Trustee's or the Custodian's notification, to
purchase such Mortgage Loan at the Repurchase Price; provided that, if such
defect would cause the Mortgage Loan to be other than a "qualified mortgage" as
defined in Section 860G(a)(3) of the Code, any such cure or repurchase must
occur within 90 days from the date such breach was discovered; provided,
however, that if such defect relates solely to the inability of the Mortgage
Loan Seller to deliver the original Security Instrument or intervening
assignments thereof, or a certified copy because the originals of such
documents, or a certified copy have not been returned by the applicable
jurisdiction, the Mortgage Loan Seller shall not be required to purchase such
Mortgage Loan if the Mortgage Loan Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 360 days after
the Closing Date. The foregoing repurchase obligation shall not apply in the
event that the Mortgage Loan Seller cannot deliver such original or copy of any
document submitted for recording to the appropriate recording office in the
applicable jurisdiction because such document has not been returned by such
office; provided that the Mortgage Loan Seller shall instead deliver a recording
receipt of such recording office or, if such receipt is not available, a
certificate confirming that such documents have been accepted for recording, and
delivery to the Trustee or the
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Custodian, as its agent, shall be effected by the Mortgage Loan Seller within
thirty days of its receipt of the original recorded document.
(b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Seller and the Trustee a Final Certification. In
conducting such review, the Trustee or the Custodian, as its agent, will
ascertain whether an original of each document required to be recorded has been
returned from the recording office with evidence of recording thereon or a
certified copy has been obtained from the recording office. If the Trustee or
the Custodian, as its agent, finds any document constituting part of the
Mortgage File has not been received, or to be unrelated, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans identified in Exhibit B or to appear defective on its face (a
"Material Defect"), the Trustee or the Custodian, as its agent, shall promptly
notify the Mortgage Loan Seller (provided, however, that with respect to those
documents described in subsections (I)(b)(iv), (v) and (vii) of Section 2.01 and
subsection (II)(ix) 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 within 90 days from the date of notice from the
Trustee or the Custodian, as its agent, of the Material 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
provide a Substitute Mortgage Loan (if within two years of the Closing Date) or
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, repurchase or
substitution 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.
(c) In the event that a Mortgage Loan is purchased by the Mortgage Loan
Seller in accordance with Subsections 2.02(a) or (b) above, the Mortgage Loan
Seller shall remit to the Master Servicer the Repurchase Price for deposit in
the Master Servicer Collection Account and the Mortgage Loan Seller shall
provide to the Trustee written notification detailing the components of the
Repurchase Price. Upon deposit of the Repurchase Price in the Master Servicer
Collection Account, the Seller shall notify the Trustee and the Trustee or the
Custodian, as its agent (upon receipt of a Request for Release in the form of
Exhibit D attached hereto with respect to such Mortgage Loan), shall release to
the Mortgage Loan Seller the related Mortgage File and the Trustee shall execute
and deliver all instruments of transfer or assignment, without recourse,
representation or warranty, 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 the
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Seller in a form agreed to between the Seller and the Trustee, to reflect such
repurchase and shall promptly notify the Rating Agencies and the Master Servicer
of such amendment. The obligation of the Mortgage Loan Seller to repurchase any
Mortgage Loan as to which such a defect in a constituent document exists shall
be the sole remedy respecting such defect available to the Certificateholders or
to the Trustee on their behalf.
Section 2.03 ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE
AGREEMENT. (a) The Seller hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to Seller's rights and obligations
pursuant to the Servicing Agreements (noting that the Mortgage Loan Seller has
retained the right in the event of breach of the representations, warranties and
covenants, if any, with respect to the related Mortgage Loans of the related
Servicer under the related Servicing Agreement to enforce the provisions thereof
and to seek all or any available remedies). The obligations of the Mortgage Loan
Seller to substitute or repurchase, as applicable, a Mortgage Loan shall be the
Trustee's and the Certificateholders' sole remedy for any breach thereof. At the
request of the Trustee, the Seller shall take such actions as may be necessary
to enforce the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.
(b) If the Seller, the Master Servicer or the Trustee discovers a breach of
any of the representations and warranties set forth in the Mortgage Loan
Purchase Agreement, which breach materially and adversely affects the value of
the interests of Certificateholders or the Trustee in the related Mortgage Loan,
the party discovering the breach shall give prompt written notice of the breach
to the other parties. The Mortgage Loan Seller, within 90 days of its discovery
or receipt of notice that such breach has occurred (whichever occurs earlier),
shall cure the breach in all material respects or, subject to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, shall
purchase the Mortgage Loan or any property acquired with respect thereto from
the Trustee; provided, however, that if there is a breach of any representation
set forth in the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, and the Mortgage Loan or the related property acquired
with respect thereto has been sold, then the Mortgage Loan Seller shall pay, in
lieu of the Repurchase Price, any excess of the Repurchase Price over the Net
Liquidation Proceeds received upon such sale. (If the Net Liquidation Proceeds
exceed the Repurchase Price, any excess shall be paid to the Mortgage Loan
Seller to the extent not required by law to be paid to the borrower.) Any such
purchase by the Mortgage Loan Seller shall be made by providing an amount equal
to the Repurchase Price to the Master Servicer for deposit in the Master
Servicer Collection Account and written notification detailing the components of
such Repurchase Price. The Seller shall notify the Trustee and submit to the
Trustee or the Custodian, as its agent, a Request for Release, and the Trustee
shall release, or the Trustee shall cause the Custodian to release, to the
Mortgage Loan Seller the related Mortgage File and the Trustee shall execute and
deliver all instruments of transfer or assignment furnished to it by the
Mortgage Loan Seller, without recourse, representation or warranty as are
necessary to vest in the Mortgage Loan Seller title to and rights under the
Mortgage Loan or any property acquired with respect thereto. Such purchase shall
be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Securities Administrator shall
amend the Mortgage Loan Schedule to reflect such repurchase and shall promptly
notify the Trustee and the Rating Agencies of such amendment. Enforcement of the
obligation of the Mortgage Loan Seller to purchase (or
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substitute a Substitute Mortgage Loan for) any Mortgage Loan or any property
acquired with respect thereto (or pay the Repurchase Price as set forth in the
above proviso) as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.
Section 2.04 SUBSTITUTION OF MORTGAGE LOANS. Notwithstanding anything to
the contrary in this Agreement, in lieu of purchasing a Mortgage Loan pursuant
to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of this
Agreement, the Mortgage Loan Seller may, no later than the date by which such
purchase by the Mortgage Loan Seller would otherwise be required, tender to the
Trustee a Substitute Mortgage Loan accompanied by a certificate of an authorized
officer of the Mortgage Loan Seller that such Substitute Mortgage Loan conforms
to the requirements set forth in the definition of "Substitute Mortgage Loan" in
the Mortgage Loan Purchase Agreement or this Agreement, as applicable; provided,
however, that substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, in lieu of purchase shall not be
permitted after the termination of the two-year period beginning on the Startup
Day; provided, further, that if the breach would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
any such cure or substitution must occur within 90 days from the date the breach
was discovered. The Trustee or the Custodian, as its agent, shall examine the
Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and the Trustee or the Custodian, as its agent, shall notify the
Mortgage Loan Seller, in writing, within five Business Days after receipt,
whether or not the documents relating to the Substitute Mortgage Loan satisfy
the requirements of the fourth sentence of Subsection 2.02(a). Within two
Business Days after such notification, the Mortgage Loan Seller shall provide to
the Trustee for deposit in the Distribution Account the amount, if any, by which
the Outstanding Principal Balance as of the next preceding Due Date of the
Mortgage Loan for which substitution is being made, after giving effect to
Scheduled Principal due on such date, exceeds the Outstanding Principal Balance
as of such date of the Substitute Mortgage Loan, after giving effect to
Scheduled Principal due on such date, which amount shall be treated for the
purposes of this Agreement as if it were the payment by the Mortgage Loan Seller
of the Repurchase Price for the purchase of a Mortgage Loan by the Mortgage Loan
Seller. After such notification to the Mortgage Loan Seller and, if any such
excess exists, upon receipt of such deposit, the Trustee shall accept such
Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage Loan
hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Trust Fund and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Mortgage Loan Seller. The Scheduled
Principal on a Substitute Mortgage Loan due on the Due Date in the month of
substitution shall be the property of the Mortgage Loan Seller and the Scheduled
Principal on the Mortgage Loan for which the substitution is made due on such
Due Date shall be the property of the Trust Fund. Upon acceptance of the
Substitute Mortgage Loan (and delivery to the Trustee or Custodian of a Request
for Release for such Mortgage Loan), the Trustee shall release to the Mortgage
Loan Seller the related Mortgage File related to any Mortgage Loan released
pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, and shall execute and deliver all instruments of
transfer or assignment, without recourse, representation or warranty in form as
provided to it as are necessary to vest in the Mortgage Loan Seller title to and
rights under any Mortgage Loan released pursuant to the Mortgage Loan Purchase
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Agreement or Section 2.04 of this Agreement, as applicable. The Mortgage Loan
Seller shall deliver the documents related to the Substitute Mortgage Loan in
accordance with the provisions of the Mortgage Loan Purchase Agreement or
Subsections 2.01(b) and 2.02(b) of this Agreement, as applicable, with the date
of acceptance of the Substitute Mortgage Loan deemed to be the Closing Date for
purposes of the time periods set forth in those Subsections. The representations
and warranties set forth in the Mortgage Loan Purchase Agreement shall be deemed
to have been made by the Mortgage Loan Seller with respect to each Substitute
Mortgage Loan as of the date of acceptance of such Mortgage Loan by the Trustee.
The Master Servicer shall amend the Mortgage Loan Schedule to reflect such
substitution and shall provide a copy of such amended Mortgage Loan Schedule to
the Trustee and the Rating Agencies.
Section 2.05 ISSUANCE OF CERTIFICATES. 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, the Master Servicer and
the Securities Administrator as follows:
(i) the Seller (a) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and (b) is
qualified and in good standing as a foreign corporation to do business in
each jurisdiction where such qualification is necessary, except where the
failure so to qualify would not reasonably be expected to have a material
adverse effect on the Seller's business as presently conducted or on the
Seller's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(ii) the Seller has full corporate power to own its property, to carry
on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(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,
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regulation, judgment, decree or order binding on the Seller or its
properties or the articles of incorporation or by-laws of the Seller,
except those conflicts, breaches or defaults which would not reasonably be
expected to have a material adverse effect on the Seller's ability to enter
into this Agreement and to consummate the transactions contemplated hereby;
(iv) the execution, delivery and performance by the Seller of this
Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have
already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the Seller
and, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid and binding obligation of the Seller
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to the
knowledge of the Seller, threatened against the Seller, before or by any
court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii)
with respect to any other matter which in the judgment of the Seller will
be determined adversely to the Seller and will if determined adversely to
the Seller materially and adversely affect the Seller's ability to enter
into this Agreement or perform its obligations under this Agreement; and
the Seller is not in default with respect to any order of any court,
administrative agency, arbitrator or governmental body so as to materially
and adversely affect the transactions contemplated by this Agreement; and
(vii) immediately prior to the transfer and assignment to the Trustee,
each Mortgage Note and each Mortgage were not subject to an assignment or
pledge, and the Seller had good and marketable title to and was the sole
owner thereof and had full right to transfer and sell such Mortgage Loan to
the Trustee free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest.
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ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 MASTER SERVICER. (a) The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Mortgage Loans in accordance with the terms of the applicable
Servicing Agreement and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with each
Servicer as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by each Servicer and
shall cause each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Servicer under the applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicers to the Protected Account
pursuant to the applicable Servicing Agreements.
Notwithstanding anything in this Agreement to the contrary, with respect to
any Mortgage Loan secured by any Additional Collateral, the Master Servicer
shall have no duty of obligation to supervise, monitor or oversee the activities
of Cendant (or any successor thereto) under any Cendant Servicing Agreement with
respect to any Additional Collateral (unless the Master Servicer shall have
assumed the obligations of Cendant (or any successor thereto) as successor
Servicer under the applicable Cendant Servicing Agreement pursuant to Section
3.03 of this Agreement, in which event, as successor Servicer, it will service
and administer the Additional Collateral in accordance with the provisions of
such Cendant Servicing Agreement.
(b) The Trustee shall furnish the Servicers and the Master Servicer with
any powers of attorney and other documents in form as provided to it necessary
or appropriate to enable the Servicers and the Master Servicer to service and
administer the related Mortgage Loans and REO Property.
(c) 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
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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.
(d) The Trustee shall execute and deliver to the related Servicer and the
Master Servicer any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
Section 3.02 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Seller, the related Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, accept any contribution to any REMIC after the
Startup Day without receipt of a REMIC Opinion.
Section 3.03 MONITORING OF SERVICERS. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Seller the compliance by each
Servicer with its duties under the related Servicing Agreement. In the review of
each Servicer's activities, the Master Servicer may rely upon an officer's
certificate of the Servicer with regard to such Servicer's compliance with the
terms of its Servicing Agreement. In the event that the Master Servicer, in its
judgment, determines that a Servicer should be terminated in accordance with its
Servicing Agreement, or that a notice should be sent pursuant to such Servicing
Agreement with respect to the occurrence of an event that, unless cured, would
constitute grounds for such termination, the Master Servicer shall notify the
Seller and the Trustee thereof and the Master Servicer shall issue such notice
or take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or to
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master
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Servicer shall not be required to prosecute or defend any legal action except to
the extent that the Master Servicer shall have received reasonable indemnity for
its costs and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of the Servicer as a result of an event of default
by such Servicer and (ii) all costs and expenses associated with the complete
transfer of servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor servicer to correct any errors or insufficiencies in
the servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account.
The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.
The Master Servicer shall use its best efforts to cause each Servicer of a
Cooperative Loan to timely file continuation statements with regard to each
financing statement and assignment relating to Cooperative Loans as to which the
related Cooperative Apartment is located outside of the State of New York.
If the Master Servicer acts as Servicer, it will not assume liability for
the representations and warranties of the Servicer, if any, that it replaces.
Section 3.04 FIDELITY BOND. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05 POWER TO ACT; PROCEDURES. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
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responsibilities under Section 3.03, shall not permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause REMIC I or REMIC II to fail to qualify as
a REMIC or result in the imposition of a tax upon the Trust Fund (including but
not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code) unless the Master Servicer has received an Opinion
of Counsel (but not at the expense of the Master Servicer) to the effect that
the contemplated action will not cause REMIC I or REMIC II to fail to qualify as
a REMIC or result in the imposition of a tax upon REMIC I or REMIC II, as the
case may be. The Trustee shall furnish the Master Servicer, upon written request
from a Servicing Officer, with any powers of attorney empowering the Master
Servicer or any Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose upon
or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in
any court action relating to the Mortgage Loans or the Mortgaged Property, in
accordance with the applicable Servicing Agreement and this Agreement, and the
Trustee shall execute and deliver such other documents, as the Master Servicer
may request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
any Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 9.11 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in
the name of the Trustee, be deemed to be the agent of the Trustee.
Section 3.06 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.
Section 3.07 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by any Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution Date,
the Servicer will, if required under the applicable Servicing Agreement,
promptly furnish to the Custodian, on behalf of the Trustee, two copies of a
certification substantially in the form of Exhibit D hereto signed by a
Servicing Officer or in a mutually agreeable electronic format which will, in
lieu of a signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payment that are required to be deposited in the
Protected Account maintained by the applicable Servicer pursuant to Section 4.01
or by the applicable Servicer pursuant to its Servicing Agreement have been or
will be so deposited) and shall request that the Custodian, on behalf of the
Trustee, deliver to the
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applicable Servicer the related Mortgage File. Upon receipt of such
certification and request, the Custodian, on behalf of the Trustee, shall
promptly release the related Mortgage File to the applicable Servicer and the
Trustee and Custodian shall have no further responsibility with regard to such
Mortgage File. Upon any such payment in full, each Servicer is authorized, to
give, as agent for the Trustee, as the mortgagee under the Mortgage that secured
the Mortgage Loan, an instrument of satisfaction (or assignment of mortgage
without recourse) regarding the Mortgaged Property subject to the Mortgage,
which instrument of satisfaction or assignment, as the case may be, shall be
delivered to the Person or Persons entitled thereto against receipt therefor of
such payment, it being understood and agreed that no expenses incurred in
connection with such instrument of satisfaction or assignment, as the case may
be, shall be chargeable to the Protected Account.
From time to time and as appropriate for the servicing or foreclosure of
any Mortgage Loan and in accordance with the applicable Servicing Agreement, the
Trustee shall execute such documents as shall be prepared and furnished to the
Trustee by a Servicer or the Master Servicer (in form reasonably acceptable to
the Trustee) and as are necessary to the prosecution of any such proceedings.
The Custodian, on behalf of the Trustee, shall, upon the request of a Servicer
or the Master Servicer, and delivery to the Custodian, on behalf of the Trustee,
of two copies of a request for release signed by a Servicing Officer
substantially in the form of Exhibit D (or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer), release the related Mortgage File held in its possession or
control to the Servicer or the Master Servicer, as applicable. Such trust
receipt shall obligate the Servicer or the Master Servicer to return the
Mortgage File to the Custodian on behalf of the Trustee, when the need therefor
by the Servicer or the Master Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the Mortgage File shall be
released by the Custodian, on behalf of the Trustee, to the Servicer or the
Master Servicer.
Section 3.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER
TO BE HELD FOR TRUSTEE.
The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall, and (to the
extent provided in the applicable Servicing Agreement) shall cause each Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any time upon reasonable request
and during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of
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such Office and Corporation or examiners of any other federal or state banking
or insurance regulatory authority if so required by applicable regulations of
the Office of Thrift Supervision or other regulatory authority, such access to
be afforded without charge but only upon reasonable request in writing and
during normal business hours at the offices of the Master Servicer designated by
it. In fulfilling such a request the Master Servicer shall not be responsible
for determining the sufficiency of such information.
All Mortgage Files and funds collected or held by, or under the control of,
the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement.
Section 3.09 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.
For each Mortgage Loan, the Master Servicer shall enforce any obligation of
the Servicers under the related Servicing Agreements to maintain or cause to be
maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of the related Servicing
Agreements. It is understood and agreed that such insurance shall be with
insurers meeting the eligibility requirements set forth in the applicable
Servicing Agreement and that no earthquake or other additional insurance is to
be required of any Mortgagor or to be maintained on property acquired in respect
of a defaulted loan, other than pursuant to such applicable laws and regulations
as shall at any time be in force and as shall require such additional insurance.
Pursuant to Section 4.01 and 4.02, any amounts collected by the Servicers
or the Master Servicer, or by any Servicer, under any insurance policies (other
than amounts to be applied to the restoration or repair of the property subject
to the related Mortgage or released to the Mortgagor in accordance with the
applicable Servicing Agreement) shall be deposited into the Master Servicer
Collection Account, subject to withdrawal pursuant to Section 4.02 and 4.03. Any
cost incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Section 4.02 and 4.03.
Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The Master
Servicer shall (to the extent provided in the applicable Servicing Agreement)
cause the related Servicer to, prepare and present on behalf of the Trustee and
the Certificateholders all claims under the Insurance Policies and take such
actions (including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer (or disbursed to a Servicer and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Master Servicer Collection Account upon
receipt, except that any amounts realized that are to be applied to the repair
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or restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).
Section 3.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
The Master Servicer shall not take, or permit any Servicer (to the extent
such action is prohibited under the applicable Servicing Agreement) to take, any
action that would result in noncoverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of such Master Servicer
or Servicer, would have been covered thereunder. The Master Servicer shall use
its best reasonable efforts to cause each Servicer (to the extent required under
the related Servicing Agreement) to keep in force and effect (to the extent that
the Mortgage Loan requires the Mortgagor to maintain such insurance), primary
mortgage insurance applicable to each Mortgage Loan in accordance with the
provisions of this Agreement and the related Servicing Agreement, as applicable.
The Master Servicer shall not, and shall not permit any Servicer (to the extent
required under the related Servicing Agreement) to, cancel or refuse to renew
any such Primary Mortgage Insurance Policy that is in effect at the date of the
initial issuance of the Mortgage Note and is required to be kept in force
hereunder except in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable.
The Master Servicer agrees to present, or to cause each Servicer (to the
extent required under the related Servicing Agreement) to present, on behalf of
the Trustee and the Certificateholders, claims to the insurer under any Primary
Mortgage Insurance Policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any Primary Mortgage Insurance
Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.01 and 4.02,
any amounts collected by the Master Servicer or any Servicer under any Primary
Mortgage Insurance Policies shall be deposited in the Master Servicer Collection
Account, subject to withdrawal pursuant to Section 4.03.
Section 3.12 TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES AND
DOCUMENTS.
The Trustee (or the Custodian, as directed by the Trustee), shall retain
possession and custody of the originals (to the extent available) of any Primary
Mortgage Insurance Policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer otherwise
has fulfilled its obligations under this Agreement, the Trustee (or its
Custodian, if any, as directed by the Trustee) shall also retain possession and
custody of each Mortgage File in accordance with and subject to the terms and
conditions of this Agreement. The Master Servicer shall promptly deliver or
cause to be delivered to the Trustee (or the Custodian, as directed by the
Trustee), upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
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Section 3.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS. The Master Servicer
shall cause each Servicer (to the extent required under the related Servicing
Agreement) to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments, all in accordance with the
applicable Servicing Agreement.
Section 3.14 COMPENSATION FOR THE MASTER SERVICER.
The Master Servicer will be entitled to all income and gain realized from
any investment of funds in the Master Servicer Collection Account and the
Distribution Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any prepayment premium or penalty) shall be retained by the applicable Servicer
and shall not be deposited in the Protected Account. The Master Servicer will be
entitled to retain, as additional compensation, any interest remitted by a
Servicer in connection with a Principal Prepayment in full or otherwise in
excess of amounts required to be remitted to the Distribution Account (such
amounts together with the amounts specified in the first sentence of this
Section 3.14, the "Master Servicing Compensation"). The Master Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder and shall not be entitled to reimbursement therefor except as provided
in this Agreement.
Section 3.15 REO PROPERTY.
In the event the Trust Fund acquires ownership of any REO Property in
respect of any related Mortgage Loan, the deed or certificate of sale shall be
issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
The Master Servicer shall, to the extent required by the related Servicing
Agreement, cause the applicable Servicer to deposit all funds collected and
received in connection with the operation of any REO Property in the Protected
Account.
The Master Servicer and the applicable Servicer, upon the final disposition
of any REO Property, shall be entitled to reimbursement for any related
unreimbursed Monthly Advances and other unreimbursed advances as well as any
unpaid Servicing Fees from Liquidation Proceeds received in connection with the
final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
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as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
To the extent provided in the related Servicing Agreement, the Liquidation
Proceeds from the final disposition of the REO Property, net of any payment to
the Master Servicer and the applicable Servicer as provided above shall be
deposited in the Protected Account on or prior to the Determination Date in the
month following receipt thereof and be remitted by wire transfer in immediately
available funds to the Master Servicer for deposit into the related Master
Servicer Collection Account on the next succeeding Servicer Remittance Date.
Section 3.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
The Master Servicer shall deliver to the Trustee and the Rating Agencies on
or before March 1 of each year, commencing on March 1, 2004, an Officer's
Certificate, certifying that with respect to the period ending December 31 of
the prior year: (i) such Servicing Officer has reviewed the activities of such
Master Servicer during the preceding calendar year or portion thereof and its
performance under this Agreement, (ii) to the best of such Servicing Officer's
knowledge, based on such review, such Master Servicer has performed and
fulfilled its duties, responsibilities and obligations under this Agreement in
all material respects throughout such year, or, if there has been a default in
the fulfillment of any such duties, responsibilities or obligations, specifying
each such default known to such Servicing Officer and the nature and status
thereof, (iii) nothing has come to the attention of such Servicing Officer to
lead such Servicing Officer to believe that any Servicer has failed to perform
any of its duties, responsibilities and obligations under its Servicing
Agreement in all material respects throughout such year, or, if there has been a
material default in the performance or fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof.
Copies of such statements shall be provided to any Certificateholder upon
request, by the Master Servicer or by the Trustee at the Master Servicer's
expense if the Master Servicer failed to provide such copies (unless (i) the
Master Servicer shall have failed to provide the Trustee with such statement or
(ii) the Trustee shall be unaware of the Master Servicer's failure to provide
such statement).
Section 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Seller on or
before March 1 of each year, commencing on March 1, 2004 to the effect that,
with respect to the most recently ended fiscal year, such firm has examined
certain records and documents relating to the Master Servicer's performance of
its servicing obligations under this Agreement and pooling and servicing and
trust agreements in material respects similar to this Agreement and to each
other and that, on the basis of such examination conducted substantially in
compliance with the audit program for mortgages serviced for ▇▇▇▇▇▇▇ Mac or the
Uniform Single Attestation Program for Mortgage Bankers, such firm is of the
opinion that the Master Servicer's activities have been conducted in compliance
with this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other
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exceptions as are set forth in such statement and (iii) such exceptions that the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages Serviced by ▇▇▇▇▇▇▇ Mac requires it to report. Copies of such
statements shall be provided to any Certificateholder upon request by the Master
Servicer, or by the Trustee at the expense of the Master Servicer if the Master
Servicer shall fail to provide such copies. If such report discloses exceptions
that are material, the Master Servicer shall advise the Trustee whether such
exceptions have been or are susceptible of cure, and will take prompt action to
do so.
Section 3.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION. Within
15 days after each Distribution Date, the Securities Administrator shall, in
accordance with industry standards, file with the Commission via the Electronic
Data Gathering and Retrieval System ("▇▇▇▇▇"), a Form 8-K with a copy of the
statement to the Trustee who shall make available a copy of the monthly
statement to the Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 30 in each year, the Securities Administrator shall,
in accordance with industry standards and only if instructed by the Seller, file
a Form 15 Suspension Notice with respect to the Trust Fund, if applicable. Prior
to (i) March 15, 2004 and (ii) unless and until a Form 15 Suspension Notice
shall have been filed, prior to March 15 of each year thereafter, the Master
Servicer shall provide the Securities Administrator with a Master Servicer
Certification, together with a copy of the annual independent accountant's
servicing report and annual statement of compliance of each Servicer, in each
case, required to be delivered pursuant to the related Servicing Agreement, and,
if applicable, the annual independent accountant's servicing report and annual
statement of compliance to be delivered by the Master Servicer pursuant to
Sections 3.16 and 3.17. Prior to (i) March 31, 2004, or such earlier filing date
as may be required by the Commission, and (ii) unless and until a Form 15
Suspension Notice shall have been filed, March 31 of each year thereafter, or
such earlier filing date as may be required by the Commission, the Securities
Administrator shall file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust. Such Form 10-K shall include the Master
Servicer Certification and other documentation provided by the Master Servicer
pursuant to the second preceding sentence. The Seller hereby grants to the
Securities Administrator a limited power of attorney to execute and file each
such document on behalf of the Seller. Such power of attorney shall continue
until either the earlier of (i) receipt by the Securities Administrator from the
Seller of written termination of such power of attorney and (ii) the termination
of the Trust Fund. The Seller agrees to promptly furnish to the Securities
Administrator, from time to time upon request, such further information, reports
and financial statements within its control related to this Agreement and the
Mortgage Loans as the Securities Administrator reasonably deems appropriate to
prepare and file all necessary reports with the Commission. The Securities
Administrator shall have no responsibility to file any items other than those
specified in this Section 3.18; provided, however, the Securities Administrator
will cooperate with the Seller in connection with any additional filings with
respect to the Trust Fund as the Seller deems necessary under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Fees and expenses
incurred by the Securities Administrator in connection with this Section 3.18
shall not be reimbursable from the Trust Fund.
