STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR
JPMORGAN CHASE BANK,
TRUSTEE
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
MASTER SERVICER AND SECURITIES ADMINISTRATOR
and
EMC MORTGAGE CORPORATION
SELLER AND COMPANY
--------------------------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2003
--------------------------------------------------------------------------------
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates
Series 2003-6
ARTICLE I
Definitions
ARTICLE II
Conveyance of Mortgage Loans; Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee...................................................36
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 Depositor...................................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.................................................50
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 The Company...............................................................................53
Section 3.20 UCC.......................................................................................53
Section 3.21 Optional Purchase of Defaulted Mortgage Loans.............................................54
i
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
ARTICLE V
Certificates
Section 5.01 Certificates..............................................................................61
Section 5.02 Registration of Transfer and Exchange of Certificates.....................................69
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.........................................72
Section 5.04 Persons Deemed Owners.....................................................................72
Section 5.05 Transfer Restrictions on Residual Certificates............................................72
Section 5.06 Restrictions on Transferability of Certificates...........................................74
Section 5.07 ERISA Restrictions........................................................................74
Section 5.08 Rule 144A Information.....................................................................75
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates.........................................................76
Section 6.02 Allocation of Losses......................................................................80
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
Section 6.07 Distributions on REMIC I Regulat Interests, REMIC II Regular
Interests and REMIC III Regular Interests.................................................85
ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer........................................................87
Section 7.02 Merger or Consolidation of the Master Servicer............................................87
Section 7.03 Indemnification of the Trustee, the Master Servicer and the Securities Administrator......87
ii
Section 7.04 Limitations on Liability of the Master Servicer and Others................................88
Section 7.05 Master Servicer Not to Resign.............................................................89
Section 7.06 Successor Master Servicer.................................................................89
Section 7.07 Sale and Assignment of Master Servicing...................................................89
ARTICLE VIII
Default
Section 8.01 Events of Default.........................................................................91
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................................................................94
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee.........................................................................95
Section 9.02 Certain Matters Affecting the Trustee and the Securities Administrator....................97
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.................................99
Section 9.05 Trustee's and Securities Administrator's Fees and Expenses................................99
Section 9.06 Eligibility Requirements for Trustee and Securities Administrator.........................99
Section 9.07 Insurance................................................................................100
Section 9.08 Resignation and Removal of the Trustee and Securities Administrator......................100
Section 9.09 Successor Trustee and Successor Securities Administrator.................................101
Section 9.10 Merger or Consolidation of Trustee or Securities Administrator...........................102
Section 9.11 Appointment of Co-Trustee or Separate Trustee............................................102
Section 9.12 Federal Information Returns and Reports to Certificateholders; REMIC Administration......103
ARTICLE X
Termination
▇▇▇▇▇▇▇ ▇▇.▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ by EMC or its Designee or Liquidation of the Mortgage Loans..106
Section 10.02 Additional Termination Requirements......................................................108
ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties........................................................................110
Section 11.02 Amendment................................................................................110
iii
Section 11.03 Recordation of Agreement.................................................................111
Section 11.04 Limitation on Rights of Certificateholders...............................................111
Section 11.05 Acts of Certificateholders...............................................................112
Section 11.06 Governing Law............................................................................113
Section 11.07 Notices..................................................................................113
Section 11.08 Severability of Provisions...............................................................114
Section 11.09 Successors and Assigns...................................................................114
Section 11.10 Article and Section Headings.............................................................114
Section 11.11 Counterparts.............................................................................114
Section 11.12 Notice to Rating Agencies................................................................114
APPENDIX
Appendix 1 - Calculation of Class Y Principal Reduction Amount
EXHIBITS
Exhibit A-1 - Form of Class A Certificates
Exhibit A-2 - Form of Class M, ▇-▇, ▇-▇, ▇-▇ Certificates
Exhibit A-3 - Form of Class ▇-▇, ▇-▇, ▇-▇ Certificates
Exhibit A-4 - Form of Class R Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - [Reserved]
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit G - Form of Custodial Agreement
Exhibit H-1 - Alliance Servicing Agreement
Exhibit H-2 - Countrywide Servicing Agreement
Exhibit I - Assignment Agreement
Exhibit J - Mortgage Loan Purchase Agreement
iv
POOLING AND SERVICING AGREEMENT
-------------------------------
Pooling and Servicing Agreement dated as of December 1, 2003, among
Structured Asset Mortgage Investments II Inc., a Delaware corporation, as
depositor (the "Depositor"), 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, as
seller (in such capacity, the "Seller") and as company (in such capacity, the
"Company").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor acquired the Mortgage
Loans from the Seller. On the Closing Date, the Depositor 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.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC II to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC II Regular Interests will be designated
"regular interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC III to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC III Regular Certificates will be designated
"regular interests" in such REMIC.