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Section 3.19 EMC. On the Closing Date, EMC will receive from the Seller a
payment of $5,000.
Section 3.20 UCC. The Seller shall inform the Trustee in writing of any
Uniform Commercial Code financing statements that were filed on the Closing Date
in connection with the Trust with stamped recorded copies of such financing
statements to be delivered to the Trustee promptly upon receipt by the Seller.
The Trustee agrees to monitor and notify the Seller if any continuation
statements for such Uniform Commercial Code financing statements need to be
filed. If directed by the Seller in writing, the Trustee will file any such
continuation statements solely at the expense of the Seller. The Seller shall
file any financing statements or amendments thereto required by any change in
the Uniform Commercial Code..
Section 3.21 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 Master Servicer a payment for deposit in
the Master Servicer Collection Account covering the amount of the Repurchase
Price for such a Mortgage Loan, and EMC provides to the Trustee a certification
signed by a Servicing Officer stating that the amount of such payment has been
deposited in the Master Servicer Collection Account, then the Trustee shall
execute the assignment of such Mortgage Loan to EMC at the request of EMC
without recourse, representation or warranty and EMC shall succeed to all of the
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. EMC will thereupon own such Mortgage, and all
such security and documents, free of any further obligation to the Trustee or
the Certificateholders with respect thereto.
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ARTICLE IV
Accounts
Section 4.01 PROTECTED ACCOUNTS. (a) The Master Servicer shall enforce the
obligation of each Servicer to establish and maintain a Protected Account in
accordance with the applicable Servicing Agreement, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts
shall be deposited within 48 hours (or as of such other time specified in the
related Servicing Agreement) of receipt all collections of principal and
interest on any Mortgage Loan and with respect to any REO Property received by a
Servicer, including Principal Prepayments, Insurance Proceeds, Liquidation
Proceeds, and advances made from the Servicer's own funds (less servicing
compensation as permitted by the applicable Servicing Agreement in the case of
any Servicer) and all other amounts to be deposited in the Protected Account.
The Servicer is hereby authorized to make withdrawals from and deposits to the
related Protected Account for purposes required or permitted by this Agreement.
To the extent provided in the related Servicing Agreement, the Protected Account
shall be held in a Designated Depository Institution and segregated on the books
of such institution in the name of the Trustee for the benefit of
Certificateholders.
(b) To the extent provided in the related Servicing Agreement, amounts on
deposit in a Protected Account may be invested in Permitted Investments in the
name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds, such
Permitted Investments to mature, or to be subject to redemption or withdrawal,
no later than the date on which such funds are required to be withdrawn for
deposit in the Master Servicer Collection Account, and shall be held until
required for such deposit. The income earned from Permitted Investments made
pursuant to this Section 4.01 shall be paid to the related Servicer under the
applicable Servicing Agreement, and the risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall be
borne by and be the risk of the related Servicer. The related Servicer (to the
extent provided in the Servicing Agreement) shall deposit the amount of any such
loss in the Protected Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.
(c) To the extent provided in the related Servicing Agreement and subject
to this Article IV, on or before each Servicer Remittance Date, the related
Servicer shall withdraw or shall cause to be withdrawn from the Protected
Accounts and shall immediately deposit or cause to be deposited in the Master
Servicer Collection Account amounts representing the following collections and
payments (other than with respect to principal of or interest on the Mortgage
Loans due on or before the Cut-off Date) with respect to each Loan Group:
(i) Scheduled Payments on the Mortgage Loans received or any related
portion thereof advanced by the Servicers pursuant to the Servicing
Agreements which were due on or before the related Due Date, net of the
amount thereof comprising the Servicing Fees;
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(ii) Full Principal Prepayments and any Liquidation Proceeds received
by the Servicers with respect to such Mortgage Loans in the related
Prepayment Period, with interest to the date of prepayment or liquidation,
net of the amount thereof comprising the Servicing Fees;
(iii) Partial Principal Prepayments received by the Servicers for such
Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as an Advance.
(d) Withdrawals may be made from an Account only to make remittances as
provided in Section 4.01(c), 4.02 and 4.03; to reimburse the Master Servicer or
a Servicer for Monthly Advances which have been recovered by subsequent
collection from the related Mortgagor; to remove amounts deposited in error; to
remove fees, charges or other such amounts deposited on a temporary basis; or to
clear and terminate the account at the termination of this Agreement in
accordance with Section 10.01. As provided in Sections 4.01(c) and 4.02(b)
certain amounts otherwise due to the Servicers may be retained by them and need
not be deposited in the Master Servicer Collection Account.
Section 4.02 MASTER SERVICER COLLECTION ACCOUNT. (a) The Master Servicer
shall establish and maintain in the name of the Trustee, for the benefit of the
Certificateholders, the Master Servicer Collection Account as a segregated trust
account or accounts. The Master Servicer Collection Account shall be an Eligible
Account. The Master Servicer will deposit in the Master Servicer Collection
Account as identified by the Master Servicer and as received by the Master
Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds received by
or on behalf of the Master Servicer or which were not deposited in a
Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans purchased
by the Mortgage Loan Seller pursuant to Section 2.02 or 2.03, any amounts
which are to be treated pursuant to Section 2.04 of this Agreement as the
payment of such a Repurchase Price, the Repurchase Price with respect to
any Mortgage Loans purchased by EMC pursuant to Section 3.21, and all
proceeds of any Mortgage Loans or property acquired with respect thereto
repurchased by EMC or its designee pursuant to Section 10.01;
(v) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master Servicer
and required to be deposited in the Master Servicer Collection Account
pursuant to this Agreement.
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All amounts deposited to the Master Servicer Collection Account shall be
held by the Master Servicer in the name of the Trustee in trust for the benefit
of the Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the Master Servicer Collection Account
or the Distribution Account shall be exclusive, it being understood and agreed
that, without limiting the generality of the foregoing, payments in the nature
of (i) prepayment or late payment charges or assumption, tax service, statement
account or payoff, substitution, satisfaction, release and other like fees and
charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii), (iii),
(iv), (vi), (vii), (viii), (ix), (x), (xi) and (xii) with respect to the
Securities Administrator, need not be credited by the Master Servicer or the
related Servicer to the Distribution Account or the Master Servicer Collection
Account, as applicable. In the event that the Master Servicer shall deposit or
cause to be deposited to the Distribution Account any amount not required to be
credited thereto, the Trustee, upon receipt of a written request therefor signed
by a Servicing Officer of the Master Servicer, shall promptly transfer such
amount to the Master Servicer, any provision herein to the contrary
notwithstanding.
The amount at any time credited to the Master Servicer Collection Account
shall be invested, in the name of the Trustee, or its nominee, for the benefit
of the Certificateholders, in Permitted Investments as directed by Master
Servicer. All Permitted Investments shall mature or be subject to redemption or
withdrawal on or before, and shall be held until, the next succeeding
Distribution Account Deposit Date. Any and all investment earnings on amounts on
deposit in the Master Servicer Collection Account from time to time shall be for
the account of the Master Servicer. The Master Servicer from time to time shall
be permitted to withdraw or receive distribution of any and all investment
earnings from the Master Servicer Collection Account. The risk of loss of moneys
required to be distributed to the Certificateholders resulting from such
investments shall be borne by and be the risk of the Master Servicer. The Master
Servicer shall deposit the amount of any such loss in the Master Servicer
Collection Account within two Business Days of receipt of notification of such
loss but not later than the second Business Day prior to the Distribution Date
on which the moneys so invested are required to be distributed to the
Certificateholders.
Section 4.03 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER SERVICER
COLLECTION ACCOUNT. (a) The Master Servicer will, from time to time on demand of
a Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the related Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 10.01 and
remove amounts from time to time deposited in error.
On an ongoing basis, the Master Servicer shall withdraw from the Master
Servicer Collection Account (i) any expenses recoverable by the Trustee, the
Master Servicer or the Securities Administrator or the Custodian pursuant to
Sections 3.03, 7.04 and 9.05 and (ii) any amounts payable to the Master Servicer
as set forth in Section 3.14.
In addition, on or before each Distribution Account Deposit Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.
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No later than 3:00 p.m. New York time on each Distribution Account Deposit
Date, the Master Servicer will transfer all Available Funds on deposit in the
Master Servicer Collection Account with respect to the related Distribution Date
to the Trustee for deposit in the Distribution Account.
Section 4.04 DISTRIBUTION ACCOUNT. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Distribution Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by the
Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the Trust
Fund segregated on the books of the Trustee and held by the Trustee in trust in
its Corporate Trust Office, and the Distribution Account and the funds deposited
therein shall not be subject to, and shall be protected from, all claims, liens,
and encumbrances of any creditors or depositors of the Trustee or the Master
Servicer (whether made directly, or indirectly through a liquidator or receiver
of the Trustee or the Master Servicer). The Distribution Account shall be an
Eligible Account. The amount at any time credited to the Distribution Account
shall be (i) held in cash or fully insured by the FDIC to the maximum coverage
provided thereby or (ii) invested in the name of the Trustee, in such Permitted
Investments selected by the Master Servicer or deposited in demand deposits with
such depository institutions as selected by the Master Servicer, provided that
time deposits of such depository institutions would be a Permitted Investment.
All Permitted Investments shall mature or be subject to redemption or withdrawal
on or before, and shall be held until, the next succeeding Distribution Date if
the obligor for such Permitted Investment is the Trustee or, if such obligor is
any other Person, the Business Day preceding such Distribution Date. All
investment earnings on amounts on deposit in the Distribution Account or benefit
from funds uninvested therein from time to time shall be for the account of the
Master Servicer. The Master Servicer shall be permitted to withdraw or receive
distribution of any and all investment earnings from the Distribution Account on
each Distribution Date. If there is any loss on a Permitted Investment or demand
deposit, the Master Servicer shall remit the amount of the loss to the Trustee
who shall deposit such amount in the Distribution Account. With respect to the
Distribution Account and the funds deposited therein, the Master Servicer shall
take such action as may be necessary to ensure that the Certificateholders shall
be entitled to the priorities afforded to such a trust account (in addition to a
claim against the estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e),
and applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
Section 4.05 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT. (a) The Trustee will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to this Agreement and
the Servicing Agreements or as the Securities Administrator has instructed
hereunder for the following purposes (limited in the case of amounts due the
Master Servicer to those not withdrawn from the Master Servicer Collection
Account in accordance with the terms of this Agreement):
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(i) to reimburse the Master Servicer or any Servicer for any Monthly
Advance of its own funds, the right of the Master Servicer or a Servicer to
reimbursement pursuant to this subclause (i) being limited to amounts
received on a particular Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds)
which represent late payments or recoveries of the principal of or interest
on such Mortgage Loan respecting which such Monthly Advance was made;
(ii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan for
amounts expended by the Master Servicer or such Servicer in good faith in
connection with the restoration of the related Mortgaged Property which was
damaged by an Uninsured Cause or in connection with the liquidation of such
Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master
Servicer or such Servicer from Liquidation Proceeds from a particular
Mortgage Loan for Liquidation Expenses incurred with respect to such
Mortgage Loan; provided that the Master Servicer shall not be entitled to
reimbursement for Liquidation Expenses with respect to a Mortgage Loan to
the extent that (i) any amounts with respect to such Mortgage Loan were
paid as Excess Liquidation Proceeds pursuant to clause (xi) of this
Subsection 4.03 (a) to the Master Servicer; and (ii) such Liquidation
Expenses were not included in the computation of such Excess Liquidation
Proceeds;
(iv) to pay the Master Servicer or any Servicer, as appropriate, from
Liquidation Proceeds or Insurance Proceeds received in connection with the
liquidation of any Mortgage Loan, the amount which it or such Servicer
would have been entitled to receive under subclause (ix) of this Subsection
4.03(a) as servicing compensation on account of each defaulted scheduled
payment on such Mortgage Loan if paid in a timely manner by the related
Mortgagor;
(v) to pay the Master Servicer or any Servicer from the Repurchase
Price for any Mortgage Loan, the amount which it or such Servicer would
have been entitled to receive under subclause (ix) of this Subsection
4.03(a) as servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for advances of
funds (other than Monthly Advances) made with respect to the Mortgage
Loans, and the right to reimbursement pursuant to this subclause being
limited to amounts received on the related Mortgage Loan (including, for
this purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late recoveries of the payments for
which such advances were made;
(vii) to reimburse the Master Servicer or any Servicer for any Monthly
Advance or advance, after a Realized Loss has been allocated with respect
to the related Mortgage
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Loan if the Monthly Advance or advance has not been reimbursed pursuant to
clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 3.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections 3.03,
7.04(c) and (d);
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by
the related Servicer;
(xi) to reimburse or pay any Servicer any such amounts as are due
thereto under the applicable Servicing Agreement and have not been retained
by or paid to the Servicer, to the extent provided in the related Servicing
Agreement;
(xii) to reimburse the Trustee, the Securities Administrator or the
Custodian for expenses, costs and liabilities incurred by or reimbursable
to it pursuant to this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to
Section 10.01.
(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(vi), inclusive, and (viii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section
4.02(b).
(c) On each Distribution Date, the Trustee shall distribute the Interest
Funds and Principal Funds to the extent on deposit in the Distribution Account
for each Loan Group to the Holders of the Certificates in accordance with
distribution instructions provided to it by the Securities Administrator no
later than two Business Days prior to such Distribution Date and determined by
the Securities Administrator in accordance with Section 6.01.
Section 4.06 RESERVE FUND. (a) On or before the Closing Date, the Trustee
shall establish a Reserve Fund on behalf of the Class I-A, Class II-A and Class
M Certificateholders. The Reserve Fund must be an Eligible Account. The Reserve
Fund shall be entitled "Reserve Fund, JPMorgan Chase Bank as Trustee for the
benefit of holders of Structured Asset Mortgage Investments Inc., Bear ▇▇▇▇▇▇▇
ALT-A Trust, Mortgage Pass-Through Certificates, Series 2003-1". The Trustee
shall demand payment of all money payable by Bear ▇▇▇▇▇▇▇ Financial Products
Inc. (the "Counterparty") under the Cap Contracts. The Trustee shall deposit in
the Reserve Fund all payments received from the Counterparty pursuant to the Cap
Contracts. On each Distribution Date, the Trustee shall remit amounts received
from the Counterparty to the Class I-A and Class M Certificateholders in the
manner provided in Section 6.01(b) hereof. In addition, on each Distribution
Date, the Trustee shall transfer from the Distribution Account to the Reserve
Fund to make distributions to the Class I-A,
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Class II-A and Class M Certificates, an amount equal to the amount of any Basis
Risk Shortfall Carry-Forward Amount on such Classes of Certificates in the
manner provided in Section 6.01(a).
(b) The Reserve Fund is an "outside reserve fund" within the meaning of
Treasury Regulation ss.1.860G-2(h) and shall be an asset of the Trust Fund but
not an asset of any REMIC. The Trustee on behalf of the Trust shall be the
nominal owner of the Reserve Fund. The Class B-IO Certificateholder shall be the
beneficial owner of the Reserve Fund, subject to the power of the Trustee to
transfer amounts under Section 6.01(b). Amounts in the Reserve Fund shall, at
the direction of the Class B-IO Certificateholder, be held either uninvested in
a trust or deposit account of the Trustee with no liability for interest or
other compensation thereon or invested in Permitted Investments that mature no
later than the Business Day prior to the next succeeding Distribution Date. The
Trustee shall distribute all net income and gain from such investments in the
Reserve Fund to the Class B-IO Certificateholder, not as a distribution in
respect of any interest in any REMIC, on each Distribution Date. All amounts
earned on amounts on deposit in the Reserve Fund shall be taxable to the Class
B-IO Certificateholder. Any losses on such investments shall be deposited in the
Reserve Fund by the Class B-IO Certificateholder out of its own funds
immediately as realized.
Section 4.07 CLASS XP RESERVE ACCOUNT. (a) The Master Servicer shall
establish and maintain with itself a separate, segregated trust account, which
shall be an Eligible Account, titled "Reserve Account, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as Master Servicer f/b/o Bear ▇▇▇▇▇▇▇ ALT-A
Trust, Mortgage Pass-Through Certificates, Series 2003-1, Class XP". On the
Closing Date, the Depositor shall deposit $100 into the Class XP Reserve
Account. Funds on deposit in the Class XP Reserve Account shall be held in trust
by the Master Servicer for the holder of the Class XP Certificate.
(b) The amount on deposit in the Class XP Reserve Account shall be held
uninvested. On the earlier of (x) the Business Day prior to the Distribution
Date on which all the assets of the Trust Fund are repurchased as described in
Section 10.01(a) and (y) the Business Day prior to the Distribution Date
immediately following the Prepayment Period during which the last Prepayment
Charge on the Mortgage Loans is payable by the related Mortgagor which
Prepayment Period is the month of April 2008, the Master Servicer shall withdraw
the amount on deposit in the Class XP Reserve Account and remit such amount to
the Trustee and provide instruction to the Trustee to pay such amount to the
Class XP Certificate in reduction of the Certificate Principal Balance thereof.
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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 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) [RESERVED].
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(ii) 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 (y) the
Class R-I Certificates, which is hereby designated as the single "residual
interest" in REMIC I. On each Distribution Date, the Trustee shall cause in
the following order of priority, the following amounts to be distributed by
REMIC I to REMIC II on account of the REMIC I Regular Interests or
withdrawn from the Distribution Account and distributed to the holders of
the Class R-I Certificates, as the case may be:
(1) first, from Interest Funds,
(A) to Holders of REMIC I Regular Interest LT-AA, REMIC I Regular
▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular Interest LT-M1,
REMIC I Regular Interest LT-ZZ and REMIC I Regular Interest LT-XP, pro rata, in
an amount equal to (A) the related Uncertificated Accrued Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates. Amounts payable as Uncertificated Accrued Interest
in respect of REMIC I Regular Interest LT-ZZ on a Distribution Date shall be
reduced when the REMIC I Overcollateralized Amount for such Distribution Date is
less than the REMIC I Overcollateralization Target Amount, by the lesser of (x)
the amount of such difference and (y) the Maximum Uncertificated Accrued
Interest Deferral Amount for such Distribution Date, and such amount will be
payable to the Holders of REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular
Interest LT-A2 and REMIC I Regular Interest LT-M1 in the same proportion as the
Extra Principal Distribution Amount is allocated to the Corresponding
Certificates for such Distribution Date;
(B) to Holders of REMIC I Regular Interest LT-1SUB, REMIC I
Regular Interest LT-1GRP, REMIC I Regular Interest LT-2SUB, REMIC I Regular
Interest LT-2GRP and REMIC I Regular Interest LT-XX, pro rata, in an amount
equal to (A) the Uncertificated Accrued Interest for such Distribution Date,
plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates
(2) second, from the REMIC I Marker Allocation Percentage of Principal
Funds to the Holders of REMIC I Regular Interests, allocated as follows:
(A) to the Holders of REMIC I Regular Interest LT-AA, 98.00% of
such Principal Funds, until the Uncertificated Balance of such REMIC I
Regular Interest is reduced to zero;
(B) to the Holders of REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I
Regular Interest LT-A2 and REMIC I Regular Interest LT-M1, 1.00% of
such Principal Funds, in the same proportion as principal payments are
allocated to the Corresponding Certificates, until the Uncertificated
Principal Balances of such REMIC I Regular Interests are reduced to
zero;
(C) to the Holders of REMIC I Regular Interest LT-ZZ, 1.00% of
such Principal Funds, until the Uncertificated Principal Balance of
such REMIC I Regular Interest is reduced to zero; and
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(D) any remaining amount to the Holders of the Class R-I
Certificates;
provided that, REMIC I Regular Interest LT-XP shall not be reduced until
the Distribution Date immediately following the expiration of the latest
Prepayment Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter, at which point such amount shall be withdrawn
from the Class XP Reserve Account and distributed to REMIC I Regular
Interest LT-XP, until $100 has been distributed pursuant to this clause.
(3) third, from the REMIC I Sub WAC Allocation Percentage of Principal
Funds to the Holders of REMIC I Regular Interests, allocated as follows:
Distributions of principal shall be deemed to be made to REMIC I
Regular Interests LT-1SUB, LT-1GRP, LT-2SUB, LT-2GRP and LT-XX, first, so as to
keep the Uncertificated Principal Balance of each REMIC I Regular Interest
ending with the designation "GRP" equal to 0.01% of the aggregate Stated
Principal Balance of the Mortgage Loans in the related Group; second, to each
REMIC I Regular Interest ending with the designation "SUB," so that the
Uncertificated Principal Balance of each such REMIC I Regular Interest is equal
to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Group over (y) the Certificate Principal Balance
of the Class A Certificate in the related Group (except that if any such excess
is a larger number than in the preceding distribution period, the least amount
of principal shall be distributed to such REMIC I Regular Interests such that
the REMIC I Subordinated Balance Ratio is maintained); and third, any remaining
principal to REMIC I Regular Interest LT-XX.
(4) For purposes of calculating the amount of Uncertificated Accrued
Interest for the Uncertificated REMIC I Regular Interests for any
Distribution Date:
(A) the aggregate amount of the REMIC I Marker Allocation
Percentage of any Prepayment Interest Shortfalls and the REMIC I Marker
Allocation Percentage of shortfalls resulting from application of the Relief Act
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated (i) first, to Uncertificated Accrued Interest payable to REMIC I
Regular Interest LT-AA and REMIC I Regular Interest LT-ZZ up to an aggregate
amount equal to the REMIC I Interest Loss Allocation Amount, 98% and 2%,
respectively, and thereafter among REMIC I Regular Interest LT-AA, REMIC I
Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, REMIC I Regular Interest
LT-M1 and REMIC I Regular Interest LT-ZZ, pro rata based on, and to the extent
of, one month's interest at the then applicable respective Uncertificated REMIC
I Pass-Through Rate on the respective Uncertificated Principal Balance of each
such Uncertificated REMIC I Regular Interest; and
(B) the aggregate amount of the REMIC I Sub WAC Allocation
Percentage of any Prepayment Interest Shortfalls and the REMIC I Sub WAC
Allocation Percentage of shortfalls resulting from application of the Relief Act
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, to Uncertificated Accrued Interest payable to REMIC I Regular
Interest LT-1SUB, REMIC I Regular Interest LT-1GRP, REMIC I Regular Interest
LT-2SUB, REMIC I Regular Interest LT-2GRP and REMIC I Regular Interest LT-XX,
pro rata based on, and to the extent of, one month's interest at the then
applicable respective
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Uncertificated REMIC I Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC I Regular Interest.
(5) (A) The REMIC I Marker Allocation Percentage of all Realized
Losses on the Mortgage Loans shall be deemed to have been allocated in the
specified percentages, as follows: first, to Uncertificated Accrued Interest
payable to the REMIC I Regular Interest LT-AA and REMIC I Regular Interest LT-ZZ
up to an aggregate amount equal to the REMIC I Interest Loss Allocation Amount,
98% and 2%, respectively; second, to the Uncertificated Principal Balances of
REMIC I Regular Interest LT-AA and REMIC I Regular Interest LT-ZZ up to an
aggregate amount equal to the REMIC I Principal Loss Allocation Amount, 98% and
2%, respectively; and third, to the Uncertificated Principal Balances of REMIC I
Regular Interest LT-AA, REMIC I Regular Interest LT-M1 and REMIC I Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest LT-M1 has been reduced to zero; and
(B) The REMIC I Sub WAC Allocation Percentage of all Realized
Losses on the Mortgage Loans shall be deemed to have been allocated in the
specified percentages, as follows: first, so as to keep the Uncertificated
Principal Balance of each REMIC I Regular Interest ending with the designation
"GRP" equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage
Loans in the related Loan Group; second, to each REMIC I Regular Interest ending
with the designation "SUB," so that the Uncertificated Principal Balance of each
such REMIC I Regular Interest is equal to 0.01% of the excess of (x) the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group over (y) the Certificate Principal Balance of the Senior Certificate in
the related Loan Group (except that if any such excess is a larger number than
in the preceding distribution period, the least amount of Realized Losses shall
be applied to such REMIC I Regular Interests such that the REMIC I Subordinated
Balance Ratio is maintained); and third, any remaining Realized Losses shall be
allocated to REMIC I Regular Interest LT-XX.
The REMIC I Regular Interests and the Class R-I Certificates will have
the following designations and pass-through rates:
Uncertificated REMIC I Initial Uncertificated Assumed Final
Designation Pass-Through-Rate Principal Balance MaturityDate(1)
----------- ----------------- ----------------- ---------------
LT-AA Variable(2) $ 309,773,198.00 April 25, 2033
LT-A1 Variable(2) $ 1,734,937.00 April 25, 2033
LT-A2 Variable(2) $ 1,346,990.00 April 25, 2033
LT-M1 Variable(2) $ 79,024.00 April 25, 2033
LT-ZZ Variable(2) $ 3,160,951.00 April 25, 2033
LT-XP Variable(2) $ 100.00 April 25, 2033
LT-1SUB Variable(2) $ 889.71 April 25, 2033
LT-1GRP Variable(2) $ 35,588.46 April 25, 2033
LT-2SUB Variable(2) $ 690.77 April 25, 2033
LT-2GRP Variable(2) $ 27,630.57 April 25, 2033
LT-XX Variable(2) $ 316,030,300.49 April 25, 2033
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___________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
(iii) 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 I and have the
principal balances and accrue interest at the Pass-Through Rates equal to
those set forth in Section 5.01(d) and (y) the Class R-II Certificate,
which is hereby designated as the single "residual interest" in REMIC II.
The Classes of the Certificates shall have the following designations,
initial principal amounts and Pass-Through Rates:
DESIGNATION INITIAL PRINCIPAL AMOUNT PASS-THROUGH RATE
----------- ------------------------ -----------------
I-A $346,987,400 (1)
II-A $269,398,000 (2)
M $ 15,804,800 (3)
R-I $ 0.00 (4)
R-II $ 0.00 (4)
B-IO (5) (5)
XP $100.00 (6)
--------------------
(1) The Class I-A Certificates will bear interest at a rate equal to the
least of (a) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the
related Net Rate Cap. The pass-through rate with respect to the first interest
accrual period is expected to be approximately 1.70% per annum.
(2) The Class II-A Certificates will bear interest at a rate equal to the
least of (a) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the
related Net Rate Cap. The pass-through rate with respect to the first interest
accrual period is expected to be approximately 1.62% per annum.
(3) The Class M Certificates will bear interest at a rate equal to the
least of (a) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the
related Net Rate Cap. The pass-through rate with respect to the first interest
accrual period is expected to be approximately 2.42% per annum.
(4) The Class R-I Certificates and Class R-II Certificates will not bear
any interest.
(5) The Class B-IO Certificates will bear interest at a per annum rate
equal to the Class B-IO Pass-Through Rate on its Notional Amount.
(6) The Class XP Certificates will not bear any interest.
(d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date in the Trust Fund has been
designated as the "latest possible maturity date" for the REMIC I Regular
Interests and the Certificates.
(e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and (i) each such
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Class of Certificates (other than the Class XP Certificates and Class B-IO
Certificates), interest shall be calculated, on the basis of a 360-day year and
the actual number of days elapsed in the related Interest Accrual Period, based
upon the respective Pass-Through Rate set forth, or determined as provided,
above and the Certificate Principal Balance of such Class applicable to such
Distribution Date. With respect to each Distribution Date and the Class B-IO
Certificates, interest shall be calculated, on the basis of a 360-day year
consisting of twelve 30-day months, based upon the respective Pass-Through Rate
set forth, or determined as provided, above and the Certificate Principal
Balance of such Class applicable to such Distribution Date.
(f) The Certificates shall be substantially in the forms set forth in
Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇ and A-5. On original issuance, the Trustee shall
sign, countersign and shall deliver them at the direction of the Seller. Pending
the preparation of definitive Certificates of any Class, the Trustee may sign
and countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. If temporary Certificates are issued, the Seller will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office of the Trustee, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and countersign and deliver in exchange therefor a like
aggregate principal amount, in authorized denominations for such Class, of
definitive Certificates of the same Class. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits as
definitive Certificates.
(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), $1,000
and in each case increments of $1.00 in excess thereof, and (ii) in the case of
the 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 Certificate Principal Balance 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
Certificate Principal Balance of such Class on the Closing Date. The Residual
Certificates shall each be issued in certificated fully-registered form. 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 Certificate Principal Balance 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 Certificate Principal Balance 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
Certificate Principal Balance of each such respective Class on the Closing Date.
The Certificates referred to in clause (i) and if at
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any time there are to be Global Certificates, the Global Certificates shall be
delivered by the Seller to the Depository or pursuant to the Depository's
instructions, shall be delivered by the Seller on behalf of the Depository to
and deposited with the DTC Custodian. The Trustee shall sign the Certificates by
facsimile or manual signature and countersign them by manual signature on behalf
of the Trustee by one or more authorized signatories, each of whom shall be
Responsible Officers of the Trustee or its agent. A Certificate bearing the
manual and facsimile signatures of individuals who were the authorized
signatories of the Trustee or its agent at the time of issuance shall bind the
Trustee, notwithstanding that such individuals or any of them have ceased to
hold such positions prior to the delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate the
manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each
REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each REMIC shall have a tax year that
is a calendar year and shall report income on an accrual basis.
(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:
[With respect to the Class B-IO Certificates and Class XP Certificates:
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 HOLDING OF A CERTIFICATE AND
THE SERVICING, MANAGEMENT AND 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 ("PTCE") 84-14, ▇▇▇▇ ▇▇-▇▇,
▇▇▇▇ ▇▇-▇, ▇▇▇▇ 95-60 OR PTCE 96-23 AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL FIDUCIARY
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DUTIES ON THE PART OF THE SELLER, THE SECURITIES ADMINISTRATOR, THE MASTER
SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A
BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A
REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF
AN INSTITUTIONAL ACCREDITED INVESTOR OR UNLESS THE TRANSFEREE PROVIDES THE
TRUSTEE WITH AN OPINION OF COUNSEL FOR THE BENEFIT OF THE TRUSTEE, MASTER
SERVICER AND THE SECURITIES ADMINISTRATOR AND WHICH THEY MAY RELY WHICH IS
SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE IS
PERMISSIBLE UNDER LOCAL LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND
WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE SECURITIES
ADMINISTRATOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT.
[With respect to the Residual Certificates: NO TRANSFER OF THIS CERTIFICATE
MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A
CERTIFICATION THAT IT IS NOT A PLAN OR ACTING ON BEHALF OF A PLAN USING
ASSETS OF A PLAN PURSUANT TO SECTION 5.07(a) OF THE AGREEMENT OR AN OPINION
OF COUNSEL AS PROVIDED IN SECTION 5.07(a) OF THE AGREEMENT THAT THE
PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER LOCAL LAW WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION
406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER
SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE
UNITED STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING
(OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS
ACTIVITIES ARE SUBJECT TO TAX AND EXCEPT FOR ▇▇▇▇▇▇▇ MAC, A MAJORITY OF ITS
BOARD OF DIRECTORS IS NOT SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
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ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN
SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1
OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE
CODE ON UNRELATED BUSINESS TAXABLE INCOME), (D) RURAL ELECTRIC AND
TELEPHONE COOPERATIVES DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (E)
AN ELECTING LARGE PARTNERSHIP UNDER SECTION 775(a) OF THE CODE (ANY SUCH
PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING
HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A
DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN
ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR
ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER
AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY
PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY
ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH.
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:
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(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 addressed to
the Trustee to the effect that the delivery of (x) and (y) above are not
sufficient to confirm that the proposed transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and other applicable laws, the Trustee
shall as a condition of the registration of any such transfer require the
transferor to furnish such other certifications, legal opinions or other
information prior to registering the transfer of an Individual Certificate
as shall be set forth in such Opinion of Counsel.
(d) Subject to Subsection 5.02(h), so long as a Global Certificate of such
Class is outstanding and is held by or on behalf of the Depository, transfers of
beneficial interests in such Global Certificate, or transfers by holders of
Individual Certificates of such Class to transferees that take delivery in the
form of beneficial interests in the Global Certificate, may be made only in
accordance with this Subsection 5.02(d) and in accordance with the rules of the
Depository:
(i) In the case of a beneficial interest in the Global Certificate
being transferred to an Institutional Accredited Investor, such transferee
shall be required to take delivery in the form of an Individual Certificate
or Certificates and the Trustee shall register such transfer only upon
compliance with the provisions of Subsection 5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in the
form of an Individual Certificate or Certificates of such Class, except as
set forth in clause (i) above, the Trustee shall register such transfer
only upon compliance with the provisions of Subsection 5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class being
transferred to a transferee that takes delivery in the form of a beneficial
interest in a Global Certificate of such Class, the Trustee shall register
such transfer if the transferee has provided the Trustee with a Rule 144A
Certificate or comparable evidence as to its QIB status.
(iv) No restrictions shall apply with respect to the transfer or
registration of transfer of a beneficial interest in the Global Certificate
of a Class to a transferee that takes delivery in the form of a beneficial
interest in the Global Certificate of such Class; provided that each such
transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that
it is a QIB.
(e) Subject to Subsection 5.02(h), an exchange of a beneficial interest in
a Global Certificate of a Class for an Individual Certificate or Certificates of
such Class, an exchange of an Individual Certificate or Certificates of a Class
for a beneficial interest in the Global Certificate of
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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.
(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
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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 the Corporate Trust Office, sign, countersign and
deliver at the 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 the Corporate Trust Office; 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 signature guarantee, in form satisfactory
to the Trustee, duly executed by the holder thereof or his or her attorney duly
authorized in writing.
(k) No service charge shall be made for any transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
(l) The Trustee shall cancel all Certificates surrendered for transfer or
exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.
Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. (a) If (i)
any mutilated Certificate is surrendered to the Trustee, or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The
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mutilated, destroyed, lost or stolen Certificate shall thereupon be canceled of
record by the Trustee and shall be of no further effect and evidence no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any duplicate Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Seller, the Trustee and any agent
of the Seller or the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 6.01 and for all other purposes whatsoever.
Neither the Seller, the Trustee nor any agent of the Seller or the Trustee shall
be affected by notice to the contrary. No Certificate shall be deemed duly
presented for a transfer effective on any Record Date unless the Certificate to
be transferred is presented no later than the close of business on the third
Business Day preceding such Record Date.
Section 5.05 TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES. (a) Residual
Certificates, or interests therein, may not be transferred without the prior
express written consent of the Tax Matters Person and the Seller. As a
prerequisite to such consent, the proposed transferee must provide the Tax
Matters Person, the Seller and the Trustee with an affidavit that the proposed
transferee is a Permitted Transferee (and, unless the Tax Matters Person and the
Seller consent to the transfer to a person who is not a U.S. Person, an
affidavit that it is a U.S. Person) as provided in Subsection 5.05(b).
(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (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
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with respect to such purported Holder under the provisions of this Agreement so
long as the written affidavit referred to above was received with respect to
such transfer, and the Tax Matters Person, the Trustee and the Seller, as
applicable, had no knowledge that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that was
in fact not a permitted transferee under this Subsection 5.05(b) at the time it
became a Holder all payments made on such Residual Certificate. Each Holder of a
Residual Certificate, by acceptance thereof, shall be deemed for all purposes to
have consented to the provisions of this Subsection 5.05(b) and to any amendment
of this Agreement deemed necessary (whether as a result of new legislation or
otherwise) by counsel of the Tax Matters Person or the Seller to ensure that the
Residual Certificates are not transferred to any Person who is not a Permitted
Transferee and that any transfer of such Residual Certificates will not cause
the imposition of a tax upon the Trust or cause any REMIC to fail to qualify as
a REMIC.
(c) Unless the Tax Matters Person shall have consented in writing (which
consent may be withheld in the Tax Matters Person's sole discretion), the
Residual Certificates (including a beneficial interest therein) may not be
purchased by or transferred to any person who is not a United States Person.
(d) By accepting a Residual Certificate, the purchaser thereof agrees to be
a Tax Matters Person, and appoints the Securities Administrator to act as its
agent with respect to all matters concerning the tax obligations of the Trust.
Section 5.06 RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES. (a) No offer,
sale, transfer or other disposition (including pledge) of any Certificate shall
be made by any Holder thereof unless registered under the Securities Act, or an
exemption from the registration requirements of the Securities Act and any
applicable state securities or "Blue Sky" laws is available and the prospective
transferee (other than the Seller) of such Certificate signs and delivers to the
Trustee an Investment Letter, if the transferee is an Institutional Accredited
Investor, in the form set forth as Exhibit F-l hereto, or a Rule 144A
Certificate, if the transferee is a QIB, in the form set forth as Exhibit F-2
hereto. Notwithstanding the provisions of the immediately preceding sentence, no
restrictions shall apply with respect to the transfer or registration of
transfer of a beneficial interest in any Certificate that is a Global
Certificate of a Class to a transferee that takes delivery in the form of a
beneficial interest in the Global Certificate of such Class provided that each
such transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that it is
a QIB. In the case of a proposed transfer of any Certificate to a transferee
other than a QIB, the Trustee may require an Opinion of Counsel that such
transaction is exempt from the registration requirements of the Securities Act.
The cost of such opinion shall not be an expense of the Trustee or the Trust
Fund.
(b) The Private Certificates shall each bear a Securities Legend.
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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 (a "Plan") which is subject to Title I of ERISA and/or
Section 4975 of the Code or by a person using assets of a Plan, unless the
proposed transferee provides either (i) the Trustee with an Opinion of Counsel
for the benefit of the Trustee, the Master Servicer and the Securities
Administrator and on which they may rely which is the satisfactory to the
Trustee, which opinion will not be at the expense of the Trustee, the Master
Servicer or the Securities Administrator, that the purchase of such Certificates
by or on behalf of such Plan is permissible under applicable law, will not
constitute or result in a nonexempt prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Trustee, the Master Servicer
or the Securities Administrator to any obligation in addition to those
undertaken in the Agreement or (ii) in the case of the Class XP Certificates and
Class B-IO Certificates, a representation or certification to the Trustee (upon
which the Trustee is authorized to rely) to the effect that the proposed
transfer and 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 ("PTCE") 84-14 (Class
Exemption for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers); PTCE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTCE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTCE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers and (II) will not
subject the Seller, the Securities Administrator, the Master Servicer 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 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 holding of an interest in
such Certificate to that Person and the subsequent servicing, management and
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 PTCE 96-23 and (II) will not subject the Seller, the
Master Servicer, the Securities Administrator or the Trustee to any obligation
in addition to those undertaken in the Agreement.
(c) Each beneficial owner of a Class M Certificate or any interest therein
shall be deemed to have represented, by virtue of its acquisition or holding of
that certificate or interest therein, that either (i) it is not a Plan or
investing with "Plan Assets", (ii) (1) it is an insurance company, (2) the
source of funds used to acquire or hold the certificate or interest therein is
an "insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.
(d) None of the Trustee, the Master Servicer, or the Securities
Administrator will be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect
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to the Global Certificates. Any attempted or purported transfer of any
Certificate in violation of the provisions of Subsections (a), (b) or (c) above
shall be void ab initio and such Certificate shall be considered to have been
held continuously by the prior permitted Certificateholder. Any transferor of
any Certificate in violation of such provisions, shall indemnify and hold
harmless the Trustee, the Master Servicer and the Securities Administrator from
and against any and all liabilities, claims, costs or expenses incurred by the
Trustee, the Master Servicer or the Securities Administrator 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
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) On each Distribution
Date, an amount equal to the Interest Funds and Principal Funds for such
Distribution Date shall be withdrawn by the Trustee from the Distribution
Account to the extent of funds on deposit therein and distributed as directed in
accordance with distribution instructions provided to it by the Securities
Administrator for such Distribution Date, in the following order of priority:
FIRST, to pay any accrued and unpaid interest on the Certificates, in the
following order of priority:
1. From Interest Funds in respect of:
(a) Loan Group 1, to the Class I-A Certificates, the Current
Interest and then any Interest Carry Forward Amount for such Class;
(b) Loan Group 2, to the Class II-A Certificates, the Current
Interest and then any Interest Carry Forward Amount for such Class;
2. From remaining Interest Funds in respect of:
(a) Loan Group 1, to the Class II-A Certificates, the remaining
Interest Carry-Forward Amount for such Class to the extent not paid in
clause 1(b) above;
(b) Loan Group 2, to the Class I-A Certificates, the remaining
Interest Carry-Forward Amount for such Class to the extent not paid in
clause 1(a) above;
3. From remaining Interest Funds in respect of both Loan Groups, to
the Class M Certificates, the Current Interest for such Class;
4. Any Excess Spread to the extent necessary to meet a level of
overcollateralization equal to the Overcollateralization Target Amount will
be the Extra Principal Distribution Amount and will be included as part of
the Principal Distribution Amount and distributed in accordance with
clauses SECOND (A) and (B) below; and
5. Any Remaining Excess Spread will be added to any Excess
Overcollateralization Amount and will be applied as Excess Cashflow
pursuant to clauses SECOND (D) through SEVENTH below.
Notwithstanding the provisions of clauses FIRST 4 and 5, above, on the
first Distribution Date, the Excess Spread (exclusive of any amount thereof
necessary to offset any Realized Losses for such Distribution Date) will be paid
to the holders of the Class B-IO Certificates.
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On any Distribution Date, any shortfalls resulting from the application of
the Relief Act and any Prepayment Interest Shortfalls to the extent not covered
by Compensating Interest Payments will be allocated as set forth in the
definition of "Current Interest" herein.
SECOND, to pay as principal on the Certificates entitled to payments of
principal, in the following order of priority:
(A) For each Distribution Date (i) prior to the Stepdown Date or (ii) on which
a Trigger Event is in effect, from the Principal Funds and the Extra
Principal Distribution Amount for such Distribution Date:
1. To the Class I-A Certificates and Class II-A Certificates, the
Principal Distribution Amount, pro rata, based on the Principal Funds for
such Distribution Date from each of Loan Group 1 and Loan Group 2,
respectively, in each case until the Certificate Principal Balance of the
respective Class of Certificates is reduced to zero; and
2. To the Class M Certificates, any remaining Principal Distribution
Amount with respect to both Loan Groups, until the Certificate Principal
Balance thereof is reduced to zero;
(B) For each Distribution Date on or after the Stepdown Date, so long as a
Trigger Event is not in effect, from the Principal Funds and the Extra
Principal Distribution Amount for such Distribution Date:
1. To the Class I-A Certificates and Class II-A Certificates, the
Class A Principal Distribution Amount, pro rata, based on the Principal
Funds for such Distribution Date from each of Loan Group 1 and Loan Group
2, respectively, in each case until the Certificate Principal Balance of
the respective Class of Certificates is reduced to zero; and
2. To the Class M Certificates, from any remaining Principal
Distribution Amount with respect to both Loan Groups, the Class M Principal
Distribution Amount, until the Certificate Principal Balance thereof is
reduced to zero;
(C) Notwithstanding the provisions of clauses SECOND (A) and (B) above, if on
any Distribution Date either Class of Class A Certificates is no longer
outstanding, the pro rata portion of the Principal Distribution Amount or
the Class A Principal Distribution Amount, as applicable, otherwise
allocable to such Class A Certificates will be allocated to the remaining
Class of Class A Certificates; and
(D) Notwithstanding the provisions of clauses SECOND (A) and (B), if on any
Distribution Date the pro rata portion of the Class A Principal
Distribution Amount allocated to a Class of Class A Certificates is
insufficient to pay to such Class A Certificates the principal to which
they are entitled under clause SECOND (B) (1), any Excess Cashflow will be
allocated in an amount equal to the lesser of the deficiency and the
aggregate amount of such Excess Cashflow, and if the pro rata portion of
the Class A Principal Distribution Amount is
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insufficient for both Classes of Class A Certificates, then pro rata based
upon the respective amounts of such deficiencies.
THIRD, from any remaining Excess Cashflow, to the Class M Certificates an
amount equal to (a) any Interest Carry Forward Amount, and then (b) any Unpaid
Realized Loss Amount for such Class for such Distribution Date;
FOURTH, from any remaining Excess Cashflow, to the Class I-A Certificates
and Class II-A Certificates, any Basis Risk Shortfall Carry Forward Amount for
such Class for such Distribution Date, pro rata based on the amount of such
Basis Risk Shortfall Carry Forward Amount, in each case to the extent not
covered by the Cap Contracts;
FIFTH, from any remaining Excess Cashflow, to the Class M Certificates, any
Basis Risk Shortfall Carryforward Amount for such Class for such Distribution
Date, to the extent not covered by the Cap Contracts;
SIXTH, from any remaining Excess Cashflow, to the Class B-IO Certificates,
the Class B-IO Distribution Amount; and
SEVENTH, any remaining amounts to the Residual Certificates.
(b) On each Distribution Date, the Cap Contract Payment Amounts with
respect to such Distribution Date shall be distributed in the following order of
priority, in each case to the extent of amounts available:
(i) FIRST, from the related Cap Contract Payment Amounts, to
the holders of the Class I-A Certificates and Class M Certificates, any
Basis Risk Shortfall Carryforward Amount for such Distribution Date;
(ii) SECOND, from any remaining amounts received from the related Cap
Contract, to the Class I-A Certificates and Class M Certificates, any
Current Interest and Interest Carry Forward Amount for such Class to the
extent not covered by Interest Funds or Excess Cashflow on such
Distribution Date pursuant to clause (a) above;
(iii) THIRD, from any remaining amounts received from the non-related
Cap Contract, to the Class I-A Certificates and Class M Certificates, any
Basis Risk Shortfall Carry Forward Amount, and then any Current Interest
and Interest Carry Forward Amount for such Distribution Date to the extent
not covered in clauses (b)(i) and (ii) above;
(iv) FOURTH, from any remaining amounts received from the Cap
Contracts, to the Class II-A Certificates, any Basis Risk Shortfall Carry
Forward Amount for such Distribution Date; and
(v) FIFTH, from any remaining amounts received from the Cap Contracts,
to the Class B-IO Certificates.
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(c) On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Prepayment Charge Loans received during the related Prepayment
Period will be withdrawn from the Distribution Account and distributed by the
Trustee to the Class XP Certificates and shall not be available for distribution
to the holders of any other Class of Certificates. The payment of such
Prepayment Charges shall not reduce the Certificate Principal Balance of the
Class XP Certificates. In addition, as provided in Section 4.07 hereof, on the
Distribution Date immediately following the Prepayment Period in which the last
Prepayment Charge is collectible on the Prepayment Charge Loans which Prepayment
Period is the month of April 2008, the Trustee shall distribute the amount on
deposit in the Class XP Reserve Account to the Class XP Certificates in
reduction of the Certificate Principal Balance thereof until the Certificate
Principal Balance thereof is reduced to zero.
(d) The expenses and fees of the Trust shall be paid by each of the REMICs,
to the extent that such expenses relate to the assets of each of such respective
REMICs, and all other expenses and fees of the Trust shall be paid pro rata by
each of the REMICs.
Section 6.02 ALLOCATION OF LOSSES. On or prior to each Determination Date,
the Master Servicer shall determine the amount of any Realized Loss in respect
of each Mortgage Loan that occurred during the immediately preceding calendar
month. Any Realized Losses with respect to the Mortgage Loans shall be applied
on each Distribution Date after the distributions provided for in Section 6.01,
in reduction of the Certificate Principal Balance of the Class M Certificates as
provided in the definition of Applied Realized Loss Amount.
Section 6.03 PAYMENTS. (a) On each Distribution Date, other than the final
Distribution Date, the Trustee shall distribute to each Certificateholder of
record on the directly preceding Record Date the Certificateholder's pro rata
share of its Class (based on the aggregate Fractional Undivided Interest
represented by such Holder's Certificates) of all amounts required to be
distributed on such Distribution Date to such Class, based on information
provided to the Securities Administrator by the Master Servicer. The Securities
Administrator shall calculate the amount to be distributed to each Class and,
based on such amounts, the Securities Administrator shall determine the amount
to be distributed to each Certificateholder. All of the Securities
Administrator's calculations of payments shall be based solely on information
provided to the Securities Administrator by the Master Servicer. The Securities
Administrator shall not be required to confirm, verify or recompute any such
information but shall be entitled to rely conclusively on such information.
(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 Securities Administrator shall make
available to the parties hereto and each Certificateholder via the Securities
Administrator's internet website as set forth below, the following information,
expressed with respect to clauses (i) through (vii) in the aggregate and as a
Fractional Undivided Interest representing an initial Certificate Principal
Balance of $1,000, in the case of the Interest Only Certificates, a Notional
Amount of $1,000:
(i) the Certificate Principal Balance 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 Certificate Principal Balance 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 or the
Master Servicer included in such distribution separately stated for each
Loan Group;
(ix) the aggregate amount of any Realized Losses (listed separately
for each category of Realized Loss and for each Loan Group) during the
related Prepayment Period and cumulatively since the Cut-off Date and the
amount and source (separately identified) of any distribution in respect
thereof included in such distribution;
(x) with respect to each Mortgage Loan which incurred a Realized Loss
during the related Prepayment Period, (i) the loan number, (ii) the Stated
Principal Balance of such Mortgage Loan as of the Cut-off Date, (ii) the
Stated Principal Balance of such Mortgage Loan as of the beginning of the
related Due Period, (iii) the Net Liquidation Proceeds with respect to such
Mortgage Loan and (iv) the amount of the Realized Loss with respect to such
Mortgage Loan;
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(xi) with respect to each Loan Group, the amount of Scheduled
Principal and Principal Prepayments, (including but separately identifying
the principal amount of principal prepayments, Insurance Proceeds, the
purchase price in connection with the purchase of Mortgage Loans, cash
deposits in connection with substitutions of Mortgage Loans and Net
Liquidation Proceeds) and the number and principal balance of Mortgage
Loans purchased or substituted for during the relevant period and
cumulatively since the Cut-off Date;
(xii) the number of Mortgage Loans (excluding REO Property) in each
Loan Group remaining in the Trust Fund as of the end of the related
Prepayment Period;
(xiii) information for each Loan Group and in the aggregate regarding
any Mortgage Loan delinquencies as of the end of the related Prepayment
Period, including the aggregate number and aggregate Outstanding Principal
Balance of Mortgage Loans (a) delinquent 30 to 59 days on a contractual
basis, (b) delinquent 60 to 89 days on a contractual basis, and (c)
delinquent 90 or more days on a contractual basis, in each case as of the
close of business on the last Business Day of the immediately preceding
month;
(xiv) for each Loan Group, the number of Mortgage Loans in the
foreclosure process as of the end of the related Due Period and the
aggregate Outstanding Principal Balance of such Mortgage Loans;
(xv) for each Loan Group, the number and aggregate Outstanding
Principal Balance of all Mortgage Loans as to which the Mortgaged Property
was REO Property as of the end of the related Due Period;
(xvi) the book value (the sum of (A) the Outstanding Principal Balance
of the Mortgage Loan, (B) accrued interest through the date of foreclosure
and (C) foreclosure expenses) of any REO Property in each Loan Group;
provided that, in the event that such information is not available to the
Securities Administrator on the Distribution Date, such information shall
be furnished promptly after it becomes available;
(xvii) the amount of Realized Losses allocated to each Class of
Certificates since the prior Distribution Date and in the aggregate for all
prior Distribution Dates; and
(xviii) the Interest Carry Forward Amount and any Basis Risk Shortfall
Carry Forward Amount for each Class of Certificates;
(xix) the amount of such distribution to Holders of each Class
allocable to interest and the portion thereof, if any, provided by a Cap
Contracts;
(xx) the cumulative amount of Applied Realized Loss Amounts to date
and, in addition, if the Certificate Principal Balance of the Class M
Certificates has been reduced to zero, the cumulative amount of any
Realized Losses that have not been allocated to any Certificates; and
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(xxi) whether a Trigger Event exists.
The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the Master Servicer.
The Securities Administrator may conclusively rely on such information and shall
not be required to confirm, verify or recalculate any such information.
The Securities Administrator may make available each month, to any
interested party , the monthly statement to Certificateholders via the
Securities Administrator's website initially located at "▇▇▇.▇▇▇▇▇▇▇.▇▇▇."