The Class R Certificate will evidence ownership of the "residual
interest" in each REMIC.
The Group I 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 $79,278,478.56. The Group II 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 $368,608,980. The Group III
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
$18,694,582.14. The Group IV 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 $18,759,708.96.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Securities Administrator, the Seller, the
Company and the Trustee agree as follows:
1
ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan,
as applicable, either (x) those customary mortgage servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to a Servicer), or
(y) as provided in the 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 and the Protected Account as the context may require.
Accrued Certificate Interest: For any Certificate (other than the Class
R Certificates) for any Distribution Date, the interest accrued during the
related Interest Accrual Period at the applicable Pass-Through Rate on the
Current Principal Amount, or Notional Amount in the case of any Interest Only
Certificate, of such Certificate immediately prior to such Distribution Date, on
the basis of a 360-day year consisting of twelve 30-day months, less (i) in the
case of a Senior Certificate, such Certificate's share of any Net Interest
Shortfall from the related Mortgage Loans and, after the CrossOver Date, the
interest portion of any Realized Losses on the related Mortgage Loans, in each
case allocated thereto in accordance with Section 6.02(g) and (ii) in the case
of a Subordinate Certificate, such Certificate's share of any Net Interest
Shortfall from the related Mortgage Loans and the interest portion of any
Realized Losses on the related Mortgage Loans, in each case allocated thereto in
accordance with Section 6.02(g).
Affiliate: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
Aggregate Expense Rate: With respect to any Mortgage Loan, the sum of
the Servicing Fee Rate and the Lender-Paid PMI Rate (if applicable).
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
Alliance: Alliance Mortgage Company, and any successor thereto.
Alliance Servicing Agreement: The Subservicing Agreement, dated as of
January 1, 2002, between Alliance Mortgage Company and EMC attached hereto as
Exhibit H-1.
▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: With respect to any
Distribution Date, the sum of the Subordinate Optimal Principal Amounts for all
Loan Groups for such Distribution Date.
Allocable Share: With respect to any Class of Subordinate Certificates
and any Distribution Date, an amount equal to the product of (i) the Aggregate
Subordinate Optimal Principal Amount and (ii) the fraction, the numerator of
which is the Current Principal Amount of such Class and the denominator of which
is the aggregate Current Principal Amount of all Classes of the Subordinate
Certificates; provided, however, that no Class of Subordinate Certificates
(other Class M Certificates, or if the Class M Certificates are no longer
outstanding, the class of Class B Certificates with the lowest numerical
designation) shall be entitled on any Distribution Date to receive distributions
pursuant to clauses (ii), (iii) and (v) of the definition of Subordinate Optimal
Principal Amount unless the related Class Prepayment Distribution Trigger for
such Distribution Date has been satisfied (any amount distributable pursuant to
clauses (ii), (iii) and (v) of the definition of Subordinate Optimal Principal
Amount shall be distributed among the Classes entitled thereto, pro rata based
on their respective Current Principal Amounts); provided, further, that if on a
Distribution Date, the Current Principal Amount of any Class of Subordinate
Certificates for which the related Class Prepayment Distribution Trigger has
been satisfied is reduced to zero, such Class's remaining Allocable Share shall
be distributed to the remaining Classes of Subordinate Certificates which
satisfy the related Class Prepayment Distribution Trigger and to the Class M
Certificates (or if the Class M Certificates are no longer outstanding, the
outstanding Class of Class B Certificates with the lowest numerical designation)
in reduction of their respective Current Principal Amounts, first to the Class M
Certificates and then to the Class B Certificates in the order of their
numerical Class designations.