Assistance in using the website can be obtained by calling the Securities
Administrator's customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇. 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 Securities Administrator's customer
service desk and indicating such. The Securities Administrator shall have the
right to change the way such reports are distributed in order to make such
distribution more convenient and/or more accessible to the parties, and the
Securities Administrator shall provide timely and adequate notification to all
parties regarding any such change.
To the extent timely received from the Securities Administrator, the
Trustee will also make monthly statements available each month to
Certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇. Assistance in
using the Trustee's website service can be obtained by calling the Trustee's
customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇.
(b) By April 30 of each year beginning in 2004, the Trustee will furnish
such report to each Holder of the Certificates of record at any time during the
prior calendar year as to the aggregate of amounts reported pursuant to
subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Securities Administrator may determine and advises
the Trustee to be necessary and/or to be required by the Internal Revenue
Service or by a federal or state law or rules or regulations to enable such
Holders to prepare their tax returns for such calendar year. Such obligations
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Securities Administrator or the
Trustee pursuant to the requirements of the Code.
Section 6.05 MONTHLY ADVANCES. If the Scheduled Payment on a Mortgage Loan
that was due on a related Due Date and is delinquent other than as a result of
application of the Relief Act and for which the related Servicer was required to
make an advance pursuant to the related Servicing Agreement exceeds the amount
deposited in the Master Servicer Collection Account which will be used for an
advance with respect to such Mortgage Loan, the Master Servicer will deposit in
the Master Servicer Collection Account not later than the Distribution Account
Deposit Date immediately preceding the related Distribution Date an amount equal
to such deficiency, net of the Servicing Fee for such Mortgage Loan except to
the extent the Master Servicer determines any such advance to be a
Nonrecoverable Advance. Subject to the foregoing, the Master Servicer shall
continue to make such advances through the date that the related Servicer is
required to do so under its Servicing Agreement. If the Master Servicer deems an
advance to be a Nonrecoverable Advance, on the Distribution Account Deposit
Date, the Master Servicer shall present an Officer's Certificate
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to the Trustee (i) stating that the Master Servicer elects not to make a Monthly
Advance in a stated amount and (ii) detailing the reason it deems the advance to
be a Nonrecoverable Advance.
Section 6.06 COMPENSATING INTEREST PAYMENTS. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the lesser of (i) the sum
of the aggregate amounts required to be paid by the Servicers under the
Servicing Agreements with respect to subclauses (a) and (b) of the definition of
Interest Shortfall with respect to the Mortgage Loans for the related
Distribution Date, and not so paid by the related Servicers and (ii) the Master
Servicing Compensation for such Distribution Date (such amount, the
"Compensating Interest Payment"). The Master Servicer shall not be entitled to
any reimbursement of any Compensating Interest Payment.
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ARTICLE VII
The Master Servicer
Section 7.01 LIABILITIES OF THE MASTER SERVICER. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 7.02 MERGER OR CONSOLIDATION OF THE MASTER SERVICER.
The Master Servicer will keep in full force and effect its existence,
rights and franchises as a corporation under the laws of the state of its
incorporation, and will obtain and preserve its qualification to do business as
a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.
Any Person into which the Master Servicer may be merged or consolidated, or
any corporation resulting from any merger or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor of the Master Servicer hereunder,
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.
Section 7.03 INDEMNIFICATION OF THE TRUSTEE, THE MASTER SERVICER AND THE
SECURITIES ADMINISTRATOR. (a) The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement, the Servicing Agreements, the
Assignment Agreements or the Certificates or the powers of attorney delivered by
the Trustee hereunder (i) related to the Master Servicer's failure to perform
its duties in compliance with this Agreement (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) or (ii)
incurred by reason of the Master Servicer's willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder, provided, in each case, that with
respect to any such claim or legal action (or pending or threatened claim or
legal action), the Trustee shall have given the Master Servicer and the Seller
written notice thereof promptly after the Trustee shall have with respect to
such claim or legal action knowledge thereof. The Trustee's failure to deliver
any such notice shall not affect the Trustee's right to indemnification
hereunder, except to the extent the Master Servicer is materially prejudiced by
such failure to give notice. This indemnity shall survive the resignation or
removal of the Trustee, Master Servicer or the Securities Administrator and the
termination of this Agreement.
(b) The Seller will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise covered by the
Master Servicer's indemnification pursuant to Subsection (a) above.
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Section 7.04 LIMITATIONS ON LIABILITY OF THE MASTER SERVICER AND OTHERS.
Subject to the obligation of the Master Servicer to indemnify the Indemnified
Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Seller, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.
(c) The Master Servicer, the Custodian and any director, officer, employee
or agent of the Master Servicer or the Custodian shall be indemnified by the
Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer is indemnified by the Servicer
thereunder), other than (i) any such loss, liability or expense related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, respectively, or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's or the
Custodian's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or under the Custodial Agreement, as applicable,
or by reason of reckless disregard of obligations and duties hereunder or under
the Custodial Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably withheld),
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Master Servicer shall
be entitled to be reimbursed therefor out of the Master Servicer Collection
Account as provided by Section 4.03. Nothing in this Subsection 7.04(d) shall
affect the Master Servicer's obligation to supervise, or to take such actions as
are necessary to ensure, the servicing and administration of the Mortgage Loans
pursuant to Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required
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to investigate or make recommendations concerning potential liabilities which
the Trust might incur as a result of such course of action by reason of the
condition of the Mortgaged Properties but shall give notice to the Trustee if it
has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of
any Servicer, except as otherwise expressly provided herein.
Section 7.05 MASTER SERVICER NOT TO RESIGN. Except as provided in Section
7.07, the Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon a determination that any such duties hereunder
are no longer permissible under applicable law and such impermissibility cannot
be cured. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Independent Counsel to such effect
delivered to the Trustee. No such resignation by the Master Servicer shall
become effective until EMC or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall have assumed the responsibilities
and obligations of the Master Servicer in accordance with Section 8.02 hereof.
The Trustee shall notify the Rating Agencies of the resignation of the Master
Servicer.
Section 7.06 SUCCESSOR MASTER SERVICER. In connection with the appointment
of any successor master servicer or the assumption of the duties of the Master
Servicer, EMC or the Trustee may make such arrangements for the compensation of
such successor master servicer out of payments on the Mortgage Loans as EMC or
the Trustee and such successor master servicer shall agree. If the successor
master servicer does not agree that such market value is a fair price, such
successor master servicer shall obtain two quotations of market value from third
parties actively engaged in the servicing of single-family mortgage loans.
Notwithstanding the foregoing, the compensation payable to a successor master
servicer may not exceed the compensation which the Master Servicer would have
been entitled to retain if the Master Servicer had continued to act as Master
Servicer hereunder.
Section 7.07 SALE AND ASSIGNMENT OF MASTER SERVICING. The Master Servicer
may sell and assign its rights and delegate its duties and obligations in its
entirety as Master Servicer under this Agreement and EMC may terminate the
Master Servicer without cause and select a new Master Servicer; provided,
however, that: (i) the purchaser or transferee accepting such assignment and
delegation (a) shall be a Person which shall be qualified to service mortgage
loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; (b) shall have a net worth of not less than
$10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency
shall be given prior written notice of the identity of the proposed successor to
the Master Servicer and each Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; (iii) the Master Servicer assigning and selling the
master servicing shall deliver to the Trustee an Officer's Certificate and an
Opinion of Independent Counsel addressed to the Trustee,
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each stating that all conditions precedent to such action under this Agreement
have been completed and such action is permitted by and complies with the terms
of this Agreement; and (iv) in the event the Master Servicer is terminated
without cause by EMC, EMC shall pay the terminated Master Servicer a termination
fee equal to 0.25% of the aggregate Stated Principal Balance of the Mortgage
Loans at the time the master servicing of the Mortgage Loans is transferred to
the successor Master Servicer. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date thereof.
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ARTICLE VIII
Default
Section 8.01 EVENTS OF DEFAULT. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
only with respect to the defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Distribution Account any amount so required to be deposited pursuant to
this Agreement (other than a Monthly Advance), and such failure continues
unremedied for a period of three Business Days after the date upon which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any material
respect any other material covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements materially
affect the rights of Certificateholders, and such failure continues
unremedied for a period of 60 days after the date on which written notice
of such failure, properly requiring the same to be remedied, shall have
been given to the Master Servicer by the Trustee or to the Master Servicer
and the Trustee by the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or order
by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding up or liquidation of its
affairs, and the continuance of any such decree or order is unstayed and in
effect for a period of 60 consecutive days, or an involuntary case is
commenced against the Master Servicer under any applicable insolvency or
reorganization statute and the petition is not dismissed within 60 days
after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating
to the Master Servicer or substantially all of its property; or the Master
Servicer admits in writing its inability to pay its debts generally as they
become due, files a petition to take advantage of any applicable insolvency
or reorganization statute, makes an assignment for the benefit of its
creditors, or voluntarily suspends payment of its obligations;
(v) The Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 7.05 or 7.07; or
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(vi) The Master Servicer fails to deposit, or cause to be deposited,
in the Distribution Account any Monthly Advance (other than a
Nonrecoverable Advance) by 5:00 p.m. New York City time on the Distribution
Account Deposit Date.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of EMC, may terminate
all of the rights and obligations (but not the liabilities) of the Master
Servicer under this Agreement and in and to the Mortgage Loans and/or the REO
Property serviced by the Master Servicer and the proceeds thereof. Upon the
receipt by the Master Servicer of the written notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee
pursuant to this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; and (ii) originals or copies
of all documents of the Master Servicer reasonably requested by the Trustee to
enable it to assume the Master Servicer's duties thereunder. In addition to any
other amounts which are then, or, notwithstanding the termination of its
activities under this Agreement, may become payable to the Master Servicer under
this Agreement, the Master Servicer shall be entitled to receive, out of any
amount received on account of a Mortgage Loan or related REO Property, that
portion of such payments which it would have received as reimbursement under
this Agreement if notice of termination had not been given. The termination of
the rights and obligations of the Master Servicer shall not affect any
obligations incurred by the Master Servicer prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in clause
(vi) of this Section 8.01 shall occur, the Trustee shall, by notice in writing
to the Master Servicer, which may be delivered by telecopy, immediately
terminate all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of Monthly Advances and other advances
of its own funds, and the Trustee shall act as provided in Section 8.02 to carry
out the duties of the Master Servicer, including the obligation to make any
Monthly Advance the nonpayment of which was an Event of Default described in
clause (vi) of this Section 8.01. Any such action taken by the Trustee must be
prior to the distribution on the relevant Distribution Date.
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Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon the receipt
by the Master Servicer of a notice of termination pursuant to Section 8.01 or an
Opinion of Independent Counsel pursuant to Section 7.05 to the effect that the
Master Servicer is legally unable to act or to delegate its duties to a Person
which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; provided, however, that EMC shall have the right to
either (a) immediately assume the duties of the Master Servicer or (b) select a
successor Master Servicer; provided further, however, that the Trustee shall
have no obligation whatsoever with respect to any liability (other than advances
deemed recoverable and not previously made) incurred by the Master Servicer at
or prior to the time of termination. As compensation therefor, but subject to
Section 7.06, the Trustee shall be entitled to compensation which the Master
Servicer would have been entitled to retain if the Master Servicer had continued
to act hereunder, except for those amounts due the Master Servicer as
reimbursement permitted under this Agreement for advances previously made or
expenses previously incurred. Notwithstanding the above, the Trustee may, if it
shall be unwilling so to act, or shall, if it is legally unable so to act,
appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution which is a ▇▇▇▇▇▇ Mae- or
▇▇▇▇▇▇▇ Mac-approved servicer, and with respect to a successor to the Master
Servicer only, having a net worth of not less than $10,000,000, as the successor
to the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the Trustee shall obtain a letter from each Rating Agency that
the ratings, if any, on each of the Certificates will not be lowered as a result
of the selection of the successor to the Master Servicer. Pending appointment of
a successor to the Master Servicer hereunder, the Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on the Mortgage Loans as it and such successor shall
agree; provided, however, that the provisions of Section 7.06 shall apply, the
compensation shall not be in excess of that to which the Master Servicer would
have been entitled to if the Master Servicer had continued to act hereunder, and
that such successor shall undertake and assume the obligations of the Trustee to
pay compensation to any third Person acting as an agent or independent
contractor in the performance of master servicing responsibilities hereunder.
The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.
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Section 8.03 NOTIFICATION TO CERTIFICATEHOLDERS. Upon any termination or
appointment of a successor to the Master Servicer, the Trustee shall give prompt
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register and to the Rating Agencies.
Section 8.04 WAIVER OF DEFAULTS. The Trustee shall transmit by mail to all
Certificateholders, within 60 days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Trustee, unless such Event of
Default shall have been cured, notice of each such Event of Default. The Holders
of Certificates evidencing Fractional Undivided Interests aggregating not less
than 51% of the Trust Fund may, on behalf of all Certificateholders, waive any
default by the Master Servicer in the performance of its obligations hereunder
and the consequences thereof, except a default in the making of or the causing
to be made any required distribution on the Certificates, which default may only
be waived by Holders of Certificates evidencing Fractional Undivided Interests
aggregating 100% of the Trust Fund. Upon any such waiver of a past default, such
default shall be deemed to cease to exist, and any Event of Default arising
therefrom shall be deemed to have been timely remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Trustee shall give notice of any such waiver to the Rating Agencies.
Section 8.05 LIST OF CERTIFICATEHOLDERS. Upon written request of three or
more Certificateholders of record, for purposes of communicating with other
Certificateholders with respect to their rights under this Agreement, the
Trustee will afford such Certificateholders access during business hours to the
most recent list of Certificateholders held by the Trustee.
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ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 DUTIES OF TRUSTEE. (a) The Trustee, prior to the occurrence of
an Event of Default and after the curing or waiver of all Events of Default
which may have occurred, and the Securities Administrator each undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement as duties of the Trustee and the Securities Administrator,
respectively. If an Event of Default has occurred and has not been cured or
waived, the Trustee shall exercise such of the rights and powers vested in it by
this Agreement, and subject to Section 8.02(b) use the same degree of care and
skill in their exercise, as a prudent person would exercise under the
circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically required
to be furnished to the Trustee and the Securities Administrator pursuant to any
provision of this Agreement, the Trustee and the Securities Administrator,
respectively, shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that neither the Trustee nor the
Securities Administrator shall be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished hereunder; provided, further, that neither the Trustee nor
the Securities Administrator shall be responsible for the accuracy or
verification of any calculation provided to it pursuant to this Agreement.
(c) On each Distribution Date, the Trustee shall make monthly distributions
and the final distribution to the Certificateholders from funds in the
Distribution Account as provided in Sections 6.01 and 10.01 herein based solely
on the report of the Securities Administrator.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee and the Securities Administrator
shall be determined solely by the express provisions of this Agreement,
neither the Trustee nor the Securities Administrator shall be liable except
for the performance of their respective duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee or the
Securities Administrator and, in the absence of bad faith on the part of
the Trustee or the Securities Administrator, respectively, the Trustee or
the Securities Administrator, respectively, may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee or the
Securities Administrator, respectively, and conforming to the requirements
of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer or
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Responsible Officers of the Trustee or an officer of the Securities
Administrator, respectively, unless it shall be proved that the Trustee or
the Securities Administrator, respectively, was negligent in ascertaining
the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator shall be
liable with respect to any action taken, suffered or omitted to be taken by
it in good faith in accordance with the directions of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less
than 25% of the Trust Fund, if such action or non-action relates to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee or the Securities Administrator, respectively, or
exercising any trust or other power conferred upon the Trustee or the
Securities Administrator, respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee's Corporate Trust Office shall have
actual knowledge thereof. In the absence of such notice, the Trustee may
conclusively assume there is no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by or in the name of Trustee unless it is
determined by a court of competent jurisdiction that the Trustee's gross
negligence or willful misconduct was the primary cause of such
insufficiency (except to the extent that the Trustee is obligor and has
defaulted thereon);
(vi) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Trustee or the Securities Administrator be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Trustee or the
Securities Administrator, respectively, has been advised of the likelihood
of such loss or damage and regardless of the form of action; and
(vii) None of the Securities Administrator, the Seller, the Master
Servicer, EMC or the Trustee shall be responsible for the acts or omissions
of the other, it being understood that this Agreement shall not be
construed to render them partners, joint venturers or agents of one
another.
(viii) Neither the Trustee nor the Securities Administrator shall be
required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it, and none of the
provisions contained in this Agreement shall in any event require the
Trustee or the Securities Administrator to perform, or be responsible for
the manner of performance of, any of the obligations of the Master Servicer
under the Agreement, except during such time, if any, as the Trustee shall
be the successor to, and be vested with the rights, duties, powers and
privileges of, the Master Servicer in accordance with the terms of this
Agreement.
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(e) All funds received by the Master Servicer and the Trustee and required
to be deposited in the Master Servicer Collection Account or Distribution
Account pursuant to this Agreement will be promptly so deposited by the Master
Servicer and the Trustee.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR. Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may rely and shall be
protected in acting or refraining from acting in reliance on any
resolution, certificate of a Seller, Master Servicer or Servicer,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult with
counsel and any advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection with respect to any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel:
(iii) Neither the Trustee nor the Securities Administrator shall be
under any obligation to exercise any of the trusts or powers vested in it
by this Agreement, other than its obligation to give notices pursuant to
this Agreement, or to institute, conduct or defend any litigation hereunder
or in relation hereto at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby. Nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event of
Default of which a Responsible Officer of the Trustee has actual knowledge
(which has not been cured or waived), subject to Section 8.02(b), to
exercise such of the rights and powers vested in it by this Agreement, and
to use the same degree of care and skill in their exercise, as a prudent
person would exercise under the circumstances in the conduct of his own
affairs;
(iv) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have
occurred, neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for any action taken, suffered or omitted
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(v) Neither the Trustee nor the Securities Administrator shall be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement,
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instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 25% of the Trust Fund and provided that the
payment within a reasonable time to the Trustee or the Securities
Administrator, as applicable, of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Trustee or the Securities Administrator, as applicable, reasonably
assured to the Trustee or the Securities Administrator, as applicable, by
the security afforded to it by the terms of this Agreement. The Trustee or
the Securities Administrator may require reasonable indemnity against such
expense or liability as a condition to taking any such action. The
reasonable expense of every such examination shall be paid by the
Certificateholders requesting the investigation;
(vi) The Trustee and the Securities Administrator may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or through Affiliates, agents or attorneys; provided, however,
that the Trustee may not appoint any agent to perform its custodial
functions with respect to the Mortgage Files or paying agent functions
under this Agreement without the express written consent of the Master
Servicer, which consent will not be unreasonably withheld. Neither the
Trustee nor the Securities Administrator shall be liable or responsible for
the misconduct or negligence of any of the Trustee's or the Securities
Administrator's agents or attorneys or a custodian or paying agent
appointed hereunder by the Trustee or the Securities Administrator with due
care and, when required, with the consent of the Master Servicer;
(vii) Should the Trustee or the Securities Administrator deem the
nature of any action required on its part, other than a payment or transfer
under Subsection 4.01(b) or Section 4.02, to be unclear, the Trustee or the
Securities Administrator, respectively, may require prior to such action
that it be provided by the Seller with reasonable further instructions;
(viii) The right of the Trustee or the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be accountable for other than its negligence or willful
misconduct in the performance of any such act;
(ix) Neither the Trustee nor the Securities Administrator shall be
required to give any bond or surety with respect to the execution of the
trust created hereby or the powers granted hereunder, except as provided in
Subsection 9.07; and
(x) Neither the Trustee nor the Securities Administrator shall have
any duty to conduct any affirmative investigation as to the occurrence of
any condition requiring the repurchase of any Mortgage Loan by the Mortgage
Loan Seller pursuant to the Mortgage Loan Purchase Agreement or this
Agreement, as applicable, or the eligibility of any Mortgage Loan for
purposes of this Agreement.
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Section 9.03 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR MORTGAGE LOANS. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Seller, and neither
the Trustee nor the Securities Administrator shall have any responsibility for
their correctness. Neither the Trustee nor the Securities Administrator makes
any representation as to the validity or sufficiency of the Certificates (other
than the signature and countersignature of the Trustee on the Certificates) or
of any Mortgage Loan except as expressly provided in Sections 2.02 and 2.05
hereof; provided, however, that the foregoing shall not relieve the Trustee of
the obligation to review the Mortgage Files pursuant to Sections 2.02 and 2.04.
The Trustee's signature and countersignature (or countersignature of its agent)
on the Certificates shall be solely in its capacity as Trustee and shall not
constitute the Certificates an obligation of the Trustee in any other capacity.
Neither the Trustee nor the Securities Administrator shall be accountable for
the use or application by the Seller of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Seller with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement
other than any continuation statements filed by the Trustee pursuant to Section
3.20.
Section 9.04 TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES. The
Trustee and the Securities Administrator in its individual capacity or in any
capacity other than as Trustee hereunder may become the owner or pledgee of any
Certificates with the same rights it would have if it were not Trustee or the
Securities Administrator, as applicable, and may otherwise deal with the parties
hereto.
Section 9.05 TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND EXPENSES.
The fees and expenses of the Trustee and the Securities Administrator shall be
paid in accordance with a side letter agreement between the Trustee and the
Master Servicer. In addition, the Trustee and the Securities Administrator will
be entitled to recover from the Master Servicer Collection Account pursuant to
Section 4.03 all reasonable out-of-pocket expenses, disbursements and advances
and the expenses of the Trustee and the Securities Administrator, respectively,
in connection with any Event of Default, any breach of this Agreement or any
claim or legal action (including any pending or threatened claim or legal
action) incurred or made by the Trustee or the Securities Administrator,
respectively, in the administration of the trusts hereunder (including the
reasonable compensation, expenses and disbursements of its counsel) except any
such expense, disbursement or advance as may arise from its negligence or
intentional misconduct or which is the responsibility of the
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Certificateholders. If funds in the Master Servicer Collection Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Seller. Such compensation and reimbursement
obligation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust.
Section 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES
ADMINISTRATOR. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
the Trustee, rated "BBB" or higher by Fitch with respect to their long-term
rating and rated "BBB" or higher by Standard & Poor's and "Baa2" or higher by
Moody's with respect to any outstanding long-term unsecured unsubordinated debt,
and, in the case of a successor Trustee or successor Securities Administrator
other than pursuant to Section 9.10, rated in one of the two highest long-term
debt categories of, or otherwise acceptable to, each of the Rating Agencies. If
the Trustee publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 9.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital and
surplus) as set forth in its most recent report of condition so published. In
case at any time the Trustee or the Securities Administrator shall cease to be
eligible in accordance with the provisions of this Section 9.06, the Trustee or
the Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.
Section 9.07 INSURANCE. The Trustee and the Securities Administrator, at
their own expense, shall at all times maintain and keep in full force and
effect: (i) fidelity insurance, (ii) theft of documents insurance and (iii)
forgery insurance (which may be collectively satisfied by a "Financial
Institution Bond" and/or a "Bankers' Blanket Bond"). All such insurance shall be
in amounts, with standard coverage and subject to deductibles, as are customary
for insurance typically maintained by banks or their affiliates which act as
custodians for investor-owned mortgage pools. A certificate of an officer of the
Trustee or the Securities Administrator as to the Trustee's or the Securities
Administrator's, respectively, compliance with this Section 9.07 shall be
furnished to any Certificateholder upon reasonable written request.
Section 9.08 RESIGNATION AND REMOVAL OF THE TRUSTEE AND SECURITIES
ADMINISTRATOR. (a) The Trustee and the Securities Administrator may at any time
resign and be discharged from the Trust hereby created by giving written notice
thereof to the Seller and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Seller shall promptly
appoint a successor Trustee or successor Securities Administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee or Securities Administrator,
as applicable, the successor Trustee or Securities Administrator, as applicable.
If no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator.
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(b) If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 9.06 and shall fail
to resign after written request therefor by the Seller or if at any time the
Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator, as applicable, or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Seller shall
promptly remove the Trustee, or shall be entitled to remove the Securities
Administrator, as applicable, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Trustee or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.
(c) The Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund may at any time remove the
Trustee or the Securities Administrator and appoint a successor Trustee or
Securities Administrator by written instrument or instruments, in quadruplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Seller, the Master Servicer,
the Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed. In the event that the
Trustee or Securities Administrator is removed by the Holders of Certificates in
accordance with this Section 9.08(c), the Holders of such Certificates shall be
responsible for paying any compensation payable to a successor Trustee or
successor Securities Administrator, in excess of the amount paid to the
predecessor Trustee or predecessor Securities Administrator, as applicable.
(d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 9.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.
Section 9.09 SUCCESSOR TRUSTEE AND SUCCESSOR SECURITIES ADMINISTRATOR. (a)
Any successor Trustee or Securities Administrator appointed as provided in
Section 9.08 shall execute, acknowledge and deliver to the Seller and to its
predecessor Trustee or Securities Administrator an instrument accepting such
appointment hereunder. The resignation or removal of the predecessor Trustee or
Securities Administrator shall then become effective and such successor Trustee
or Securities Administrator, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee or
Securities Administrator herein. The predecessor Trustee or Securities
Administrator shall after payment of its outstanding fees and expenses promptly
deliver to the successor Trustee or Securities Administrator, as applicable, all
assets and records of the Trust held by it hereunder, and the Seller and the
predecessor Trustee or Securities Administrator, as applicable, shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
Trustee or Securities Administrator, as applicable, all such rights, powers,
duties and obligations.
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(b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee or
Securities Administrator hereunder to all Certificateholders at their addresses
as shown in the Certificate Register and to the Rating Agencies. EMC shall pay
the cost of any mailing by the successor Trustee or Securities Administrator.
Section 9.10 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the Seller
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
and the Seller to act as co- trustee or co-trustees, jointly with the Trustee,
or separate trustee or separate trustees, of all or any part of the Trust, and
to vest in such Person or Persons, in such capacity, such title to the Trust, or
any part thereof, and, subject to the other provisions of this Section 9.11,
such powers, duties, obligations, rights and trusts as the Seller and the
Trustee may consider necessary or desirable.
(b) If the Seller shall not have joined in such appointment within 15 days
after the receipt by it of a written request so to do, the Trustee shall have
the power to make such appointment without the Seller.
(c) No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor Trustee under Section 9.06 hereunder and
no notice to Certificateholders of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 9.08 hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether
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as Trustee hereunder or as successor to the Master Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or co-trustee
may, at any time, request the Trustee, its agent or attorney-in-fact, with full
power and authority, to do any lawful act under or with respect to this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, 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 Securities
Administrator shall maintain or cause the maintenance of the books of each such
REMIC on the accrual method of accounting.