Applicable Credit Rating: For any long-term deposit or security, a
credit rating of AAA in the case of S&P or Aaa in the case of Moody's (or with
respect to investments in money market funds, a credit rating of "AAAm" or
"AAAm-G" in the case of S&P and the highest rating given by Moody's for money
market funds in the case of Moody's). For any short-term deposit or security, or
a rating of A-l+ in the case of S&P or Prime-1 in the case of Moody's.
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 Depositor, or (ii) written notice from the
appropriate taxing authority as to the applicability of such state law.
Appraised Value: For any Mortgaged Property related to a Mortgage Loan,
the amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
Assignment Agreement: The agreement attached hereto as Exhibit I,
whereby the Servicing Agreement was assigned to the Trustee for the benefit of
the Certificateholders.
Assumed Final Distribution Date: December 26, 2033, or if such day is
not a Business Day, the next succeeding Business Day.
3
Available Funds: With respect to any Distribution Date and a Loan
Group, an amount equal to the aggregate of the following amounts with respect to
the Mortgage Loans in the related Loan Group: (a) all previously undistributed
payments on account of principal (including the principal portion of Scheduled
Payments, Principal Prepayments and the principal portion of Net Liquidation
Proceeds) and all previously undistributed payments on account of interest
received after the Cut-off Date and on or prior to the related Determination
Date, (b) any Monthly Advances and Compensating Interest Payments by the
Servicer or the Master Servicer with respect to such Distribution Date, (c) any
reimbursed amount in connection with losses on investments of deposits in an
account and (d) any amount allocated from the Available Funds of another Loan
Group in accordance with Section 6.01(a)(i)(F) under, except:
(i) all payments that were due on or before the Cut-off Date;
(ii) all Principal Prepayments and Liquidation Proceeds received
after the applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or dates subsequent
to the related Due Date;
(iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which, and to the extent that,
there are any unreimbursed Monthly Advances;
(v) amounts representing Monthly Advances determined to be
Nonrecoverable Advances;
(vi) any investment earnings on amounts on deposit in the Master
Servicer Collection Account and the Distribution Account and amounts permitted
to be withdrawn from the Master Servicer Collection Account and the Distribution
Account pursuant to this Agreement;
(vii) amounts needed to pay the Servicing Fees or to reimburse any
Servicer or the Master Servicer for amounts due under the Servicing Agreement
and the Agreement to the extent such amounts have not been retained by, or paid
previously to, such Servicer or the Master Servicer;
(viii) amounts applied to pay any fees with respect to any
lender-paid primary mortgage insurance policy; and
(ix) any expenses or other amounts reimbursable to the Trustee,
the Securities Administrator, the Master Servicer and the Custodian pursuant to
Section 7.04(c) or Section 9.05.
Average Loss Severity Percentage: With respect to any Distribution Date
and each Loan Group, the percentage equivalent of a fraction, the numerator of
which is the sum of the Loss Severity Percentages for each Mortgage Loan in such
Loan Group which had a Realized Loss and the denominator of which is the number
of Mortgage Loans in the related Loan Group which had Realized Losses.
4
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified in 11 ▇.▇.▇.▇▇.▇▇. 101-1330.
Bankruptcy Loss: With respect to any Mortgage Loan, any Deficient
Valuation or Debt Service Reduction related to such Mortgage Loan as reported by
the Servicer to the Master Servicer.
Book-Entry Certificates: Initially, all Classes of Certificates other
than the Private Certificates and the Residual Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange or Federal Reserve is closed or on
which banking institutions in the jurisdiction in which the Trustee, 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 through March 31, April 1 through June 30,
July 1 through September 30, or October 1 through December 31, as applicable.
Certificate: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibits ▇-▇, ▇-▇, ▇-▇ and
A-4 with the blanks therein appropriately completed.