(b) The Securities Administrator shall prepare and file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Federal tax
information returns or elections required to be made hereunder with respect to
each of REMIC I 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 25% CPR with
respect to Loan Group 1 and 60% CPR with respect to Loan Group 2). The
Securities Administrator will apply for an Employee Identification Number from
the IRS under Form SS-4 or any other acceptable method for all tax entities. In
connection with the foregoing, the Securities Administrator shall timely prepare
and file, and the Trustee shall sign, IRS Form 8811, which shall provide the
name and address of the person who can be contacted to obtain information
required to be reported to the holders of regular interests
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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 December 31, 2002 and each calendar
year thereafter) in such manner as the Code or applicable Treasury regulations
may prescribe, and as described by the Securities Administrator. The Trustee
shall sign all tax information returns filed pursuant to this Section and any
other returns as may be required by the Code. The Holder of the Class R-I
Certificate is hereby designated as the "Tax Matters Person" (within the meaning
of Treas. Reg. 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
Securities Administrator 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 Securities Administrator 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 Securities Administrator does not own any such Residual
Certificate. In the event that the Code or applicable Treasury regulations
prohibit the Trustee from signing tax or information returns or other
statements, or the Securities Administrator from acting as agent for the Tax
Matters Person, the Trustee and the Securities Administrator shall take whatever
action that in its sole good faith judgment is necessary for the proper filing
of such information returns or for the provision of a tax matters person,
including designation of the Holder of a Residual Certificate to sign such
returns or act as tax matters person. Each Holder of a Residual Certificate
shall be bound by this Section.
(c) The Securities Administrator shall provide upon request and receipt of
reasonable compensation, such information as required in Section 860D(a)(6)(B)
of the Code to the Internal Revenue Service, to any Person purporting to
transfer a Residual Certificate to a Person other than a transferee permitted by
Section 5.05(b), and to any regulated investment company, real estate investment
trust, common trust fund, partnership, trust, estate, organization described in
Section 1381 of the Code, or nominee holding an interest in a pass-through
entity described in Section 860E(e)(6) of the Code, any record holder of which
is not a transferee permitted by Section 5.05(b) (or which is deemed by statute
to be an entity with a disqualified member).
(d) The Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, any state income tax returns required under
Applicable State Law with respect to each of REMIC I and REMIC II or the Trust
Fund.
(e) Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that the Trustee or the Securities
Administrator reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee or the Securities Administrator withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or the Securities
Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.
(f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Seller for any taxes and costs including, without limitation,
any reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Seller or the Master Servicer, as a result of a breach of the
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Trustee's covenants and the Securities Administrator's covenants, respectively,
set forth in this Section 9.12; provided, however, such liability and obligation
to indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.
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ARTICLE X
Termination
▇▇▇▇▇▇▇ ▇▇.▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ BY EMC 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, the Master Servicer and the
Securities Administrator created hereby, other than the obligation of the
Trustee to make payments to Certificateholders as hereinafter set forth shall
terminate upon:
(i) the repurchase by or at the direction of EMC or its designee of
all Mortgage Loans and all related REO Property remaining in the Trust at a
price (the "Termination Purchase Price") equal to the sum of (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, (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 EMC, (c) unreimbursed out-of
pocket costs of the Master Servicer, including unreimbursed servicing
advances and the principal portion of any unreimbursed Monthly Advances,
made on the Mortgage Loans prior to the exercise of such repurchase right
and (d) any unreimbursed costs and expenses of the Trustee and the
Securities Administrator payable pursuant to Section 9.05; 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.
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(c) The right of EMC or its designee to repurchase all the assets of the
Trust Fund described in Subsection 10.01(a)(i) above shall be exercisable only
if (i) the aggregate Stated Principal Balance of the Mortgage Loans at the time
of any such repurchase is less than 20% of the Cut-off Date Balance or (ii) the
Seller, based upon an Opinion of Counsel, has determined that the REMIC status
of 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) 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 assets of the Trust Fund described in
Subsection 10.01(a)(i) above .
(d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and the Rating Agencies, upon which the Certificateholders shall
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed not
earlier than the l5th day and not later than the 25th day of the month next
preceding the month of such final distribution, and shall specify (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of the Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Trustee therein specified.
(e) If the option of the Seller to repurchase or cause the repurchase of
all assets of the Trust Fund described in 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 Termination Purchase Price. 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 Certificate Principal Balance, 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 Senior Certificates in full, any such
deficiency will be allocated first, to the Subordinate Certificates, in inverse
order of their numerical designation, and then to the Senior Certificates. 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).
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(f) In the event that this Agreement is terminated by reason of the payment
or liquidation of all Mortgage Loans or the disposition of all property acquired
with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above, the
Master Servicer shall deliver to the Trustee for deposit in the Distribution
Account all distributable amounts remaining in the Master Servicer Collection
Account. Upon the presentation and surrender of the Certificates, the Trustee
shall distribute to the remaining Certificateholders, pursuant to the written
direction of the Securities Administrator and in accordance with their
respective interests, all distributable amounts remaining in the Distribution
Account. Upon deposit by the Master Servicer of such distributable amounts, and
following such final Distribution Date, the Trustee shall release promptly to
the Seller or its designee the Mortgage Files for the remaining Mortgage Loans,
and the Master Servicer Collection Account and the Distribution Account shall
terminate, subject to the Trustee's obligation to hold any amounts payable to
the Certificateholders in trust without interest pending final distributions
pursuant to this Subsection 10.01(g).
(g) If not all of the Certificateholders shall surrender their Certificates
for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.
Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS. (a) If the option of the
Seller to repurchase 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 addressed to the Trustee
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 and REMIC II 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
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(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 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, the Master Servicer, the Securities Administrator and
the Trustee, and the Servicing Agreements may be amended from time to time by
EMC, the Master Servicer and the Trustee, without notice to or the consent of
any of the Certificateholders, to cure any ambiguity, to correct or supplement
any provisions herein or therein that may be defective or inconsistent with any
other provisions herein or therein, to comply with any changes in the Code or to
make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with the provisions of this
Agreement; provided, however, that such action shall not, as evidenced by an
Opinion of Independent Counsel, addressed to the Trustee, adversely affect in
any material respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by EMC, the Master
Servicer, the Seller, the Securities Administrator and the Trustee, and the
Servicing Agreements may also be amended from time to time by the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Trust Fund or of the applicable Class or Classes, if such amendment affects only
such Class or Classes, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Certificateholders; provided, however,
that no such amendment shall (i) reduce in any manner the amount of, or delay
the timing of, payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) reduce the aforesaid percentage of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all Certificates then outstanding, or (iii) cause REMIC I or REMIC II
to fail to qualify as a REMIC for federal income tax purposes, as evidenced by
an Opinion of Independent Counsel addressed to the Trustee which shall be
provided to the Trustee other than at the Trustee's expense. Notwithstanding any
other provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.02(b), Certificates registered in the name
of or held for the benefit of the Seller, the Securities Administrator, the
Master Servicer or the Trustee or any Affiliate thereof shall be entitled to
vote their Fractional Undivided Interests with respect to matters affecting such
Certificates.
(c) Promptly after the execution of any such amendment, the Trustee shall
furnish a copy of such amendment or written notification of the substance of
such amendment to each Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it shall
not be necessary for the Certificateholders to approve the particular form of
such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining
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such consents and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel addressed to
the Trustee stating that the execution of such amendment is authorized or
permitted by this Agreement. The Trustee and the Securities Administrator may,
but shall not be obligated to, enter into any such amendment which affects the
Trustee's or the Securities Administrator's own respective rights, duties or
immunities under this Agreement.
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 Master
Servicer, the Securities Administrator 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
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priority or preference over any other such Certificateholder, or to enforce any
right under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Certificateholders. For the protection
and enforcement of the provisions of this Section 11.04, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 11.05 ACTS OF CERTIFICATEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Seller. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Seller,
if made in the manner provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his or her
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the individual executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Securities Administrator, the Seller, the Master Servicer nor any
successor to any such parties shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action of the holder of any Certificate shall bind every future holder
of the same Certificate and the holder of every Certificate issued upon the
registration of transfer or exchange thereof, if applicable, or in lieu thereof
with respect to anything done, omitted or suffered to be done by the Trustee,
the Securities Administrator, the Seller, the Master Servicer or any successor
to any such party in reliance thereon, whether or not notation of such action is
made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Securities Administrator, the Seller, the
Master Servicer or any Affiliate thereof shall be disregarded, except as
otherwise provided in Section 11.02(b) and except that, in determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which the
Trustee knows to be so owned shall be so disregarded. Certificates which have
been pledged in good faith to the Trustee, the Securities Administrator, the
Seller, the Master
-111-
Servicer or any Affiliate thereof may be regarded as outstanding if the pledgor
establishes to the satisfaction of the Trustee the pledgor's right to act with
respect to such Certificates and that the pledgor is not an Affiliate of the
Trustee, the Securities Administrator, the Seller or the Master Servicer, as the
case may be.
Section 11.06 GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5- 1401 OF THE GENERAL
OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE CHOICE OF
SUCH LAW AS THE GOVERNING LAW HEREUNDER) 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 Master Servicer or Securities Administrator, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or, in
the case of overnight deliveries, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇) (Attention: BALTA 2003-1), facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇, 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 Master Servicer, the Securities
Administrator or the Trustee under this Agreement shall be effective only upon
receipt. Any notice required or permitted to be mailed to a Certificateholder,
unless otherwise provided herein, shall be given by first-class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given when mailed, whether or
not the Certificateholder receives such notice.
Section 11.08 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
-112-
Section 11.09 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10 ARTICLE AND SECTION HEADINGS. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts each of which when so executed and delivered shall be an original
but all of which together shall constitute one and the same instrument.
Section 11.12 NOTICE TO RATING AGENCIES. The article and section headings
herein are for convenience of reference only, and shall not limited or otherwise
affect the meaning hereof. The Trustee shall promptly provide notice to each
Rating Agency with respect to each of the following of which a Responsible
Officer of the Trustee has actual knowledge:
1. Any material change or amendment to this Agreement or the Servicing
Agreements;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer, the Trustee or
the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection Account or
the Distribution Account.
-113-
IN WITNESS WHEREOF, the Seller, the Trustee, EMC, the Master Servicer and
the Securities Administrator have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year first
above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS INC., as Seller
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
JPMORGAN CHASE BANK, as Trustee
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Trust Officer
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Master
Servicer
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Securities
Administrator
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
EMC MORTGAGE CORPORATION
By: /S/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice 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: Executive Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of April, 2003 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, known to me to be a Vice President
of Structured Asset Mortgage Investments Inc., the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of April, 2003 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, known to me to be a Trust Officer
of JPMorgan Chase Bank, 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 30th day of April, 2003 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
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 30th day of April, 2003 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
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 30th day of April, 2003 before me, a notary public in and for said
State, personally appeared ▇▇▇ ▇▇▇▇▇▇▇▇, known to me to be an Executive Vice
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 CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON ALLOCABLE HERETO. ACCORDINGLY,
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE SELLER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
Certificate No. 1 Adjustable Pass-Through Rate
Class __-A Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
April 1, 2003 $__________
First Distribution Date: Initial Certificate Principal Balance of this
May 27, 2003 Certificate as of the Cut-off Date:
$__________
Master Servicer:
▇▇▇▇▇ Fargo Bank Minnesota, National
Association CUSIP: __________
Assumed Final Distribution Date:
May 25, 2033
BEAR ▇▇▇▇▇▇▇ ALT-A TRUST 2003-1
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-1
evidencing a fractional undivided interest in the distributions
allocable to the Class __-A Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties and sold by STRUCTURED ASSET MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that Cede &Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") primarily consisting of conventional adjustable rate mortgage
loans secured by first liens on one- to four- family residential properties
(collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to SAMI. ▇▇▇▇▇ Fargo Bank Minnesota,
A-1-2
National Association ("▇▇▇▇▇ Fargo") will act as master servicer of the Mortgage
Loans (the "Master Servicer," which term includes any successors thereto under
the Agreement referred to below). The Trust Fund was created pursuant to the
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "Agreement"), among SAMI, as seller (the "Seller"), ▇▇▇▇▇ Fargo Bank
Minnesota, National Association as master servicer and securities administrator,
EMC Mortgage Corporation and JPMorgan Chase Bank, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them in the Agreement. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Interest on this Certificate will accrue during the period
from and including the preceding Distribution Date (as hereinafter defined) (or
in the case of the first Distribution Date, from the Closing Date) to and
including the day prior to the current Distribution Date on the Certificate
Principal Balance hereof at a per annum rate equal to the Pass-Through Rate set
forth above. The Trustee will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the Business Day immediately preceding the related
Distribution Date so long as such Certificate remains in book-entry form (and
otherwise, the close of business on the last Business Day of the month
immediately 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 following the
latest scheduled maturity date of any Mortgage Loan and is not likely to be the
date on which the Certificate Principal Balance of this Class of Certificates
will be reduced to zero.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the
A-1-3
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 of the Servicing Agreements and the
modification of the rights and obligations of the Seller, the Master Servicer
and the Trustee and the rights of the Certificateholders under the Agreement
from time to time by EMC, the Seller, the Master Servicer, the Securities
Administrator and the Trustee, and (ii) the amendment thereof and of the
Servicing Agreements by the Master Servicer and the Trustee with the consent of
the Holders of Certificates, evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund (or in certain cases, Holders of
Certificates of affected Classes evidencing such percentage of the Fractional
Undivided Interests thereof). Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof and of the
Servicing Agreements in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and
A-1-4
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (B) the remittance of all funds due under
the Agreement, or (ii) the optional repurchase by the party named in the
Agreement of all the Mortgage Loans and other assets of the Trust Fund in
accordance with the terms of the Agreement. Such optional repurchase may be made
only on or after the Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than the percentage of the aggregate
Stated Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
A-1-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: April 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Trustee
By:_______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class [I-][II-]A Certificates referred to
in the within-mentioned Agreement.
JPMORGAN CHASE BANK,
Authorized signatory of JPMorgan
Chase Bank, not in its individual
capacity but solely as Trustee
By:_______________________________
Authorized Signatory
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Asset- Backed Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated: _____________________________________________
Signature by or on behalf of assignor
_________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-2
FORM OF CLASS M CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO
AS DESCRIBED IN THE AGREEMENT. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF
THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE
MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED
HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE SELLER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
EACH BENEFICIAL OWNER OF A CLASS M CERTIFICATE OR ANY
INTEREST THEREIN SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS
ACQUISITION OR HOLDING OF THAT CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I)
IT IS NOT A PLAN OR INVESTING WITH "PLAN ASSETS", (II) (1) IT IS AN INSURANCE
COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR
INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH TERM IS
DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND (3) THE
CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.
Certificate No.1 Adjustable Pass-Through Rate
Class M Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
April 1, 2003 $__________
First Distribution Date: Initial Certificate Principal Balance of this
May 27, 2003 Certificate as of the Cut-off Date:
$__________
Master Servicer:
▇▇▇▇▇ Fargo Bank Minnesota, National
Association CUSIP: __________
Assumed Final Distribution Date:
May 25, 2033
BEAR ▇▇▇▇▇▇▇ ALT-A TRUST 2003-1
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-1
evidencing a fractional undivided interest in the distributions
allocable to the Class M Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties and sold by STRUCTURED ASSET MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") primarily consisting of conventional adjustable rate mortgage
loans secured by first liens on one- to four- family residential properties
(collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments Inc. ("SAMI"). The Mortgage
A-2-2
Loans were sold by EMC Mortgage Corporation ("EMC") to SAMI. ▇▇▇▇▇ Fargo Bank
Minnesota, National Association ("▇▇▇▇▇ Fargo") will act as master servicer of
the Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement"), among SAMI, as seller (the "Seller"), ▇▇▇▇▇
Fargo Bank Minnesota, National Association as master servicer and securities
administrator, EMC Mortgage Corporation and JPMorgan Chase Bank, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the period
from and including the preceding Distribution Date (as hereinafter defined) (or
in the case of the first Distribution Date, from the Closing Date) to and
including the day prior to the current Distribution Date on the Certificate
Principal Balance hereof at a per annum rate equal to the Pass-Through Rate set
forth above. The Trustee will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the Business Day immediately preceding the related
Distribution Date so long as such Certificate remains in book-entry form (and
otherwise, the close of business on the last Business Day of the month
immediately 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 following the
latest scheduled maturity date of any Mortgage Loan and is not likely to be the
date on which the Certificate Principal Balance of this Class of Certificates
will be reduced to zero.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.
Each beneficial owner of a Class M Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of that Certificate or interest therein, that either (i) it is not a
Plan or investing with "Plan Assets", (ii)(1) it is an insurance company, (2)
the source of funds used to acquire or hold the Certificate or interest therein
is an "insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.
A-2-3
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided: (i) the amendment thereof and of the Servicing Agreements and the
modification of the rights and obligations of the Seller, the Master Servicer
and the Trustee and the rights of the Certificateholders under the Agreement
from time to time by EMC, the Seller, the Master Servicer, the Securities
Administrator and the Trustee, and (ii) the amendment thereof and of the
Servicing Agreements by the Master Servicer and the Trustee with the consent of
the Holders of Certificates, evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund (or in certain cases, Holders of
Certificates of affected Classes evidencing such percentage of the Fractional
Undivided Interests thereof). Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof and of the
Servicing Agreements in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
A-2-4
owner hereof for all purposes, and none of the Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in the Agreement
of the Mortgage Loans at the Cut-off Date. The exercise of such right will
effect the early retirement of the Certificates. In no event, however, will the
Trust Fund created by the Agreement continue beyond the expiration of 21 years
after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
A-2-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: April 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Trustee
By:_______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK,
Authorized signatory of JPMorgan
Chase Bank, not in its individual
capacity but solely as Trustee
By:_______________________________
Authorized Signatory
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Asset- Backed Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated: _____________________________________________
Signature by or on behalf of assignor
_________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-3
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION THAT IT IS NOT A PLAN OR
ACTING ON BEHALF OF A PLAN USING ASSETS OF A PLAN PURSUANT TO SECTION 5.07(A) OF
THE AGREEMENT OR AN OPINION OF COUNSEL AS PROVIDED IN SECTION 5.07(A) OF THE
AGREEMENT THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER LOCAL LAW,
WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER,
THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
MASTER SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED
STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN
INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO
TAX AND EXCEPT FOR ▇▇▇▇▇▇▇ MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(A)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER
SECTION 775(A) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION,
(2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
Certificate No.1 Percentage Interest: 100%
Class R-__
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
April 1, 2003 $0.00
First Distribution Date: Initial Certificate Principal Balance of this
May 27, 2003 Certificate as of the Cut-off Date:
$0.00
Master Servicer:
▇▇▇▇▇ Fargo Bank Minnesota, National
Association CUSIP: __________
Assumed Final Distribution Date:
May 25, 2033
BEAR ▇▇▇▇▇▇▇ ALT-A TRUST 2003-1
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-1
evidencing a fractional undivided interest in the distributions
allocable to the Class R-__ Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties and sold by STRUCTURED ASSET MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that ________________ is the registered owner
of the Fractional Undivided Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") primarily consisting of conventional adjustable rate
mortgage loans secured by first liens on one- to four- family residential
properties (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments Inc. ("SAMI"). The
Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to SAMI. ▇▇▇▇▇
Fargo Bank Minnesota, National Association ("▇▇▇▇▇ Fargo") will act as master
servicer of the Mortgage Loans (the "Master Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement"), among SAMI, as seller (the "Seller"),
▇▇▇▇▇ Fargo Bank Minnesota, National Association as master servicer and
securities administrator, EMC Mortgage Corporation and JPMorgan Chase Bank, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the 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 Seller, which purchaser may be
the Seller, or any affiliate of the Seller, on such terms and conditions as the
Seller may choose.
The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of the related Distribution Date, an amount equal to the
product of the Fractional Undivided Interest evidenced by this Certificate and
the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.
No transfer of this Class R-__ Certificate will be made unless
the Trustee has received either (i) an opinion of counsel for the benefit of the
Trustee, the Master Servicer and the Securities
Administrator and on which they may rely which is acceptable to and in form and
substance satisfactory to the Trustee that the purchase of the Certificate is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code (the "Code"), and will not subject the Trustee, the Master Servicer
or the Securities Administrator to any obligation in addition to those
undertaken in the Agreement or (ii) a representation letter, in the form as
described by the Agreement, stating that the transferee is not an employee
benefit or other plan subject to the prohibited transaction provisions of ERISA
or Section 4975 of the Code (a "Plan"), or any other person (including an
investment manager, a named fiduciary or a trustee of any Plan) acting, directly
or indirectly, on behalf of or purchasing any Certificate with "plan assets" of
any Plan.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided: (i) the amendment thereof and of the Servicing Agreements and the
modification of the rights and obligations of the Seller, the Master Servicer
and the Trustee and the rights of the Certificateholders under the Agreement
from time to time by EMC, the Seller, the Master Servicer, the Securities
Administrator and the Trustee, and (ii) the amendment thereof and of the
Servicing Agreements by the Master Servicer and the Trustee with the consent of
the Holders of Certificates, evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund (or in certain cases, Holders of
Certificates of affected Classes evidencing such percentage of the Fractional
Undivided Interests thereof). Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof and of the
Servicing Agreements in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in the Agreement
of the Mortgage Loans at the Cut-off Date. The exercise of such right will
effect the early retirement of the Certificates. In no event, however, will the
Trust Fund created by the Agreement continue beyond the expiration of 21 years
after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: April 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Trustee
By:_______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R-[I][II] Certificates referred to in
the within-mentioned Agreement.
JPMORGAN CHASE BANK,
Authorized signatory of JPMorgan
Chase Bank, not in its individual
capacity but solely as Trustee
By:_______________________________
Authorized Signatory
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Asset- Backed Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated: _____________________________________________
Signature by or on behalf of assignor
_________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-4
FORM OF CLASS B-IO CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES AND THE CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT
(AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND 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 ("PTCE") 84-14, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇
95-60 OR PTCE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY
DUTIES ON THE PART OF THE SELLER, THE SECURITIES ADMINISTRATOR, THE MASTER
SERVICER OR THE TRUSTEE, 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 OR UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE
WITH AN OPINION OF COUNSEL FOR THE BENEFIT OF THE TRUSTEE, MASTER SERVICER AND
THE SECURITIES ADMINISTRATOR AND WHICH THEY MAY RELY WHICH IS SATISFACTORY TO
THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER LOCAL
LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER,
THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No.1 Variable Pass-Through Rate
Class B-IO Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Notional Amount of this
Cut-off Date: Certificate as of the Cut-off Date:
April 1, 2003 $__________
First Distribution Date: Initial Notional Amount of this Certificate as
May 27, 2003 of the Cut-off Date:
$__________
Master Servicer:
▇▇▇▇▇ Fargo Bank Minnesota, National
Association
Assumed Final Distribution Date:
May 25, 2033 CUSIP: __________
BEAR ▇▇▇▇▇▇▇ ALT-A TRUST 2003-1
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-1
evidencing a fractional undivided interest in the distributions
allocable to the Class B-IO Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties and sold by STRUCTURED ASSET MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that ______________________ is the registered
owner of the Fractional Undivided Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") primarily consisting of conventional adjustable rate
mortgage loans secured by first liens on one- to four- family residential
properties (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to SAMI. ▇▇▇▇▇ Fargo Bank
Minnesota, National Association ("▇▇▇▇▇ Fargo") will act as master servicer of
the Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement"), among SAMI, as seller (the "Seller"), ▇▇▇▇▇
Fargo Bank Minnesota, National Association as master servicer and securities
administrator, EMC Mortgage Corporation and JPMorgan Chase Bank, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the period
from and including the preceding Distribution Date (as hereinafter defined) (or
in the case of the first Distribution Date, from the Closing Date) to and
including the day prior to the current Distribution Date on the Notional Amount
hereof at a per annum rate equal to the Pass-Through Rate as set forth in the
Agreement. The Trustee will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of the related Distribution Date, an amount equal to the
product of the Fractional Undivided Interest evidenced by this Certificate and
the amount of interest required to be distributed to the Holders of Certificates
of the same Class as this Certificate. The Assumed Final Distribution Date is
the Distribution Date in the month following the latest scheduled maturity date
of any Mortgage Loan and is not likely to be the date on which the Notional
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
Class B-IO Certificates have no Certificate Principal Balance. The Initial
Notional Amount of this Certificate is set forth above.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1 or F-2, as
applicable, and (ii) in all other cases, an Opinion of Counsel satisfactory to
it that such transfer may be made without such registration or qualification
(which Opinion of Counsel shall not
be an expense of the Trust Fund or of the Seller, the Trustee, the Securities
Administrator or the Master Servicer in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. Neither the Seller nor
the Trustee is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Securities Administrator, the Seller, the Seller and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
No transfer of this Class B-IO Certificate will be made unless
the Trustee and the Securities Administrator have received either (i) an opinion
of counsel acceptable to and in form and substance satisfactory to the Trustee,
the Securities Administrator and the Master Servicer with respect to the
permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code
(the "Code") and stating, among other things, that the transferee's acquisition
of a Class B-IO Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan, or (iii) a
certification that the proposed transfer and holding of a certificate and the
servicing, management and 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 ("PTCE") ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇
95-60 or PTCE 96-23 and (ii) will not give rise to any additional fiduciary
duties on the part of the Seller, the Securities Administrator, the Master
Servicer or the Trustee, 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 or unless the transferee provides the Trustee
with an opinion of counsel for the benefit of the Trustee, Master Servicer and
the Securities Administrator and which they may rely which is satisfactory to
the Trustee that the purchase of this certificate is permissible under local
law, will not constitute or result in a non-exempt prohibited transaction under
section 406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or section 4975 of the Code and will not subject the Master Servicer,
the Trustee or the Securities Administrator to any obligation or liability in
addition to those undertaken in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided: (i) the amendment thereof and of the Servicing Agreements and the
modification of the rights and obligations of the Seller, the Master Servicer
and the Trustee and the rights of the Certificateholders under the Agreement
from time to time by EMC, the Seller, the Master Servicer, the Securities
Administrator and the Trustee, and (ii) the amendment thereof and of the
Servicing Agreements by the Master Servicer and the Trustee with the consent of
the Holders of Certificates, evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund (or in certain cases, Holders of
Certificates of affected Classes evidencing such percentage of the Fractional
Undivided Interests thereof). Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof and of the
Servicing Agreements in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (B) the remittance of all funds due under
the Agreement, or (ii) the optional repurchase by the party named in the
Agreement of all the Mortgage Loans and other assets of the Trust Fund in
accordance with the terms of the Agreement. Such optional repurchase may be made
only on or after the Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than the percentage of the aggregate
Stated Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: April 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Trustee
By:_______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-IO Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK,
Authorized signatory of JPMorgan
Chase Bank, not in its individual
capacity but solely as Trustee
By:_______________________________
Authorized Signatory
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Asset- Backed Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated: _____________________________________________
Signature by or on behalf of assignor
_________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-5
FORM OF CLASS XP CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. 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 HOLDING OF A CERTIFICATE AND THE SERVICING,
MANAGEMENT AND 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 ("PTCE") 84-14, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ 95-60 OR PTCE
96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY DUTIES ON THE PART
OF THE SELLER, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE,
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
OR UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL FOR THE
BENEFIT OF THE TRUSTEE, MASTER SERVICER AND THE SECURITIES ADMINISTRATOR AND
WHICH THEY MAY RELY WHICH IS SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF
THIS CERTIFICATE IS PERMISSIBLE UNDER LOCAL LAW, WILL NOT CONSTITUTE OR RESULT
IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE SECURITIES
ADMINISTRATOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN
THE AGREEMENT.