Certificate Group: With respect to Loan Group I, the Group I
Certificates, with respect to Loan Group II, the Group II Certificates, with
respect to Loan Group III, the Group III Certificates, and, with respect to Loan
Group IV, the Group IV Certificates.
Certificate Owner: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificateholder: A Holder of a Certificate.
Class: With respect to the Certificates, any of Class I-A-1, Class
I-X-A-1, Class I-A-2, Class I-X-A-2, Class II-A-1, Class II-X-A-1, Class II-A-2,
Class II-A-X-2, Class III-A, Class IV-A, Class R, Class M, Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5, Class B-6.
Class A Certificates: The Class I-A-1, Class I-X-A-1, Class I-A-2,
Class I-X-A-2, Class II-A-1, Class II-X-A-1, Class II-A-2, Class II-A-X-2, Class
III-A and Class IV-A.
Class M Certificates: The Class M Certificates.
Class Prepayment Distribution Trigger: For a Class of Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied if the fraction (expressed as a percentage), the numerator
of which is the aggregate Current Principal Amount of such Class and each Class
of Subordinate Certificates, respectively, subordinate thereto, if any, and the
denominator of which is the Scheduled Principal Balance of all of the Mortgage
5
Loans as of the related Due Date, equals or exceeds such percentage calculated
as of the Closing Date.
Class R Certificate: Any one of the Class R Certificates substantially
in the form annexed hereto as Exhibit A-4 and evidencing ownership of interests
designated as "residual interests" in REMIC I, REMIC II and REMIC III for
purposes of the REMIC Provisions. Component I of the Class R Certificates is
designated as the sole class of "residual interest" in REMIC I, Component II of
the Class R Certificates is designated as the sole class of "residual interest"
in REMIC II and Component III of the Class R Certificates is designated as the
sole class of "residual interest" in REMIC III.
Class R Deposit: The $100 deposit into the Distribution Account by the
Depositor on the Closing Date to pay the Class R Certificates in accordance with
Section 6.01(a) on the Distribution Date occurring in January 2004.
Class Y Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of the Class Y Regular
Interests will be reduced on such Distribution Date by the allocation of
Realized Losses and the distribution of principal, determined as described in
Appendix I
Class Y Regular Interests: The Class Y-1, Class Y-2, Class Y-3 and
Class Y-4 Regular Interests.
Class Y-1 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class Y-1 Regular Interest on such Distribution Date.
Class Y-1 Principal Reduction Amount: The Class Y Principal Reduction
Amount for the Class Y-1 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Y-1 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Y-2 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class Y-2 Regular Interest on such Distribution Date.
Class Y-2 Principal Reduction Amount: The Class Y Principal Reduction
Amount for the Class Y-2 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Y-2 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Y-3 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-3 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class Y-3 Regular Interest on such Distribution Date.
6
Class Y-3 Principal Reduction Amount: The Class Y Principal Reduction
Amount for the Class Y-3 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Y-3 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Y-4 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-4 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class Y-4 Regular Interest on such Distribution Date.
Class Y-4 Principal Reduction Amount: The Class Y Principal Reduction
Amount for the Class Y-4 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Y-4 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Z Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of the Class Z Regular
Interests will be reduced on such Distribution Date by the allocation of
Realized Losses and the distribution of principal, which shall be in each case
the excess of (A) the sum of (x) the excess of the REMIC I Available
Distribution Amount for the related Group (i.e. the "related Group" for the
Class Z-1 Regular Interest is the Group I Loans, the "related Group" for the
Class Z-2 Regular Interest is the Group II Loans, the "related Group" for the
Class Z-3 Regular Interest is the Group III Loans and the "related Group" for
the Class Z-4 Regular Interest is the Group IV Loans) over the sum of the
amounts thereof distributable (i) in respect of interest on such Class Z Regular
Interest and the related Class Y Regular Interest, (ii) to such Class Z Regular
Interest and the related Class Y Regular Interest pursuant to clause (c)(ii) of
the definition of "REMIC I Distribution Amount" and (iii) in the case of the
Group I Loans, to the Class R Residual Interest and (y) the amount of Realized
Losses allocable to principal for the related Group over (B) the Class Y
Principal Reduction Amount for the related Group.
Class Z Regular Interests: The Class Z-1, Class Z-2, Class Z-3 and
Class Z-4 Regular Interests.
Class Z-1 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Z-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class Z-1 Regular Interest on such Distribution Date.
Class Z-1 Principal Reduction Amount: The Class Z Principal Reduction
Amount for the Class Z-1 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Z-1 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Z-2 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Z-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class Z-2 Regular Interest on such Distribution Date.
7
Class Z-2 Principal Reduction Amount: The Class Z Principal Reduction
Amount for the Class Z-2 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Z-2 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Z-3 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Z-3 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class Z-3 Regular Interest on such Distribution Date.
Class Z-3 Principal Reduction Amount: The Class Z Principal Reduction
Amount for the Class Z-3 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Z-3 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Z-4 Principal Distribution Amount: For any Distribution Date, the
sum of (A) the excess, if any, of the Class Z-4 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses allocated
to the Class Z-4 Regular Interest on such Distribution Date.
Class Z-4 Principal Reduction Amount: The Class Z Principal Reduction
Amount for the Class Z-4 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Z-4 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Closing Date: December 23, 2003.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest Payment: As defined in Section 6.06.
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/Global Debt, Bear ▇▇▇▇▇▇▇ ALT-A Trust
2003-6. For the purpose of registration and transfer and exchange only, the
Corporate Trust Office shall be located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇, Attn: ITS Transfer Department.
Countrywide: Countrywide Home Loans, Inc., and its successor in
interest.
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 April 1, 1998, between RWT Holdings, Inc. and
Countrywide, each as attached hereto as Exhibit H-2.
8
Cross-Over Date: The first Distribution Date on which the aggregate
Current Principal Amount of the Subordinate Certificates has been reduced to
zero.
Current Principal Amount: With respect to any Certificate (other than
an Interest Only Certificate) as of any Distribution Date, the initial principal
amount of such Certificate, and reduced by (i) all amounts distributed on
previous Distribution Dates on such Certificate with respect to principal, (ii)
the principal portion of all Realized Losses (other than Realized Losses
resulting from Debt Service Reductions) allocated prior to such Distribution
Date to such Certificate, taking account of the Loss Allocation Limitation and
(iii) in the case of a Subordinate Certificate, such Certificate's pro rata
share, if any, of the applicable Subordinate Certificate Writedown Amount for
previous Distribution Dates. With respect to any Class of Certificates (other
than an Interest Only Certificate), the Current Principal Amount thereof will
equal the sum of the Current Principal Amounts of all Certificates in such
Class. The initial Current Principal Amount for each Class of Certificates is
set forth in Section 5.01(c)(iv). Notwithstanding the foregoing, solely for
purposes of giving consents, directions, waivers, approvals, requests and
notices, the Class R Certificates after the Distribution Date on which the
principal thereof has been paid in full shall be deemed to have a Current
Principal Amount equal to the Current Principal Amount thereof on the day
immediately preceding such Distribution Date.
Custodial Agreement: An agreement, dated as of the Closing Date among
the Depositor, 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: December 1, 2003.
Cut-off Date Balance: $485,341,750.
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.
Depositor: Structured Asset Mortgage Investments II Inc., a Delaware
corporation, or its successors in interest.
Depository: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.
Depository Agreement: The meaning specified in Section 5.01(a) hereof.
9
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank, mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the
Determination Date as defined in the Servicing Agreement.
Disqualified Organization: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the ▇▇▇▇▇▇▇ Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an ownership interest in a Residual Certificate by such Person
may cause any 2003-6 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 II Inc.,
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates, Series 2003-6 -
Distribution Account." The Distribution Account shall be an Eligible Account.
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.
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Due Date: With respect to each Mortgage Loan, the date in each month on
which its Scheduled Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the Servicing Agreement.