Certificate No.1
Class XP Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
April 1, 2003 $____________
First Distribution Date: Initial Certificate Principal Balance of this
May 27, 2003 Certificate as of the Cut-off Date:
$____________
Master Servicer:
▇▇▇▇▇ Fargo Bank Minnesota, National
Association
Assumed Final Distribution Date:
May 25, 2033
BEAR ▇▇▇▇▇▇▇ ALT-A TRUST 2003-1
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-1
evidencing a fractional undivided interest in the distributions
allocable to the Class XP Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties and sold by STRUCTURED ASSET MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that ________________ is the registered owner
of the Fractional Undivided Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") primarily consisting of conventional adjustable rate
mortgage loans secured by first liens on one- to four- family residential
properties (collectively,
A-5-2
the "Mortgage Loans") sold by Structured Asset Mortgage Investments Inc.
("SAMI"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to
SAMI. ▇▇▇▇▇ Fargo Bank Minnesota, National Association ("▇▇▇▇▇ Fargo") will act
as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among SAMI, as seller
(the "Seller"), ▇▇▇▇▇ Fargo Bank Minnesota, National Association as master
servicer and securities administrator, EMC Mortgage Corporation and JPMorgan
Chase Bank, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
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 of the month immediately
preceding the month of the related Distribution Date, an amount equal to the
product of the Fractional Undivided Interest evidenced by this Certificate and
the amount required to be distributed to the Holders of Certificates of the same
Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan and is not likely to be the date on which the Certificate
Principal Balance of this Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1 or F-2, as
applicable, and (ii) in all other cases, an Opinion of Counsel satisfactory to
it that such transfer may be made without such registration or qualification
(which Opinion of Counsel shall not be an expense of the Trust Fund or of the
Seller, the Trustee, the Securities
A-5-3
Administrator or the Master Servicer in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. Neither the Seller nor
the Trustee is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Securities Administrator, the Seller, the Seller and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
No transfer of this Class XP Certificate will be made unless
the Trustee and the Securities Administrator have received either (i) an opinion
of counsel acceptable to and in form and substance satisfactory to the Trustee,
the Securities Administrator and the Master Servicer with respect to the
permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code
(the "Code") and stating, among other things, that the transferee's acquisition
of a Class XP Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan, or (iii) a
certification that the proposed transfer and holding of a certificate and the
servicing, management and 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 ("PTCE") ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇
95-60 or PTCE 96-23 and (ii) will not give rise to any additional fiduciary
duties on the part of the Seller, the Securities Administrator, the Master
Servicer or the Trustee, 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 or unless the transferee provides the Trustee
with an opinion of counsel for the benefit of the Trustee, Master Servicer and
the Securities Administrator and which they may rely which is satisfactory to
the Trustee that the purchase of this certificate is permissible under local
law, will not constitute or result in a non-exempt prohibited transaction under
section 406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or section 4975 of the Code and will not subject the Master Servicer,
the Trustee or the Securities Administrator to any obligation or liability in
addition to those undertaken in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
A-5-4
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided: (i) the amendment thereof and of the Servicing Agreements and the
modification of the rights and obligations of the Seller, the Master Servicer
and the Trustee and the rights of the Certificateholders under the Agreement
from time to time by EMC, the Seller, the Master Servicer, the Securities
Administrator and the Trustee, and (ii) the amendment thereof and of the
Servicing Agreements by the Master Servicer and the Trustee with the consent of
the Holders of Certificates, evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund (or in certain cases, Holders of
Certificates of affected Classes evidencing such percentage of the Fractional
Undivided Interests thereof). Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof and of the
Servicing Agreements in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund
A-5-5
in accordance with the terms of the Agreement. Such optional repurchase may be
made only on or after the Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than the percentage of the
aggregate Stated Principal Balance specified in the Agreement of the Mortgage
Loans at the Cut-off Date. The exercise of such right will effect the early
retirement of the Certificates. In no event, however, will the Trust Fund
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
A-5-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: April 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Trustee
By:_______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class XP Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK,
Authorized signatory of JPMorgan
Chase Bank, not in its individual
capacity but solely as Trustee
By:_______________________________
Authorized Signatory
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Asset- Backed Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated: _____________________________________________
Signature by or on behalf of assignor
_________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT B
MORTGAGE LOAN SCHEDULE
The Preliminary and Final Mortgage Loan Schedules shall set
forth the following information with respect to each Mortgage Loan:
(a) the loan number;
(b) the Mortgagor's name;
(c) the street address (including city, state and zip code) of the
Mortgaged Property;
(d) the property type;
(e) the Mortgage Rate;
(f) the Servicing Rate;
(g) the Net Rate;
(h) the original term;
(i) the maturity date;
(j) the stated remaining term to maturity;
(k) the original principal balance;
(1) the first payment date;
(m) the principal and interest payment in effect as of the Cut-off Date;
(n) the unpaid principal balance as of the Cut-off Date;
(o) the Loan-to-Value Ratio at origination;
(p) paid-through date;
(q) the insurer of any Primary Mortgage Insurance Policy;
(r) the Gross Margin, if applicable;
(s) the Maximum Lifetime Mortgage Rate, if applicable;
(t) the Minimum Lifetime Mortgage Rate, if applicable;
B-1
(u) the Periodic Rate Cap, if applicable;
(v) the number of days delinquent, if any;
(w) which Mortgage Loans adjust after an initial fixed-rate period of two,
three, five, seven or ten years;
(x) The Loan Group; and
(y) The Prepayment Charge Loans.
Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
B-2
EXHIBIT C
[RESERVED]
C-1-1
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
RE: Pooling and Servicing Agreement, dated as of April 1, 2003 among
Structured Asset Mortgage Investments Inc., as seller, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association as master servicer and securities
administrator, EMC Mortgage Corporation and JPMorgan Chase Bank, as
trustee, issuing Bear ▇▇▇▇▇▇▇ Alt-A Trust Series 2003-1, Mortgage Pass-
Through Certificates, Series 2003-1
-----------------------------------------------------------------------
In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.
Mortgage Loan Number:
--------------------
Mortgagor Name, Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check one):
-------------------------------------------
_____ 1. Mortgage Paid in Full and proceeds have been
deposited into the Custodial Account
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation
_____ 5. Nonliquidation Reason:____________________
_____ 6. California Mortgage Loan paid in full
By:____________________________
(authorized signer)
Issuer:________________________
Address:_______________________
Date:__________________________
D-1
EXHIBIT E
FORM OF TRANSFER AFFIDAVIT
Affidavit pursuant to Section 860E(e)(4)
of the Internal Revenue Code of 1986, as
amended, and for other purposes
STATE OF )
)ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of _____] [the United States], on behalf of which
he makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Bear ▇▇▇▇▇▇▇ Alt-A Trust 2003-1
Mortgage Pass-Through Certificates, Series 2003-1, Class R-__ Certificates (the
"Residual Certificates") for the account of a disqualified organization; (iii)
it consents to any amendment of the Pooling and Servicing Agreement that shall
be deemed necessary by Structured Asset Mortgage Investments Inc. (upon advice
of counsel) to constitute a reasonable arrangement to ensure that the Residual
Certificates will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Residual Certificates unless
(a) it has received from the transferee an affidavit in substantially the same
form as this affidavit containing these same four representations and (b) as of
the time of the transfer, it does not have actual knowledge that such affidavit
is false.
3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation 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-2
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.
8. That the Investor either: (i) is not acquiring the 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 with assets of a plan or] (ii) has provided
the Trustee with an opinion of counsel for the benefit of the Trustee, the
Master Servicer and the Securities Administrator and on which they may rely,
which is satisfactory to the Trustee and which opinion will not be at the
expense of the Trustee, the Master Servicer or the Securities Administrator,
that the purchase of such Certificates by or on behalf of the such Plan is
permissible under applicable law, will not constitute or result in a nonexempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Trustee, the Master Servicer or the Securities Administrator to any
obligation in addition to those undertaken in the Agreement.
9. The Investor understands that the Residual Certificate bears, and
will continue to bear, a legend to substantiate the following effect:
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFERREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 5.07(a) OF THE AGREEMENT OR AN OPINION OF COUNSEL AS PROVIDED
IN SECTION 5.07(a) THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE
UNDER LOCAL LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE
SECURITIES ADMINITRATOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO
THOSE UNDERTAKEN IN THE AGREEMENT.
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 (NON-RULE 144A)
______________,200___
Structured Asset Mortgage Investments Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
JPMorgan Chase Bank
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Bear ▇▇▇▇▇▇▇ Alt-A Trust 2003-1
Re: Bear ▇▇▇▇▇▇▇ Alt-A Trust 2003-1
Mortgage Pass-Through Certificates, Series 2003-1, Class__
----------------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
______________ (the "Seller") $_________ Initial Certificate Principal Balance
of Mortgage Pass-Through Certificates, Series 2003-1, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of April 1, 2003 among Structured
Asset Mortgage Investments Inc., as seller (the "Seller"), EMC Mortgage
Corporation, ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as master
servicer and securities administrator, and JPMorgan Chase Bank, as trustee (the
"Trustee"). All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Seller and the
Trustee that:
1. The Purchaser understands that (a) the
Certificates have not been and will not be registered or
qualified under the Securities Act of 1933, as amended (the
"Act") or any state securities law, (b) the Seller is not
required to so register or qualify the Certificates, (c) the
Certificates may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities
law, or if an exemption from such registration and
qualification is available, (d) the Pooling and Servicing
Agreement contains restrictions regarding the transfer of the
Certificates and (e) the Certificates will bear a legend to
the foregoing effect.
2. The Purchaser is acquiring the Certificates for
its own account for investment only and not with a view to or
for sale in connection with any distribution thereof in any
manner that would violate the Act or any applicable state
securities laws.
F-1-1
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such
matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) able to bear the economic
risks of such an investment and (c) an "accredited investor"
within the meaning of Rule 501 (a) promulgated pursuant to the
Act.
4. The Purchaser has been furnished with, and has had
an opportunity to review (a) a copy of the Pooling and
Servicing Agreement and (b) such other information concerning
the Certificates, the Mortgage Loans and the Seller as has
been requested by the Purchaser from the Seller or the Seller
and is relevant to the Purchaser's decision to purchase the
Certificates. The Purchaser has had any questions arising from
such review answered by the Seller or the Seller to the
satisfaction of the Purchaser.
5. The Purchaser has not and will not nor has it
authorized or will it authorize any person to (a) offer,
pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicit any
offer to buy or to accept a pledge, disposition of other
transfer of any Certificate, any interest in any Certificate
or any other similar security from any person in any manner,
(c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other
similar security with any person in any manner, (d) make any
general solicitation by means of general advertising or in any
other manner or (e) take any other action, that (as to any of
(a) through (e) above) would constitute a distribution of any
Certificate under the Act, that would render the disposition
of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or
qualification pursuant thereto. The Purchaser will not sell or
otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing
Agreement.
Very truly yours,
_________________________________
[PURCHASER]
By:______________________________
Name:____________________________
Title:___________________________
F-1-2
EXHIBIT F-2
FORM OF RULE 144A INVESTMENT LETTER
[Date]
[SELLER]
Structured Asset Mortgage Investments Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
JPMorgan Chase Bank
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Bear ▇▇▇▇▇▇▇ Alt-A Trust 2003-1
Re: Bear ▇▇▇▇▇▇▇ Alt-A Trust 2003-1
Mortgage Pass-Through Certificates, Series 2003-1, Class__
----------------------------------------------------------
Dear Ladies and Gentlemen:
In connection with our purchase of Certificates, we confirm that:
(i) we understand that the 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 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 Certificates has been made available to us;
(iii) we are able to bear the economic risk of investment
in 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 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 Certificates;
F-2-1
(v) we agree the Certificates must be held indefinitely
by us (and may not be sold, pledged, hypothecated or
in any way disposed of) unless subsequently
registered under the Act and any applicable state
securities or "Blue Sky" laws or an exemption from
the registration requirements of the Act and any
applicable state securities or "Blue Sky" laws is
available;
(vi) we agree that in the event that at some future time
we wish to dispose of or exchange any of the
Certificates (such disposition or exchange not being
currently foreseen or contemplated), we will not
transfer or exchange any of the 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 Certificate is not registered
under the Act (as to which we acknowledge you have no
obligation), the 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 ▇▇▇▇▇ Fargo Bank Minnesota, National
Association (the "Trustee") so requests, a
satisfactory Opinion of Counsel is furnished to such
effect, which Opinion of Counsel shall be an expense
of the transferor or the transferee;
(vii) we agree to be bound by all of the terms (including
those relating to restrictions on transfer) of the
Pooling and Servicing, pursuant to which the Trust
was formed; we have reviewed carefully and understand
the terms of the Pooling and Servicing Agreement;
(viii) [for the Certificates other than the Class A
Certificates: we either: (i) are not acquiring the
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 with assets of a plan
or] (ii) [for Classes XP and B-IO Certificates only:
are providing a representation or certification to
the effect that the proposed transfer and holding of
a Certificate and the servicing, management and
operation of the Trust and its assets: (I) will not
result in
F-2-2
any prohibited transaction which is not covered under
an individual or class prohibited transaction
exemption, including, but not limited to, Prohibited
Transaction Exemption ("PTCE") ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇,
▇▇▇▇ ▇▇-▇, ▇▇▇▇ 95-60, PTCE 96-23 or Section 401(c)
of ERISA and the regulations promulgated thereunder
and (II) will not subject the Seller, the Master
Servicer, the Securities Administrator or the Trustee
to any obligation in addition to those undertaken in
the Agreement] or [for Class B-IO Certificates and
Class XP Certificates only: (iii) have provided the
Trustee with an opinion of counsel for the benefit of
the Trustee, the Master Servicer and the Securities
Administrator and on which they may rely, which is
satisfactory to the Trustee and which opinion will
not be at the expense of the Trustee, the Master
Servicer or the Securities Administrator, that the
purchase of such Certificates by or on behalf of the
such Plan is permissible under applicable law, will
not constitute or result in a nonexempt prohibited
transaction under ERISA or Section 4975 of the Code
and will not subject the Trustee, the Master Servicer
or the Securities Administrator to any obligation in
addition to those undertaken in the Agreement] or
[for Class M Certificates only: (ii)(1)are an
insurance company, (2) the source of funds used to
acquire or hold the certificate or interest therein
is an "insurance company general account," as such
term is defined in Prohibited Transaction Class
Exemption ("PTCE") 95-60, and (3) the conditions in
Sections I and III of PTCE 95-60 have been
satisfied.]
(ix) We understand that each of the Class ___ Certificates
bears, and will continue to bear, a legend to
substantiate the following effect: "THIS CERTIFICATE
HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER
HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A") TO A PERSON THAT THE HOLDER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT
OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN
CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED
INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE
ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS
COME WITHIN SUCH
F-2-3
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED
DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, [CLASS B-IO AND XP CERTIFICATES
ONLY:] OR BY A PERSON USING PLAN ASSETS UNLESS THE
PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND
THE SERVICING, MANAGEMENT AND 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
("PTCE") ▇▇-▇▇, ▇▇▇▇ ▇▇- ▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ 95-60,
PTCE 96-23 OR SECTION 401(C) OF ERISA AND THE
REGULATIONS TO BE PROMULGATED THEREUNDER AND (II)
WILL NOT SUBJECT THE SELLER, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR OR THE TRUSTEE TO AN
OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT, WHICH WILL BE DEEMED REPRESENTED BY AN
OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION
TO SUCH EFFECT BY OR ON BEHALF OF A HOLDER OF A
PRIVATE CERTIFICATE."
[FOR CLASS M CERTIFICATES ONLY: EACH BENEFICIAL OWNER
OF A CLASS M CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS
ACQUISITION OR HOLDING OF THAT CERTIFICATE OR
INTEREST THEREIN, THAT EITHER (I) IT IS NOT A PLAN OR
INVESTING WITH "PLAN ASSETS", (II) (1) IT IS AN
INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO
ACQUIRE OR HOLD THE CERTIFICATE OR INTEREST THEREIN
IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH
TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS
EXEMPTION ("PTCE") 95-60,
F-2-4
AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE
95-60 HAVE BEEN SATISFIED.
[FOR CLASS R CERTIFICATES ONLY : NO TRANSFER OF THIS
CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFERREE PROVIDES EITHER A CERTIFICATION PURSUANT
TO SECTION 5.07(a) OF THE AGREEMENT OR AN OPINION OF
COUNSEL AS PROVIDED IN SECTION 5.07(a) THAT THE
PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER
LOCAL LAW, WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE
TRUSTEE OR THE SECURITIES ADMINITRATOR TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT.
"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 April 1, 2003, between
Structured Asset Mortgage Investments Inc., as seller, EMC Mortgage Corporation,
▇▇▇▇▇ Fargo Bank Minnesota, National Association, as master servicer and
securities administrator, and JPMorgan Chase Bank, as Trustee (the "Pooling and
Servicing Agreement').
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):___________________
F-2-5
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:__________________________
Name:________________________
Title:_______________________
F-2-6
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-2-7
EXHIBIT G
FORM OF CUSTODIAL AGREEMENT
---------------------------
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement'), dated as of April 30, 2003, by and among JPMORGAN CHASE
BANK, as trustee (including its successors under the Pooling and Servicing
Agreement defined below, the "Trustee"), STRUCTURED ASSET MORTGAGE INVESTMENTS
INC., as company (together with any successor in interest, the "Company"), ▇▇▇▇▇
FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as master servicer and securities
administrator (together with any successor in interest or successor under the
Pooling and Servicing Agreement referred to below, the "Master Servicer") and
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as custodian (together with
any successor in interest or any successor appointed hereunder, the
"Custodian").
WITNESSETH THAT:
---------------
WHEREAS, the Company, the Master Servicer and the Trustee have
entered into a Pooling and Servicing Agreement, dated as of April 1, 2003,
relating to the issuance of Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through
Certificates, Series 2003-1 (as in effect on the date of this agreement, the
"Original Pooling and Servicing Agreement," and as amended and supplemented from
time to time, the "Pooling and Servicing Agreement'); and
WHEREAS, the Custodian has agreed to act as agent for the
Trustee for the purposes of receiving and holding certain documents and other
instruments delivered by the Company or the Master Servicer under the Pooling
and Servicing Agreement and the Servicers under their respective Servicing
Agreements, all upon the terms and conditions and subject to the limitations
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the Trustee, the Company,
the Master Servicer and the Custodian hereby agree as follows:
ARTICLE I.
DEFINITIONS
Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned in the Original Pooling and Servicing
Agreement, unless otherwise required by the context herein.
ARTICLE II.
CUSTODY OF MORTGAGE DOCUMENTS
Section 2.1. CUSTODIAN TO ACT AS AGENT: ACCEPTANCE OF MORTGAGE
FILES. The Custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a) receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule attached hereto (the
"Mortgage Files") and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present and
future Certificateholders.
Section 2.2. RECORDATION OF ASSIGNMENTS. If any Mortgage File
includes one or more assignments of Mortgage to the Trustee in a state which is
specifically excluded from the Opinion of Counsel delivered by the Seller to the
Trustee (with a copy to the Custodian) pursuant to the provisions of Section
2.01 of the Pooling and Servicing Agreement, each such assignment shall be
delivered by the Custodian to the Company for the purpose of recording it in the
appropriate public office for real property records, and the Company, at no
expense to the Custodian, shall promptly cause to be recorded in the appropriate
public office for real property records each such assignment of Mortgage and,
upon receipt thereof from such public office, shall return each such assignment
of Mortgage to the Custodian.
Section 2.3. REVIEW OF MORTGAGE FILES.
(a) On or prior to the Closing Date, in accordance with
Section 2.02 of the Pooling and Servicing Agreement, the Custodian shall deliver
to the Trustee an Initial Certification in the form annexed hereto as Exhibit
One evidencing receipt (subject to any exceptions noted therein) of a Mortgage
File for each of the Mortgage Loans listed on the Schedule attached hereto (the
"Mortgage Loan Schedule").
(b) Within 90 days of the Closing Date, the Custodian agrees,
for the benefit of Certificateholders, to review, in accordance with the
provisions of Section 2.02 of the Pooling and Servicing Agreement, each such
document, and shall deliver to the Seller and the Trustee an Interim
Certification in the form annexed hereto as Exhibit Two to the effect that all
such documents have been executed and received and that such documents relate to
the Mortgage Loans identified on the Mortgage Loan Schedule, except for any
exceptions listed on Schedule A attached to such Interim Certification. The
Custodian shall be under no duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable, or appropriate for the represented purpose or
that they have actually been recorded or that they are other than what they
purport to be on their face.
(c) Not later than 180 days after the Closing Date, the
Custodian shall review the Mortgage Files as provided in Section 2.02 of the
Pooling and Servicing Agreement and deliver to the Seller and the Trustee a
Final Certification in the form annexed hereto as Exhibit Three evidencing the
completeness of the Mortgage Files.
(d) In reviewing the Mortgage Files as provided herein and in
the Pooling and Servicing Agreement, the Custodian shall make no representation
as to and shall not be responsible
G-2
to verify (i) the validity, legality, enforceability, due authorization,
recordability, sufficiency or genuineness of any of the documents included in
any Mortgage File or (ii) the collectibility, insurability, effectiveness or
suitability of any of the documents in any Mortgage File.
Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans missing from the Mortgage Files.
Section 2.4. NOTIFICATION OF BREACHES OF REPRESENTATIONS AND
WARRANTIES. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Company as set forth in the Pooling and Servicing Agreement
with respect to a Mortgage Loan relating to a Mortgage File, the Custodian shall
give prompt written notice to the Company, the related Servicer and the Trustee.
Section 2.5. CUSTODIAN TO COOPERATE: RELEASE OF MORTGAGE
FILES. Upon receipt of written notice from the Trustee that the Mortgage Loan
Seller has repurchased a Mortgage Loan pursuant to Article II of the Pooling and
Servicing Agreement, and that the purchase price therefore has been deposited in
the Master Servicer Collection Account or the Distribution Account, then the
Custodian agrees to promptly release to the Mortgage Loan Seller the related
Mortgage File.
Upon the Custodian's receipt of a request for release (a
"Request for Release") substantially in the form of Exhibit D to the Pooling and
Servicing Agreement signed by a Servicing Officer of the related Servicer
stating that it has received payment in full of a Mortgage Loan or that payment
in full will be escrowed in a manner customary for such purposes, the Custodian
agrees promptly to release to the related Servicer the related Mortgage File.
The Company shall deliver to the Custodian and the Custodian agrees to accept
the Mortgage Note and other documents constituting the Mortgage File with
respect to any Substitute Mortgage Loan.
From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy, the related Servicer shall deliver to the
Custodian a Request for Release signed by a Servicing Officer requesting that
possession of all of the Mortgage File be released to the related Servicer and
certifying as to the reason for such release and that such release will not
invalidate any insurance coverage provided in respect of the Mortgage Loan under
any of the Insurance Policies. Upon receipt of the foregoing, the Custodian
shall deliver the Mortgage File to the related Servicer. The related Servicer
shall cause each Mortgage File or any document therein so released to be
returned to the Custodian when the need therefore by the related Servicer no
longer exists, unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Master Servicer Collection Account or the Distribution Account or (ii) the
Mortgage File or such document has been delivered to an attorney, or to a public
trustee or other public official as required by law, for purposes of initiating
or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property either judicially or non-judicially, and the related Servicer
has delivered to the Custodian a certificate of a Servicing Officer certifying
as to the name and address of the Person to which such Mortgage File or such
document was delivered and the purpose or purposes of such delivery.
G-3
At any time that a Servicer is required to deliver to the
Custodian a Request for Release, the Servicer shall deliver two copies of the
Request for Release if delivered in hard copy or the Servicer may furnish such
Request for Release electronically to the Custodian, in which event the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release. In connection with any Request for Release of a Mortgage
File because of a repurchase of a Mortgage Loan, such Request for Release shall
be accompanied by an assignment of mortgage, without recourse, representation or
warranty from the Trustee to the Mortgage Loan Seller and the related Mortgage
Note shall be endorsed without recourse, representation or warranty by the
Trustee and be returned to the Mortgage Loan Seller. In connection with any
Request for Release of a Mortgage File because of the payment in full of a
Mortgage Loan, such Request for Release shall be accompanied by a certificate of
satisfaction or other similar instrument to be executed by or on behalf of the
Trustee and returned to the related Servicer.
Section 2.6. ASSUMPTION AGREEMENTS. In the event that any
assumption agreement, substitution of liability agreement or sale of servicing
agreement is entered into with respect to any Mortgage Loan subject to this
Agreement in accordance with the terms and provisions of the Pooling and
Servicing Agreement, the Master Servicer, to the extent provided in the related
Servicing Agreement, shall cause the related Servicer to notify the Custodian
that such assumption or substitution agreement has been completed by forwarding
to the Custodian the original of such assumption or substitution agreement,
which shall be added to the related Mortgage File and, for all purposes, shall
be considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting parts thereof.
ARTICLE III.
CONCERNING THE CUSTODIAN
Section 3.1. CUSTODIAN AS BAILEE AND AGENT OF THE TRUSTEE.
With respect to each Mortgage Note, Mortgage and other documents constituting
each Mortgage File which are delivered to the Custodian, the Custodian is
exclusively the bailee and agent of the Trustee and has no instructions to hold
any Mortgage Note or Mortgage for the benefit of any person other than the
Trustee and the Certificateholders and undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. Except upon
compliance with the provisions of Section 2.5 of this Agreement, no Mortgage
Note, Mortgage or Mortgage File shall be delivered by the Custodian to the
Company, the Servicers or the Master Servicer or otherwise released from the
possession of the Custodian.