Due Period: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month preceding the month
in which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1 or better by Standard & Poor's and P-1 by Moody's at the
time of any deposit therein or (B) insured by the FDIC (to the limits
established by such Corporation), the uninsured deposits in which account are
otherwise secured such that, as evidenced by an Opinion of Counsel (obtained by
the Person requesting that the account be held pursuant to this clause (i))
delivered to the Trustee prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in such account
and a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments, each of which shall mature not later
than the Business Day immediately preceding the Distribution Date next following
the date of investment in such collateral or the Distribution Date if such
Permitted Investment is an obligation of the institution that maintains the
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 Certificates then rated by the
Rating Agencies). Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation, and any successor thereto.
Event of Default: As defined in Section 8.01.
Excess Liquidation Proceeds: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
▇▇▇▇▇▇ ▇▇▇: Federal National Mortgage Association and any successor
thereto.
FDIC: Federal Deposit Insurance Corporation and any successor thereto.
Final Certification: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.
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Fractional Undivided Interest: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount, or Notional
Amount in the case of the Interest Only Certificates, of such Certificate and
the denominator of which is the Current Principal Amount, or Notional Amount in
the case of the Interest Only Certificates, of such Class. With respect to the
Certificates in the aggregate, the fractional undivided interest evidenced by
(i) a Residual Certificate will be deemed to equal 1.0%, (ii) each Interest Only
Certificate will be deemed to equal 1.0% multiplied by a fraction, the numerator
of which is the Notional Amount of such Certificate and the denominator of which
is the aggregate Notional Amount of such respective Class and (iii) a
Certificate of any other Class will be deemed to equal 95.00% multiplied by a
fraction, the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the aggregate Current Principal
Amount of all the Certificates; provided, however, the percentage in clause
(iii) above shall be increased by 4.0% upon the retirement of each Class of
Interest Only Certificates.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac, formerly the Federal Home Loan Mortgage
Corporation, and any successor thereto.
Global Certificate: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such depository).
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth
in the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the minimum and maximum Mortgage Interest Rate
and the Periodic Rate Cap) the Mortgage Interest Rate until the next Interest
Adjustment Date.
Group I Certificates: Class I-A-1, Class I-X-A-1, Class I-A-2 and Class
I-X-A-2 Certificates.
Group I Loans: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
Group II Certificates: The Class II-A-1, Class II-X-A-1, Class II-A-2
and Class II-X-A-2 Certificates.
Group II Loans: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
Group III Certificates: Class III-A Certificates.
Group III Loans: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
Group IV Certificates: Class IV-A Certificates.
Group IV Loans: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
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Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Sections 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 Depositor, the Master Servicer or the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Fractional Undivided Interest evidenced thereby shall not be taken into account
in determining whether the requisite percentage of Fractional Undivided
Interests necessary to effect any such consent has been obtained.
Indemnified Persons: The Trustee, the 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 Depositor or the Master
Servicer and of any Affiliate of the Depositor or the Master Servicer, (b) does
not have any direct financial interest or any material indirect financial
interest in the Depositor or the Master Servicer or any Affiliate of the
Depositor or the Master Servicer and (c) is not connected with the Depositor or
the Master Servicer or any Affiliate as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
Individual Certificate: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
Institutional Accredited Investor: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.
Insurance Policy: With respect to any Mortgage Loan, any standard
hazard insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse insured expenses.
Interest Accrual Period: With respect to each Distribution Date, for
each Class of Certificates, the calendar month preceding the month in which such
Distribution Date occurs.
Interest Adjustment Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.
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Interest Only Certificates: The Class I-X-A-1, Class I-X-A-2, Class
II-X-A-1 and Class II-X-A-2 Certificates.
Interest Shortfall: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:
(a) Partial principal prepayments received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the amount of such prepayment and (ii) the amount of
interest for the calendar month of such prepayment (adjusted to the applicable
Net Rate) received at the time of such prepayment;
(b) Principal prepayments in full received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the Scheduled Principal Balance of such Mortgage Loan
immediately prior to such prepayment and (ii) the amount of interest for the
calendar month of such prepayment (adjusted to the applicable Net Rate) received
at the time of such prepayment; and
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan, the
excess of (i) 30 days' interest (or, in the case of a principal prepayment in
full, interest to the date of prepayment) on the Scheduled Principal Balance
thereof (or, in the case of a principal prepayment in part, on the amount so
prepaid) at the related Net Rate over (ii) 30 days' interest (or, in the case of
a principal prepayment in full, interest to the date of prepayment) on such
Scheduled Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the annual interest rate required to be paid by the
Mortgagor as limited by application of the Relief Act.
Interim Certification: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.
Investment Letter: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private Certificates in
connection with such purchase, substantially in the form set forth as Exhibit
F-1 hereto.
Lender-Paid PMI Rate: With respect to each Mortgage Loan covered by a
lender-paid primary mortgage insurance policy, the amount payable to the related
insurer, as stated in the Mortgage Loan Schedule.
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 Master Servicer or the Servicer has certified that such
Mortgage Loan has become a Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer or the Servicer in
14
connection with the liquidation of such Mortgage Loan and the related Mortgage
Property, such expenses including (a) property protection expenses, (b) property
sales expenses, (c) foreclosure and sale costs, including court costs and
reasonable attorneys' fees, and (d) similar expenses reasonably paid or incurred
in connection with liquidation.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise.
Loan Group: Loan Group I, Loan Group II, Loan Group III or Loan Group
IV, as applicable.
Loan Group I: The group of Mortgage Loans designated as belonging to
Loan Group I on the Mortgage Loan Schedule.
Loan Group II: The group of Mortgage Loans designated as belonging to
Loan Group II on the Mortgage Loan Schedule.
Loan Group III: The group of Mortgage Loans designated as belonging to
Loan Group III on the Mortgage Loan Schedule.
Loan Group IV: The group of Mortgage Loans designated as belonging to
Loan Group IV on the Mortgage Loan Schedule.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
Loss Allocation Limitation: The meaning specified in Section 6.02(c)
hereof.
Loss Severity Percentage: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan and the denominator of which is the
Scheduled Principal Balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.
Lost Notes: The original Mortgage Notes that have been lost, as
indicated on the Mortgage Loan Schedule.
Master Servicer: As of the Closing Date, ▇▇▇▇▇ Fargo Bank Minnesota,
National Association and, thereafter, its respective successors in interest that
meet the qualifications of the Servicing Agreements and this Agreement.
Master Servicer Certification: A written certification covering
servicing of the Mortgage Loans by the 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
15
▇▇▇▇▇▇▇▇-▇▇▇▇▇ 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
Depositor 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 II Inc., Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through
Certificates, Series 2003-6, Collection Account." The Master Servicer Collection
Account shall be an Eligible Account.
Master Servicing Compensation: The meaning specified in Section 3.14.
Material Defect: The meaning specified in Section 2.02(a).
Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgage Loans
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 Servicer pursuant to the 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.
16
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 initially 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, with respect to each Mortgage 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 December 23, 2003, between EMC, as seller, and Structured Asset
Mortgage Investments II Inc., as purchaser, and all amendments thereof and
supplements thereto, attached as Exhibit J.
Mortgage Loan Schedule: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgaged Property: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Interest Shortfall: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the Servicer or the Master Servicer in accordance with the Servicing
Agreement or this Agreement and (ii) unreimbursed advances by the Servicer or
the Master Servicer and Monthly Advances.
Net Rate: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the Aggregate Expense Rate (expressed as a
per annum rate).
Non-Offered Subordinate Certificates: The Class B-4, Class B-5 and
Class B-6 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
17
Proceeds or future payments on the Mortgage Loan for which such advance or
Monthly Advance was made or is proposed to be made.
Notional Amount: The Notional Amount of the Class I-X-A-1 Certificates,
as of any date of determination, is equal to the Current Principal Amount of the
Class I-A-1 Certificates. The Notional Amount of the Class I-X-A-2 Certificates,
as of any date of determination, is equal to the Current Principal Amount of the
Class I-A-2 Certificates. The Notional Amount of the Class II-X-A-1
Certificates, as of any date of determination, is equal to the Current Principal
Amount of the Class II-A-1 Certificates. The Notional Amount of the Class
II-X-A-2 Certificates, as of any date of determination, is equal to the Current
Principal Amount of the Class II-A-2 Certificates.