Section 3.2. RESERVED.
Section 3.3. CUSTODIAN MAY OWN CERTIFICATES. The Custodian in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Custodian.
Section 3.4. MASTER SERVICER TO PAY CUSTODIAN'S FEES AND
EXPENSES. The Master Servicer covenants and agrees to pay to the Custodian from
time to time, and the Custodian shall be entitled to, reasonable compensation
for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Master Servicer
G-4
will pay or reimburse the Custodian upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Custodian in
accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ), except any such expense, disbursement
or advance as may arise from its negligence or bad faith or to the extent that
such cost or expense is indemnified by the Company pursuant to the Pooling and
Servicing Agreement.
Section 3.5. CUSTODIAN MAY RESIGN TRUSTEE MAY REMOVE
CUSTODIAN. The Custodian may resign from the obligations and duties hereby
imposed upon it as such obligations and duties relate to its acting as Custodian
of the Mortgage Loans. Upon receiving such notice of resignation, the Trustee
shall either take custody of the Mortgage Files itself and give prompt notice
thereof to the Company, the Master Servicer and the Custodian, or promptly
appoint a successor Custodian by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Custodian and one copy to
the successor Custodian. If the Trustee shall not have taken custody of the
Mortgage Files and no successor Custodian shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.
The Trustee may remove the Custodian at any time with the
consent of the Master Servicer. In such event, the Trustee shall appoint, or
petition a court of competent jurisdiction to appoint, a successor Custodian
hereunder. Any successor Custodian shall be a depository institution subject to
supervision or examination by federal or state authority, shall be able to
satisfy the other requirements contained in Section 3.7 and shall be
unaffiliated with the Servicer or the Company.
Any resignation or removal of the Custodian and appointment of
a successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Company and the Master
Servicer of the appointment of any successor Custodian. No successor Custodian
shall be appointed by the Trustee without the prior approval of the Company and
the Master Servicer.
Section 3.6. MERGER OR CONSOLIDATION OF CUSTODIAN. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 3.7. REPRESENTATIONS OF THE CUSTODIAN. The Custodian
hereby represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.
ARTICLE IV.
MISCELLANEOUS PROVISIONS
G-5
Section 4.1. NOTICES. All notices, requests, consents and
demands and other communications required under this Agreement or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by telegram
or telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.
Section 4.2. AMENDMENTS. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto, and neither the Company, the Master
Servicer nor the Trustee shall enter into any amendment hereof except as
permitted by the Pooling and Servicing Agreement. The Trustee shall give prompt
notice to the Custodian of any amendment or supplement to the Pooling and
Servicing Agreement and furnish the Custodian with written copies thereof.
Section 4.3. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 4.4. RECORDATION OF AGREEMENT. To the extent permitted
by applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Company and at the Trust's expense, but
only upon direction accompanied by an Opinion of Counsel reasonably satisfactory
to the Company to the effect that the failure to effect such recordation is
likely to materially and adversely affect the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 4.5. SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
G-6
IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.
Address: JPMORGAN CHASE BANK, as Trustee
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ By:____________________________
Name:
Attention: Title:
Telecopy:
Confirmation:
Address: STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By:____________________________
Name:
Title:
Address: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Master
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:____________________________
Name:
Title:
Address: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Custodian
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By:____________________________
Name:
Title:
▇-▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
)ss.:
COUNTY OF NEW YORK )
On the ___ day of April 2003 before me, a notary public in and
for said State, personally appeared _______________, known to me to be a
_________________of JPMorgan Chase Bank, a New York State banking corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_________________________
Notary Public
[SEAL]
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the ___ day of April 2003 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, a
national banking association that executed the within instrument, and also known
to me to be the person who executed it on behalf of said national banking
association, and acknowledged to me that such national banking association
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_________________________
Notary Public
[SEAL]
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the ___ day of April 2003 before me, a notary public in and
for said State, personally appeared ____________________, known to me to be a
Vice President of Structured Asset Mortgage Investments Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_________________________
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
)ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the ___ day of April 2003 before me, a notary public in and
for said State, personally appeared _____________, known to me to be a/an
_______________ of ▇▇▇▇▇ Fargo Bank Minnesota, National Association, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_________________________
Notary Public
[Notarial Seal]
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
April __, 20__
JPMorgan Chase Bank Structured Asset Mortgage Investments Inc.
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc.
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates, Series 2003-1
Re: Custodial Agreement, dated as of April 30, 2003, by
and among JPMorgan Chase Bank, Structured Asset
Mortgage Investments Inc. and ▇▇▇▇▇ Fargo Bank
Minnesota, National Association relating to Bear
▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through
Certificates, Series 2003-1
--------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned
Custodial Agreement, and subject to Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File (which contains an original Mortgage Note or lost note
affidavit) to the extent required in Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:________________________
Name:
Title:
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
_________, 20__
JPMorgan Chase Bank Structured Asset Mortgage Investments Inc.
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc.
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates, Series 2003-1
Re: Custodial Agreement, dated as of April 30, 2003, by
and among JPMorgan Chase Bank, Structured Asset
Mortgage Investments Inc. and ▇▇▇▇▇ Fargo Bank
Minnesota, National Association relating to Bear
▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through
Certificates, Series 2003-1
---------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned
Custodial Agreement, the undersigned, as Custodian, hereby certifies that it has
received a Mortgage File to the extent required pursuant to Section 2.01 of the
Pooling and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:________________________
Name:______________________
Title:_____________________
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
__________, 20__
JPMorgan Chase Bank Structured Asset Mortgage Investments Inc.
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc.
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates, Series 2003-1
Re: Custodial Agreement, dated as of April 30, 2003, by
and among JPMorgan Chase Bank, Structured Asset
Mortgage Investments Inc. and ▇▇▇▇▇ Fargo Bank
Minnesota, National Association relating to Bear
▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through
Certificates, Series 2003-1
---------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned
Custodial Agreement and subject to Section 2.02(b) of the Pooling and Servicing
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:
with respect to (I) each Mortgage Loan (other than a Cooperative Loan)
(i) The original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements
from the originator thereof to the Person endorsing it to the Trustee
or a lost note affidavit;
(ii) the original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating
that such Mortgage Loan is a MOM Loan, which shall have been recorded
(or if the original is not available, a copy), with evidence of such
recording indicated thereon;
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is
located) to "JPMorgan Chase Bank, as Trustee", with evidence of
recording with respect to each Mortgage Loan in the name of the Trustee
thereon;
(iv) With respect to each Mortgage Loan, to the extent
available, the original recorded assignment or assignments of the
Mortgage showing an unbroken chain of title
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from the originator thereof to the Person assigning it to the Trustee
or a copy of such assignment or assignments of the Mortgage certified
by the public recording office in which such assignment or assignments
have been recorded;
(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) 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.
and (II) with respect to each Cooperative Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements
from the originator thereof to the Person endorsing it to the Trustee,
or lost note affidavit, together with a copy of the related Mortgage
Note;
(ii) A counterpart of the Cooperative Lease and the Assignment
of Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from such
originator to the Trustee;
(iii) The related Cooperative Stock Certificate, representing
the related Cooperative Stock pledged with respect to such Cooperative
Loan, together with an undated stock power (or other similar
instrument) executed in blank;
(iv) The original recognition agreement by the Cooperative of
the interests of the mortgagee with respect to the related Cooperative
Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative
Loan as secured party, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement
and the Assignment of Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security
interest referenced in clause (vi) above showing an unbroken chain of
title from the originator to the Trustee, each with evidence of
recording thereof, evidencing the interest of the originator under the
Security Agreement and the Assignment of Proprietary Lease;
G-15
(viii) An executed assignment of the interest of the
originator in the Security Agreement, Assignment of Proprietary Lease
and the recognition agreement referenced in clause (iv) above, showing
an unbroken chain of title from the originator to the Trustee; and
(ix) The original of each modification, assumption agreement
or preferred loan agreement, if any, relating to such Cooperative Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement
or in the Pooling and Servicing Agreement, as applicable.
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:______________________
Name:____________________
Title:___________________
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
▇▇▇ AMRO SERVICING AGREEMENT
(Provided Upon Request)
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
ALLIANCE SERVICING AGREEMENT
(Provided Upon Request)
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SERVICING AGREEMENTS
(Provided Upon Request)
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CENDANT SERVICING AGREEMENTS
(Provided Upon Request)
H-4-1
EXHIBIT H-5
COMMERCIAL FEDERAL SERVICING AGREEMENT
(Provided Upon Request)
H-5-1
EXHIBIT H-6
COUNTRYWIDE SERVICING AGREEMENT
(Provided Upon Request)
H-6-1
EXHIBIT H-7
EMC SERVICING AGREEMENT SERVICING AGREEMENT
(Provided Upon Request)
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
GMAC SERVICING AGREEMENT
(Provided Upon Request)
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇ SERVICING AGREEMENT
(Provided Upon Request)
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇▇
SUNTRUST SERVICING AGREEMENT
(Provided Upon Request)
H-10-1
EXHIBIT H-11
U.S. BANK SERVICING AGREEMENT
(Provided Upon Request)
H-11-1
EXHIBIT H-12
WASHINGTON MUTUAL SERVICING AGREEMENT
(Provided Upon Request)
▇-▇▇-▇
▇▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇▇ ▇▇▇▇▇ SERVICING AGREEMENT
(Provided Upon Request)
H-13-1
EXHIBIT I
ASSIGNMENT AGREEMENTS
(Provided Upon Request)
I-1
EXHIBIT J
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of April 30, 2003,
as amended and supplemented by any and all amendments hereto (collectively, the
"AGREEMENT"), by and between EMC MORTGAGE CORPORATION, a Delaware corporation
(the "MORTGAGE LOAN SELLER"), and STRUCTURED ASSET MORTGAGE INVESTMENTS INC., a
Delaware corporation (the "PURCHASER").
Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, first lien mortgage loans secured primarily by
one- to four-family residential properties (collectively, the "MORTGAGE LOANS")
as described herein. The Purchaser intends to deposit the Mortgage Loans into a
trust fund (the "TRUST FUND") and create Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage
Pass-Through Certificates, Series 2003-1 (the "CERTIFICATES"), under a pooling
and servicing agreement, to be dated as of April 1, 2003 (the "POOLING AND
SERVICING AGREEMENT"), among the Purchaser, as seller, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as master servicer and securities
administrator, JPMorgan Chase Bank, as trustee (the "TRUSTEE") and EMC Mortgage
Corporation.
The Purchaser has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (Number
333-68542) relating to its Mortgage Pass-Through Certificates and the offering
of certain series thereof (including certain classes of the Certificates) from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the "SECURITIES ACT"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "PUBLIC OFFERING"), as
from time to time each is amended or supplemented pursuant to the Securities Act
or otherwise, are referred to herein as the "REGISTRATION STATEMENT" and the
"PROSPECTUS," respectively. The "PROSPECTUS SUPPLEMENT" shall mean that
supplement, dated April 28, 2003 to the Prospectus, dated April 25, 2003,
relating to certain classes of the Certificates. With respect to the Public
Offering of certain classes of the Certificates, the Purchaser and Bear, ▇▇▇▇▇▇▇
& Co. Inc. ("BEAR ▇▇▇▇▇▇▇") have entered into a terms agreement dated as of
April 28, 2003 to an underwriting agreement dated June 25, 1996, between the
Purchaser and Bear ▇▇▇▇▇▇▇ (collectively, the "UNDERWRITING AGREEMENT").
Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Pooling and Servicing Agreement. The following other terms are
defined as follows:
ACQUISITION PRICE: Cash in an amount equal to $__________
(plus $_______ in accrued interest).
J-1
BEAR ▇▇▇▇▇▇▇: Bear, ▇▇▇▇▇▇▇ & Co. Inc.
CLOSING DATE: April 30, 2003.
CUT-OFF DATE: April 1, 2003.
CUT-OFF DATE BALANCE: $632,190,222.63
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a Substitute Mortgage Loan.
DUE DATE: With respect to each Mortgage Loan, the date in each
month on which its scheduled payment is due if such due date is the first day of
a month and otherwise is deemed to be the first day of the following month or
such other date specified in the related Servicing Agreement.
MASTER SERVICER: ▇▇▇▇▇ Fargo Bank Minnesota, National
Association.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc., or its successors in
interest.
MORTGAGE: The mortgage or deed of trust creating a first lien
on an interest in real property securing a Mortgage Note.
MORTGAGE FILE: The items referred to in EXHIBIT 1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such documents pursuant to this Agreement.
MORTGAGE INTEREST RATE: The annual rate of interest borne by a
Mortgage Note as stated therein.
MORTGAGOR: The obligor(s) on a Mortgage Note.
NET RATE: For each Mortgage Loan, the Mortgage Interest Rate
for such Mortgage Loan less the Servicing Fee Rate.
OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Trustee.
PERSON: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
PURCHASE PRICE: With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the
Mortgage Loan Seller pursuant to this Agreement or Article II of the Pooling and
Servicing Agreement, an amount equal to the sum of (i)(a) 100% of the
Outstanding Principal Balance of such Mortgage Loan as of the date of repurchase
(or if the
J-2
related Mortgaged Property was acquired with respect thereto, 100% of the
Outstanding Principal Balance at the date of the acquisition), plus (b) 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 (c) any portion of the Master Servicing Compensation, Monthly
Advances and advances payable to the purchaser of the Mortgage Loan and (ii) any
costs and damages (if any) incurred by the Trust in connection with any
violation of such Mortgage Loan of any predatory or abusive lending laws.
PWS AGREEMENTS: The various agreements attached hereto as
Exhibit 6.
RATING AGENCIES: Standard & Poor's and Moody's, each a "RATING
AGENCY."
SECURITIES ACT: The Securities Act of 1933, as amended.
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.
STANDARD & POOR'S: Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or its successors in interest.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet on the date of such substitution the
requirements stated herein and in the Pooling and Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.
VALUE: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.
SECTION 2. PURCHASE AND SALE OF THE MORTGAGE LOANS AND RELATED
RIGHTS. (a) Upon satisfaction of the conditions set forth in Section 10 hereof,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.
(b) The closing for the purchase and sale of the Mortgage
Loans and the closing for the issuance of the Certificates will take place on
the Closing Date at the office of the Purchaser's counsel in New York, New York
or such other place as the parties shall agree.
(c) Upon the satisfaction of the conditions set forth in
Section 10 hereof, on the Closing Date, the Purchaser shall pay to the Mortgage
Loan Seller the Acquisition Price for the Mortgage Loans in immediately
available funds by wire transfer to such account or accounts as shall be
designated by the Mortgage Loan Seller.
J-3
(d) In addition to the foregoing, on the Closing Date the
Mortgage Loan Seller assigns to the Purchaser all of its right, title and
interest in the PWS Agreements (other than its right to enforce the
representations and warranties set forth therein).
SECTION 3. MORTGAGE LOAN SCHEDULES. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "PRELIMINARY MORTGAGE LOAN SCHEDULE") setting forth
the information listed on EXHIBIT 2 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "FINAL
MORTGAGE LOAN SCHEDULE") setting forth the information listed on EXHIBIT 2 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "AMENDMENT"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.
SECTION 4. MORTGAGE LOAN TRANSFER.
(a) The Purchaser will be entitled to all scheduled payments
of principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereon, other than
scheduled principal and interest, received after the Cut-off Date. The Mortgage
Loan Seller will be entitled to all scheduled payments of principal and interest
on the Mortgage Loans due on or before the Cut-off Date (including payments
collected after the Cut-off Date) and all payments thereon, other than scheduled
principal and interest, received on or before the Cut-off Date. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.
(b) Pursuant to various conveyancing documents to be executed
on the Closing Date and pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign on the Closing Date all of its right, title and interest
in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholders. In connection with the transfer and assignment of the
Mortgage Loans, the Mortgage Loan Seller has delivered or will deliver or cause
to be delivered to the Trustee by the Closing Date or such later date as is
agreed to by the Purchaser and the Mortgage Loan Seller (each of the Closing
Date and such later date is referred to as a "MORTGAGE FILE DELIVERY DATE"), the
items of each Mortgage File, PROVIDED, HOWEVER, that in lieu of the foregoing,
the Mortgage Loan Seller may deliver the following documents, under the
circumstances set forth below: (x) in lieu of the original Security Instrument,
assignments to the Trustee or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included thereon, be
delivered to recording offices for recording and have not been returned to the
Mortgage Loan Seller in time to permit their delivery as specified above, the
Mortgage Loan Seller may deliver a true copy thereof with a certification by the
Mortgage Loan Seller, on the face of such copy, substantially as follows:
"Certified to be a
J-4
true and correct copy of the original, which has been transmitted for recording"
(y) in lieu of the Security Instrument, assignments to the Trustee or
intervening assignments thereof, if the applicable jurisdiction retains the
originals of such documents (as evidenced by a certification from the Mortgage
Loan Seller to such effect) the Mortgage Loan Seller may deliver photocopies of
such documents containing an original certification by the judicial or other
governmental authority of the jurisdiction where such documents were recorded;
and (z) in lieu of the Mortgage Notes relating to the Mortgage Loans, each
identified in the list delivered by the Purchaser to the Trustee on the Closing
Date and attached hereto as Exhibit 5, the Mortgage Loan Seller may deliver lost
note affidavits and indemnities of the Mortgage Loan Seller; 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 Mortgage Loan
Seller, in lieu of delivering the above documents, may deliver to the Trustee a
certification by the Mortgage Loan Seller or the Master Servicer to such effect.
The Mortgage Loan Seller shall deliver such original documents (including any
original documents as to which certified copies had previously been delivered)
or such certified copies to the Trustee promptly after they are received. The
Mortgage Loan Seller shall cause the Mortgage and intervening assignments, if
any, and the assignment of the Security Instrument to be recorded not later than
180 days after the Closing Date, unless such assignment is not required to be
recorded under the terms set forth in Section 6(a) hereof.
(c) The Mortgage Loan Seller and the Purchaser acknowledge
hereunder that all of the Mortgage Loans and the related servicing will
ultimately be assigned to JPMorgan Chase Bank, as Trustee for the
Certificateholders, on the date hereof.
SECTION 5. EXAMINATION OF MORTGAGE FILES.
(a) On or before the Mortgage File Delivery Date, the Mortgage
Loan Seller will have made the Mortgage Files available to the Purchaser or its
agent for examination which may be at the offices of the Trustee or the Mortgage
Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that the
Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure, repurchase, substitution or other relief as provided in
this Agreement. In furtherance of the foregoing, the Mortgage Loan Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Mortgage Loan Seller's
compliance with the delivery and recordation requirements of this Agreement and
the Pooling and Servicing Agreement. In addition, upon request of the Purchaser,
the Mortgage Loan Seller agrees to provide to the Purchaser, Bear ▇▇▇▇▇▇▇ and to
any investors or prospective investors in the Certificates information regarding
the Mortgage Loans and their servicing, to make the Mortgage Files available to
the Purchaser, Bear ▇▇▇▇▇▇▇ and to such investors or prospective investors
(which may be at the offices of the Mortgage Loan Seller and/or the Mortgage
Loan Seller's custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear ▇▇▇▇▇▇▇ and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear ▇▇▇▇▇▇▇ and such
investors or potential investors to conduct such due diligence as any such party
reasonably believes is appropriate.
J-5
(a) Pursuant to the Pooling and Servicing Agreement, on the
Closing Date the Trustee, for the benefit of the Certificateholders, will review
or cause the Custodian to review items of the Mortgage Files as set forth on
EXHIBIT 1 and will deliver or cause the Custodian to deliver to the Mortgage
Loan Seller an initial certification in the form attached as Exhibit One to the
Custodial Agreement.
(b) Pursuant to the Pooling and Servicing Agreement, within 90
days of the Closing Date, the Trustee will review or shall cause the Custodian
to review items of the Mortgage Files as set forth on EXHIBIT 1 and will deliver
to the Mortgage Loan Seller and the Master Servicer an interim certification
substantially in the form of Exhibit Two to the Custodial Agreement.
(c) Pursuant to the Pooling and Servicing Agreement, within
180 days of the Closing Date (or, with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Trustee or Custodian thereof)
the Trustee will review or cause the Custodian to review items of the Mortgage
Files as set forth on EXHIBIT 1 and will deliver to the Mortgage Loan Seller and
the Master Servicer a final certification substantially in the form of Exhibit
Three to the Custodial Agreement. If the Trustee is unable to deliver a final
certification with respect to the items listed in EXHIBIT 1 due to any document
that is missing, has not been executed, is unrelated, determined on the basis of
the Mortgagor name, original principal balance and loan number, to the Mortgage
Loans identified in the Final Mortgage Loan Schedule (a "MATERIAL DEFECT"), the
Trustee or the Custodian, as its agent, shall promptly notify the Mortgage Loan
Seller of such Material Defect. The Mortgage Loan Seller shall correct or cure
any such Material Defect within 90 days from the date of notice from the Trustee
or the Custodian, as its agent, of the Material Defect and if the Mortgage Loan
Seller does not correct or cure such Material Defect within such period and such
defect materially and adversely affects the interests of the Certificateholders
in the related Mortgage Loan, the Mortgage Loan Seller will, in accordance with
the terms of the Pooling and Servicing Agreement, within 90 days of the date of
notice, provide the Trustee with a Substitute Mortgage Loan (if within two years
of the Closing Date) or purchase the related Mortgage Loan at the applicable
Purchase 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, repurchase or substitution 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 of Mortgage Loan Seller or a Servicing Officer
confirming that such documents have been accepted for recording, and delivery to
the Trustee or the Custodian, as its agent, shall be effected by the Mortgage
Loan Seller within thirty days of its receipt of the original recorded document.
J-6
(d) At the time of any substitution, the Mortgage Loan Seller
shall deliver or cause to be delivered the Substitute Mortgage Loan, the related
Mortgage File and any other documents and payments required to be delivered in
connection with a substitution pursuant to the Pooling and Servicing Agreement.
At the time of any purchase or substitution, the Trustee shall (i) assign to the
Mortgage Loan Seller and cause the Trustee to release the documents (including,
but not limited to, the Mortgage, Mortgage Note and other contents of the
Mortgage File) in the possession of the Trustee relating to the Deleted Mortgage
Loan and (ii) execute and deliver such instruments of transfer or assignment, in
each case without recourse, as shall be necessary to vest in the Mortgage Loan
Seller title to such Deleted Mortgage Loan.
SECTION 6. RECORDATION OF ASSIGNMENTS OF MORTGAGE.
(a) The Mortgage Loan Seller shall, promptly after the Closing
Date, cause each Mortgage and each assignment of Mortgage from the Mortgage Loan
Seller to the Trustee, and all unrecorded intervening assignments, if any,
delivered on or prior to the Closing Date, to be recorded in all recording
offices in the jurisdictions where the related Mortgaged Properties are located;
PROVIDED, HOWEVER, the Mortgage Loan Seller need not cause to be recorded any
assignment which relates to a Mortgage Loan if (a) such recordation is not
required by the Rating Agencies or an Opinion of Counsel has been provided to
the Trustee which states that the recordation of such assignment is not
necessary to protect the Trustee's interest in the related Mortgage Loan or (b)
MERS is identified on the Mortgage or a properly recorded assignment of the
Mortgage, as the Mortgagee of record solely as nominee for the Mortgage Loan
Seller and its successors and assigns; PROVIDED, HOWEVER, notwithstanding the
delivery of any Opinion of Counsel, each assignment of Mortgage shall be
submitted for recording by the Mortgage Loan Seller in the manner described
above, at no expense to the Trust Fund or 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 a Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgage Loan Seller and (iv) the
occurrence of a servicing transfer as described in Section 8.02 of the Pooling
and Servicing Agreement.
While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Trustee a certified copy of such Mortgage or assignment. In the event that,
within 180 days of the Closing Date, a Security Instrument is not recorded
pursuant to the preceding paragraph or the Trustee has not received evidence of
recording with respect to each Mortgage Loan delivered to the Purchaser pursuant
to the terms hereof or as set forth above, the failure to provide evidence of
recording or such Opinion of Counsel (in the alternative, if required) shall be
considered a Material Defect, and the provisions of Section 5(c) and (d) shall
apply. All customary recording fees and reasonable expenses relating to the
recordation of the assignments of mortgage to the Trustee or the Opinion of
Counsel, as the case may be, shall be borne by the Mortgage Loan Seller.
(b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser to secure a debt or
other obligation of the Mortgage Loan Seller. However, in the event that,
notwithstanding
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the intent of the parties, the Mortgage Loans are held by a court to continue to
be property of the Mortgage Loan Seller, then (a) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
applicable Uniform Commercial Code; (b) the transfer of the Mortgage Loans
provided for herein shall be deemed to be a grant by the Mortgage Loan Seller to
the Purchaser of a security interest in all of the Mortgage Loan Seller's right,
title and interest in and to the Mortgage Loans and all amounts payable to the
holders of the Mortgage Loans in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, to the extent the Purchaser
would otherwise be entitled to own such Mortgage Loans and proceeds pursuant to
Section 4 hereof, including all amounts, other than investment earnings, from
time to time held or invested in any accounts created pursuant to the Pooling
and Servicing Agreement, whether in the form of cash, instruments, securities or
other property; (c) the possession by the Purchaser or the Trustee of Mortgage
Notes and such other items of property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-313 (or comparable provision) of the applicable Uniform Commercial
Code; and (d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Purchaser for the purpose of perfecting such security interest under applicable
law. Any assignment of the interest of the Purchaser pursuant to any provision
hereof or pursuant to the Pooling and Servicing Agreement shall also be deemed
to be an assignment of any security interest created hereby. The Mortgage Loan
Seller and the Purchaser shall, to the extent consistent with this Agreement,
take such actions as may be reasonably necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Pooling and Servicing Agreement.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF MORTGAGE LOAN
SELLER CONCERNING THE MORTGAGE LOANS. The Mortgage Loan Seller hereby represents
and warrants to the Purchaser as of the Closing Date or such other date as may
be specified below with respect to each Mortgage Loan being sold by it:
(i) the information set forth in the Mortgage Loan Schedule
hereto is true and correct in all material respects and the information
provided to the Rating Agencies, including the Mortgage Loan level
detail, is true and correct according to the Rating Agency
requirements;
(ii) immediately prior to the transfer to the Purchaser, the
Mortgage Loan Seller was the sole owner of beneficial title and holder
of each Mortgage and Mortgage Note relating to the Mortgage Loans and
is conveying the same free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or
security interests of any nature and the Mortgage Loan Seller has full
right and authority to sell or assign the same pursuant to this
Agreement;
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(iii) to the best of the Mortgage Loan Seller's knowledge,
each Mortgage Loan at the time it was made complied in all material
respects with applicable state and federal laws, including, without
limitation, usury, equal credit opportunity, disclosure and recording
laws; and, to the best of the Mortgage Loan Seller's knowledge, each
Mortgage Loan has been serviced in all material respects in accordance
with applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, disclosure and recording laws and the
terms of the related Mortgage Note, the Mortgage and other loan
documents;
(iv) there is no monetary default existing under any Mortgage
or the related Mortgage Note and there is no material event which, with
the passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach or event of
acceleration; and neither the Mortgage Loan Seller, any of its
affiliates nor any servicer of any related Mortgage Loan has taken any
action to waive any default, breach or event of acceleration; no
foreclosure action is threatened or has been commenced with respect to
the Mortgage Loan;
(v) the terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by
written instruments, (i) if required by law in the jurisdiction where
the Mortgaged Property is located, or (ii) to protect the interests of
the Trustee on behalf of the Certificateholders;
(vi) no selection procedure reasonably believed by the
Mortgage Loan Seller to be adverse to the interests of the
Certificateholders was utilized in selecting the Mortgage Loans;
(vii) each Mortgage is a valid and enforceable first lien on
the property securing the related Mortgage Note and each Mortgaged
Property is owned by the Mortgagor in fee simple (except with respect
to common areas in the case of condominiums, PUDs and DE MINIMIS PUDs)
or by leasehold for a term longer than the term of the related
Mortgage, subject only to (i) the lien of current real property taxes
and assessments, (ii) covenants, conditions and restrictions, rights of
way, easements and other matters of public record as of the date of
recording of such Mortgage, such exceptions being acceptable to
mortgage lending institutions generally or specifically reflected in
the appraisal obtained in connection with the origination of the
related Mortgage Loan or referred to in the lender's title insurance
policy delivered to the originator of the related Mortgage Loan and
(iii) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security intended
to be provided by such Mortgage;
(viii) there is no mechanics' lien or claim for work, labor or
material affecting the premises subject to any Mortgage which is or may
be a lien prior to, or equal with, the lien of such Mortgage except
those which are insured against by the title insurance policy referred
to in (xiiii) below;
(ix) as of the Cut-off Date, to the best of the Mortgage Loan
Seller's knowledge, there was no delinquent tax or assessment lien
against the property subject to any Mortgage,
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except where such lien was being contested in good faith and a stay had
been granted against levying on the property;
(x) there is no valid offset, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor to
pay the unpaid principal and interest on such Mortgage Note;
(xi) to the best of the Mortgage Loan Seller's knowledge,
except to the extent insurance is in place which will cover such
damage, the physical property subject to any Mortgage is free of
material damage and is in good repair and there is no proceeding
pending or threatened for the total or partial condemnation of any
Mortgaged Property;
(xii) to the best of the Mortgage Loan Seller's knowledge, the
Mortgaged Property and all improvements thereon comply with all
requirements of any applicable zoning and subdivision laws and
ordinances;
(xiii) a lender's title insurance policy (on an ALTA or CLTA
form) or binder, or other assurance of title customary in the relevant
jurisdiction therefor in a form acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac, was issued on the date that each Mortgage Loan was created by a
title insurance company which, to the best of the Mortgage Loan
Seller's knowledge, was qualified to do business in the jurisdiction
where the related Mortgaged Property is located, insuring the Mortgage
Loan Seller and its successors and assigns that the Mortgage is a first
priority lien on the related Mortgaged Property in the original
principal amount of the Mortgage Loan. The Mortgage Loan Seller is the
sole insured under such lender's title insurance policy, and such
policy, binder or assurance is valid and remains in full force and
effect, and each such policy, binder or assurance shall contain all
applicable endorsements including a negative amortization endorsement,
if applicable;
(xiv) at the time of origination, each Mortgaged Property was
the subject of an appraisal which conformed to the underwriting
requirements of the originator of the Mortgage Loan;
(xv) as of the Closing Date, the improvements on each
Mortgaged Property securing a Mortgage Loan is insured (by an insurer
which is acceptable to the Mortgage Loan Seller) against loss by fire
and such hazards as are covered under a standard extended coverage
endorsement in the locale in which the Mortgaged Property is located,
in an amount which is not less than the lesser of the maximum insurable
value of the improvements securing such Mortgage Loan or the
outstanding principal balance of the Mortgage Loan, but in no event in
an amount less than an amount that is required to prevent the Mortgagor
from being deemed to be a co-insurer thereunder; if the improvement on
the Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium project; if
upon origination of the related Mortgage Loan, the improvements on the
Mortgaged Property were in an area identified as a federally designated
flood area, a flood insurance policy is in effect in an amount
representing coverage not less than the least of (i) the outstanding
principal balance of the Mortgage Loan, (ii) the restorable cost of
improvements located on such Mortgaged Property or (iii)
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the maximum coverage available under federal law; and each Mortgage
obligates the Mortgagor thereunder to maintain the insurance referred
to above at the Mortgagor's cost and expense;
(xvi) each Mortgage Loan constitutes a "qualified mortgage"
under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.8600-2(a)(1);
(xvii) each Mortgage Loan was originated or funded by (a) a
savings and loan association, savings bank, commercial bank, credit
union, insurance company or similar institution which is supervised and
examined by a federal or state authority (or originated by (i) a
subsidiary of any of the foregoing institutions which subsidiary is
actually supervised and examined by applicable regulatory authorities
or (ii) a mortgage loan correspondent of any of the foregoing and that
was originated pursuant to the criteria established by any of the
foregoing) or (b) a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to sections 203 and 211 of the National
Housing Act, as amended;
(xviii) none of the Mortgage Loans are (a) loans subject to 12
CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation
Z, the regulation implementing TILA, which implements the Home
Ownership and Equity Protection Act of 1994, as amended or (b)
classified and/or defined as a "high cost", "covered", or "predatory"
loan under any other state, federal or local law or regulation or
ordinance, including, but not limited to, the States of Georgia or
North Carolina, or the City of New York; and
(xxix) the information set forth in Schedule A of the
Prospectus Supplement with respect to the Mortgage Loans is true and
correct in all material respects.
It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or assignment of Mortgage or the
examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the
representations and warranties set forth above shall be deemed to be made by the
Mortgage Loan Seller as to any Substitute Mortgage Loan as of the date of
substitution.
Upon discovery or receipt of notice by the Mortgage Loan
Seller, the Purchaser or the Trustee of a breach of any representation or
warranty of the Mortgage Loan Seller set forth in this Section 7 which
materially and adversely affects the value of the interests of the Purchaser,
the Certificateholders or the Trustee in any of the Mortgage Loans delivered to
the Purchaser pursuant to this Agreement, the party discovering or receiving
notice of such breach shall give prompt written notice to the others. In the
case of any such breach of a representation or warranty set forth in this
Section 7, within 90 days from the date of discovery by the Mortgage Loan
Seller, or the date the Mortgage Loan Seller is notified by the party
discovering or receiving notice of such breach (whichever occurs earlier), the
Mortgage Loan Seller will (i) cure such breach in all material respects, (ii)
purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Substitute
Mortgage Loan in exchange for such Mortgage Loan. The obligations of the
Mortgage Loan Seller to cure, purchase or substitute
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a qualifying Substitute Mortgage Loan shall constitute the Purchaser's, the
Trustee's and the Certificateholder's sole and exclusive remedy under this
Agreement or otherwise respecting a breach of representations or warranties
hereunder with respect to the Mortgage Loans, except for the obligation of the
Mortgage Loan Seller to indemnify the Purchaser for such breach as set forth in
and limited by Section 13 hereof.
Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.
SECTION 8. REPRESENTATIONS AND WARRANTIES CONCERNING THE
MORTGAGE LOAN SELLER. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser as to itself in
the capacity indicated as follows:
(a) the Mortgage Loan Seller (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and (ii) is qualified and in good standing 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 Mortgage Loan Seller's
business as presently conducted or on the Mortgage Loan Sellers ability
to enter into this Agreement and to consummate the transactions
contemplated hereby;
(b) the Mortgage Loan Seller has full power to own its
property, to carry on its business as presently conducted and to enter
into and perform its obligations under this Agreement;
(c) the execution and delivery by the Mortgage Loan Seller of
this Agreement have been duly authorized by all necessary action on the
part of the Mortgage Loan 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 Mortgage Loan Seller or its
properties or the charter or by-laws of the Mortgage Loan Seller,
except those conflicts, breaches or defaults which would not reasonably
be expected to have a material adverse effect on the Mortgage Loan
Seller's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(d) the execution, delivery and performance by the Mortgage
Loan Seller of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any state, federal or other governmental
authority or agency, except those consents, approvals, notices,
registrations or other actions as have already been
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obtained, given or made and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet
completed;
(e) this Agreement has been duly executed and delivered by the
Mortgage Loan Seller and, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid and binding obligation
of the Mortgage Loan 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);
(f) there are no actions, suits or proceedings pending or, to
the knowledge of the Mortgage Loan Seller, threatened against the
Mortgage Loan 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 Mortgage Loan Seller will be
determined adversely to the Mortgage Loan Seller and will if determined
adversely to the Mortgage Loan Seller materially and adversely affect
the Mortgage Loan Seller's ability to perform its obligations under
this Agreement; and the Mortgage Loan 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
(g) the Mortgage Loan Seller's Information as identified in
Exhibit 3 does not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading.
SECTION 9. REPRESENTATIONS AND WARRANTIES CONCERNING THE
PURCHASER. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Mortgage Loan Seller as follows:
(a) the Purchaser (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (ii)
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 Purchaser's business as presently conducted or on the
Purchaser's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(b) the Purchaser 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;
(c) the execution and delivery by the Purchaser of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Purchaser; 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 Purchaser or its properties or the
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articles of incorporation or by-laws of the Purchaser, except those
conflicts, breaches or defaults which would not reasonably be expected
to have a material adverse effect on the Purchaser's ability to enter
into this Agreement and to consummate the transactions contemplated
hereby;
(d) the execution, delivery and performance by the Purchaser
of this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency,
except those consents, approvals, notices, registrations or other
actions as have already been obtained, given or made;
(e) this Agreement has been duly executed and delivered by the
Purchaser and, assuming due authorization, execution and delivery by
the Mortgage Loan Seller, constitutes a valid and binding obligation of
the Purchaser 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);
(f) there are no actions, suits or proceedings pending or, to
the knowledge of the Purchaser, threatened against the Purchaser,
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 Purchaser will be determined adversely to
the Purchaser and will if determined adversely to the Purchaser
materially and adversely affect the Purchaser's ability to perform its
obligations under this Agreement; and the Purchaser 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
(g) the Purchaser's Information as identified in Exhibit 4
does not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not
misleading.
SECTION 10. CONDITIONS TO CLOSING.
(a) The obligations of the Purchaser under this Agreement will
be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(1) Each of the obligations of the Mortgage
Loan Seller required to be performed at or prior to the
Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with in all material
respects; all of the representations and warranties of the
Mortgage Loan Seller under this Agreement shall be true and
correct as of the date or dates specified in all material
respects; and no event shall have occurred which, with notice
or the passage of time, would constitute a default under this
Agreement, or the Pooling and
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Servicing Agreement; and the Purchaser shall have received
certificates to that effect signed by authorized officers of
the Mortgage Loan Seller.
(2) The Purchaser shall have received all of
the following closing documents, in such forms as are agreed
upon and reasonably acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the respective terms thereof:
(i) If required pursuant to Section 3
hereof, the Amendment dated as of the Closing Date and any documents
referred to therein;
(ii) If required pursuant to Section 3
hereof, the Final Mortgage Loan Schedule containing the information set
forth on Exhibit 2 hereto, one copy to be attached to each counterpart
of the Amendment;
(iii) The Pooling and Servicing Agreement,
in form and substance reasonably satisfactory to the Trustee and the
Purchaser, and all documents required thereby duly executed by all
signatories;
(iv) A certificate of an officer of the
Mortgage Loan Seller dated as of the Closing Date, in a form reasonably
acceptable to the Purchaser, and attached thereto the resolutions of
the Mortgage Loan Seller authorizing the transactions contemplated by
this Agreement, together with copies of the charter and by-laws of the
Mortgage Loan Seller;
(v) One or more opinions of counsel from the
Mortgage Loan Seller's counsel otherwise in form and substance
reasonably satisfactory to the Purchaser, the Trustee and each Rating
Agency;
(vi) A letter from each of the Rating
Agencies giving each Class of Certificates set forth on Schedule A the
rating set forth on Schedule A; and
(vii) Such other documents, certificates
(including additional representations and warranties) and opinions as
may be reasonably necessary to secure the intended ratings from each
Rating Agency for the Certificates.
(3) The Certificates to be sold to Bear
▇▇▇▇▇▇▇ pursuant to the Underwriting Agreement and the
Purchase Agreement shall have been issued and sold to Bear
▇▇▇▇▇▇▇.
(4) The Mortgage Loan Seller shall have
furnished to the Purchaser such other certificates of its
officers or others and such other documents and opinions of
counsel to evidence fulfillment of the conditions set forth in
this Agreement and the transactions contemplated hereby as the
Purchaser and its counsel may reasonably request.
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(b) The obligations of the Mortgage Loan Seller under this
Agreement shall be subject to the satisfaction, on or prior to the
Closing Date, of the following conditions:
(1) The obligations of the Purchaser
required to be performed by it on or prior to the Closing Date
pursuant to the terms of this Agreement shall have been duly
performed and complied with in all material respects, and all
of the representations and warranties of the Purchaser under
this Agreement shall be true and correct in all material
respects as of the date hereof and as of the Closing Date, and
no event shall have occurred which would constitute a breach
by it of the terms of this Agreement, and the Mortgage Loan
Seller shall have received a certificate to that effect signed
by an authorized officer of the Purchaser.
(2) The Mortgage Loan Seller shall have
received copies of all of the following closing documents, in
such forms as are agreed upon and reasonably acceptable to the
Mortgage Loan Seller, duly executed by all signatories other
than the Mortgage Loan Seller as required pursuant to the
respective terms thereof:
(i) If required pursuant to Section 3
hereof, the Amendment dated as of the Closing Date and any documents
referred to therein;
(ii) The Pooling and Servicing Agreement, in
form and substance reasonably satisfactory to the Mortgage Loan Seller,
and all documents required thereby duly executed by all signatories;
(iii) A certificate of an officer of the
Purchaser dated as of the Closing Date, in a form reasonably acceptable
to the Mortgage Loan Seller, and attached thereto the resolutions of
the Purchaser authorizing the transactions contemplated by this
Agreement and the Pooling and Servicing Agreement, together with copies
of the Purchaser's articles of incorporation, and evidence as to the
good standing of the Purchaser dated as of a recent date;
(iv) One or more opinions of counsel from
the Purchaser's counsel in form and substance reasonably satisfactory
to the Mortgage Loan Seller;
(v) Such other documents, certificates
(including additional representations and warranties) and opinions as
may be reasonably necessary to secure the intended rating from each
Rating Agency for the Certificates;
SECTION 11. FEES AND EXPENSES. Subject to Section 16 hereof,
the Mortgage Loan Seller shall pay on the Closing Date or such later date as may
be agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan
Seller's attorneys and the reasonable fees and expenses of the Purchaser's
attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the fee
for the use of Purchaser's Registration Statement based on the aggregate
original principal amount of the Certificates and the filing fee of the
Commission as in effect on the date on which the Registration Statement was
declared effective, (iv) the fees and expenses including counsel's fees
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and expenses in connection with any "blue sky" and legal investment matters, (v)
the fees and expenses of the Trustee which shall include without limitation the
fees and expenses of the Trustee (and the fees and disbursements of its counsel)
with respect to (A) legal and document review of this Agreement, the Pooling and
Servicing Agreement, the Certificates and related agreements, (B) attendance at
the Closing and (C) review of the Mortgage Loans to be performed by the Trustee,
(vi) the expenses for printing or otherwise reproducing the Certificates, the
Prospectus and the Prospectus Supplement, (vii) the fees and expenses of each
Rating Agency (both initial and ongoing), (viii) the fees and expenses relating
to the preparation and recordation of mortgage assignments (including
intervening assignments, if any and if available, to evidence a complete chain
of title from the originator to the Trustee) from the Mortgage Loan Seller to
the Trustee or the expenses relating to the Opinion of Counsel referred to in
Section 6(a) hereof, as the case may be, and (ix) Mortgage File due diligence
expenses and other out-of-pocket expenses incurred by the Purchaser in
connection with the purchase of the Mortgage Loans and by Bear ▇▇▇▇▇▇▇ in
connection with the sale of the Certificates. The Mortgage Loan Seller
additionally agrees to pay directly to any third party on a timely basis the
fees provided for above which are charged by such third party and which are
billed periodically.
SECTION 12. ACCOUNTANTS' LETTERS.
(a) Deloitte & Touche LLP will review the characteristics of a
sample of the Mortgage Loans described in the Final Mortgage Loan
Schedule and will compare those characteristics to the description of
the Mortgage Loans contained in the Prospectus Supplement under the
captions "Summary of Terms--The Mortgage Pool" and "Description of the
Mortgage Loans" and in Annex A thereto. The Mortgage Loan Seller will
cooperate with the Purchaser in making available all information and
taking all steps reasonably necessary to permit such accountants to
complete the review and to deliver the letters required of them under
the Underwriting Agreement. Deloitte & Touche LLP will also confirm
certain calculations as set forth under the caption "Yield and
Prepayment Considerations" in the Prospectus Supplement.
(b) To the extent statistical information with respect to the
Master Servicer's servicing portfolio is included in the Prospectus
Supplement under the caption "The Master Servicer," a letter from the
certified public accountant for the Master Servicer will be delivered
to the Purchaser dated the date of the Prospectus Supplement, in the
form previously agreed to by the Mortgage Loan Seller and the
Purchaser, with respect to such statistical information.
SECTION 13. NOTICES. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to EMC Mortgage Corporation, Mac ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Telecopy: (972-444-2880)), and notices to
the Purchaser shall be directed to Structured Asset Mortgage Investments Inc.,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Telecopy: (212-272-7206)),
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇; or to any other address as may hereafter be
furnished by one party to the other party by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on the
date received at the premises of the addressee (as evidenced, in the case of
registered or certified mail, by the date noted on the return receipt) provided
that it is received on a business day during normal business hours and, if
received after normal business hours, then it shall be deemed to be received on
the next business day.
J-17
SECTION 14. TRANSFER OF MORTGAGE LOANS. The Purchaser retains
the right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Trustee without the consent of the Mortgage Loan Seller, and,
upon such assignment, the Trustee shall succeed to the applicable rights and
obligations of the Purchaser hereunder; PROVIDED, HOWEVER, the Purchaser shall
remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and
as provided in Section 2(a). Notwithstanding the foregoing, the sole and
exclusive right and remedy of the Trustee with respect to a breach of
representation or warranty of the Mortgage Loan Seller shall be the purchase or
substitution obligations of the Mortgage Loan Seller contained in Sections 5 and
7 hereof.
SECTION 15. TERMINATION. This Agreement may be terminated (a)
by the mutual consent of the parties hereto prior to the Closing Date, (b) by
the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the Mortgage
Loan Seller's obligation to close set forth under Section 10(b) hereof are not
fulfilled as and when required to be fulfilled. In the event of termination
pursuant to clause (b), the Mortgage Loan Seller shall pay, and in the event of
termination pursuant to clause (c), the Purchaser shall pay, all reasonable
out-of-pocket expenses incurred by the other in connection with the transactions
contemplated by this Agreement. In the event of a termination pursuant to clause
(a), each party shall be responsible for its own expenses.
SECTION 16. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Mortgage Loan
Seller submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by
the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans
to the Purchaser, the Mortgage Loan Seller's representations and warranties
contained herein with respect to the Mortgage Loans shall be deemed to relate to
the Mortgage Loans actually delivered to the Purchaser and included in the Final
Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those
Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule pursuant to
Section 3 hereof prior to the Closing.
SECTION 17. SEVERABILITY. If any provision of this Agreement
shall be prohibited or invalid under applicable law, the Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.
SECTION 18. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.
SECTION 19. AMENDMENT. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.
SECTION 20. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
J-18
SECTION 21. FURTHER ASSURANCES. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by either Rating Agency.
SECTION 22. SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns. The Mortgage Loan Seller acknowledges and agrees that
the Purchaser may assign its rights under this Agreement (including, without
limitation, with respect to the Mortgage Loan Seller's representations and
warranties respecting the Mortgage Loans) to the Trustee. Any person into which
the Mortgage Loan Seller may be merged or consolidated (or any person resulting
from any merger or consolidation involving the Mortgage Loan Seller), any person
resulting from a change in form of the Mortgage Loan Seller or any person
succeeding to the business of the Mortgage Loan Seller, shall be considered the
"successor" of the Mortgage Loan Seller hereunder and shall be considered a
party hereto without the execution or filing of any paper or any further act or
consent on the part of any party hereto. Except as provided in the two preceding
sentences, this Agreement cannot be assigned, pledged or hypothecated by either
party hereto without the written consent of the other parties to this Agreement
and any such assignment or purported assignment shall be deemed null and void.
SECTION 23. THE MORTGAGE LOAN SELLER. The Mortgage Loan Seller
will keep in full effect all rights as are necessary to perform their respective
obligations under this Agreement.
SECTION 24. ENTIRE AGREEMENT. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.
SECTION 25. NO PARTNERSHIP. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
J-19
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.
EMC MORTGAGE CORPORATION
By:____________________________
Name:
Title:
STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
By:____________________________
Name:
Title:
J-20
EXHIBIT 1
---------
CONTENTS OF MORTGAGE FILE
-------------------------
The Mortgage File shall include each of the following items, which
shall be available for inspection by the Purchaser or its designee, and which
shall be delivered to the Purchaser or its designee pursuant to the terms of the
Agreement.
With respect to each Mortgage Loan (other than a Cooperative Loan):
(i) The original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements
from the original payee thereof to the Person endorsing it to the
Trustee, or lost note affidavit;
(ii) The original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating
that such Mortgage Loan is a MOM Loan, which shall have been recorded
(or if the original is not available, a copy), with evidence of such
recording indicated thereon (or if the original Security Instrument,
assignments to the Trustee or intervening assignments thereof which
have been delivered, are being delivered or will, upon receipt of
recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording
and have not been returned to the Seller in time to permit their
recording as specified in Section 2.01(b) of the Pooling and Servicing
Agreement, shall be in recordable form);
(iii) Unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is
located) to "JPMorgan Chase Bank, as Trustee", with evidence of
recording with respect to each Mortgage Loan in the name of the Trustee
thereon (or if the original Security Instrument, assignments to the
Trustee or intervening assignments thereof which have been delivered,
are being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included thereon, be
delivered to recording offices for recording and have not been returned
to the Seller in time to permit their delivery as specified in Section
2.01(b) of the Pooling and Servicing Agreement, 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");
(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) The originals of all modification agreements, if
applicable and available.
E-1
With respect to each Cooperative Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements
from the originator thereof to the Person endorsing it to the Trustee,
or lost note affidavit, together with a copy of the related Mortgage
Note;
(ii) A counterpart of the Cooperative Lease and the Assignment
of Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from such
originator to the Trustee;
(iii) The related Cooperative Stock Certificate, representing
the related Cooperative Stock pledged with respect to such Cooperative
Loan, together with an undated stock power (or other similar
instrument) executed in blank;
(iv) The original recognition agreement by the Cooperative of
the interests of the mortgagee with respect to the related Cooperative
Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative
Loan as secured party, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement
and the Assignment of Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security
interest referenced in clause (vi) above showing an unbroken chain of
title from the originator to the Trustee, each with evidence of
recording thereof, evidencing the interest of the originator under the
Security Agreement and the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the
originator in the Security Agreement, Assignment of Proprietary Lease
and the recognition agreement referenced in clause (iv) above, showing
an unbroken chain of title from the originator to the Trustee; and
(ix) The original of each modification, assumption agreement
or preferred loan agreement, if any, relating to such Cooperative Loan.
E-2
EXHIBIT 2
---------
MORTGAGE LOAN SCHEDULE INFORMATION
----------------------------------
The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:
(a) the loan number;
(b) the Mortgagor's name;
(c) the city, state and zip code of the Mortgaged Property;
(d) the property type;
(e) the Mortgage Interest Rate;
(f) the Servicing Rate;
(g) the Net Rate;
(h) the original term;
(i) the maturity date;
(j) the stated remaining term to maturity;
(k) the original principal balance;
(1) the first payment date;
(m) the principal and interest payment in effect as of the Cut-off Date;
(n) the unpaid principal balance as of the Cut-off Date;
(o) the Loan-to-Value Ratio at origination;
(p) paid-through date;
(q) the insurer of any Primary Mortgage Insurance Policy;
(r) the Gross Margin, if applicable;
(s) the Maximum Lifetime Mortgage Rate, if applicable;
(t) the Minimum Lifetime Mortgage Rate, if applicable;
E-2-1
(u) the Periodic Rate Cap, if applicable;
(v) the number of days delinquent, if any;
(w) which Mortgage Loans adjust after an initial fixed-rate period of two,
three, five, seven or ten years;
(x) The Loan Group; and
(y) The Prepayment Charge Loans.
Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
E-2-2
EXHIBIT 3
---------
MORTGAGE LOAN SELLER'S INFORMATION
----------------------------------
All information in the Prospectus Supplement described under the
following Sections: "SUMMARY OF TERMS -- The Mortgage Pool," "DESCRIPTION OF THE
MORTGAGE LOANS" and "SCHEDULE A -- CERTAIN CHARACTERISTICS OF THE MORTGAGE
LOANS."
E-3
EXHIBIT 4
---------
PURCHASER'S INFORMATION
-----------------------
All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.
E-4
EXHIBIT 5
---------
SCHEDULE OF LOST NOTES
----------------------
Available Upon Request
E-5
EXHIBIT 6
---------
SCHEDULE OF PWS AGREEMENTS
--------------------------
[to be provided]*
*Available upon request.
E-6-1
SCHEDULE A
----------
REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
-----------------------------------------------
Public Certificates
Class S&P ▇▇▇▇▇'▇
----- --- -------
I-A.................................... AAA Aaa
II-A................................... AAA Aaa
M...................................... AA Aa2
The Class R-I, Class R-II, Class XP and Class B-IO have not been rated.
None of the above ratings has been lowered since the respective dates of such
letters.
A-1
SCHEDULE B
----------
MORTGAGE LOAN SCHEDULE
----------------------
[Provided upon request]
B-1