Offered Certificates: The Class I-A-1, Class I-X-A-1, Class I-A-2,
Class I-X-A-2, Class II-A-1, Class II-X-A-1, Class II-A-2, Class II-A-X-2, Class
III-A, Class IV-A, Class R, Class M, Class B-1, Class B-2 and Class B-3
Certificates.
Offered Subordinate Certificates: The Class ▇-▇, Class B-2 and Class
B-3 Certificates.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer or
the Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for the Company, the
Master Servicer or the Depositor.
Optional Termination Date: The Distribution Date on which the aggregate
Scheduled Principal Balance of the Mortgage Loans is less than 10% of the
Cut-off Date Balance.
Original Subordinate Principal Balance: The sum of the aggregate
Current Principal Amounts of each Class of Subordinate Certificates as of the
Closing Date.
Original Value: The lesser of (i) the Appraised Value or (ii) 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 Depositor.
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.
18
Pass-Through Rate: As to each Class of Certificates, the REMIC I
Regular Interests, REMIC II Regular Interests and REMIC III Regular Interests,
the rate of interest determined as provided with respect thereto, in Section
5.01(c). Any monthly calculation of interest at a stated rate shall be based
upon annual interest at such rate divided by twelve.
Periodic Rate Cap: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely payment of
which are fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States of America or any state thereof (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
19
than one year after the date of issuance thereof) having the Applicable Credit
Rating or better from each Rating Agency at the time of such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance
company or other corporation or entity;
(vii) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency as evidenced
in writing by each Rating Agency to the Trustee; and
(viii) any money market or common trust fund having the Applicable
Credit Rating or better from each Rating Agency, including any such fund for
which the Trustee or 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.
Plan: The meaning specified in Section 5.07(a).
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related Security Instrument, if any or any
replacement policy therefor through the related Interest Accrual Period for such
Class relating to a Distribution Date.
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
20
Insurance Proceeds and Repurchase Proceeds, but excluding the principal portion
of Net Liquidation Proceeds.
Private Certificates: The Class B-4, Class B-5 or Class B-6
Certificate.
Protected Account: An account established and maintained for the
benefit of Certificateholders by the Servicer with respect to the related
Mortgage Loans and with respect to REO Property pursuant to the Servicing
Agreement.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
Qualified Insurer: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
Rating Agencies: ▇▇▇▇▇'▇ and S&P.
Realized Loss: Any (i) Bankruptcy Loss or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation, less (y) the related Net
Liquidation Proceeds with respect to such Mortgage Loan and the related Mortgage
Property.
Realized Losses on the Mortgage Loans shall be allocated to the REMIC I
Regular Interests as follows: (1) The interest portion of Realized Losses and
Net Interest Shortfalls on the Group I Loans, if any, shall be allocated between
the Class Y-1 and Class Z-1 Regular Interests pro rata according to the amount
of interest accrued but unpaid thereon, in reduction thereof; (2) the interest
portion of Realized Losses and Net Interest Shortfalls on the Group II Loans, if
any, shall be allocated between the Class Y-2 and Class Z-2 Regular Interests
pro rata according to the amount of interest accrued but unpaid thereon, in
reduction thereof; (3) the interest portion of Realized Losses and Net Interest
Shortfalls on the Group III Loans, if any, shall be allocated between the Class
Y-3 and Class Z-3 Regular Interests pro rata according to the amount of interest
accrued but unpaid thereon, in reduction thereof; and (4) the interest portion
of Realized Losses and Net Interest Shortfalls on the Group IV Loans, if any,
shall be allocated between the Class Y-4 and Class Z-4 Regular Interests pro
rata according to the amount of interest accrued but unpaid thereon, in
reduction thereof. Any interest portion of such Realized Losses in excess of the
amount allocated pursuant to the preceding sentence shall be treated as a
principal portion of Realized Losses not attributable to any specific Mortgage
Loan in such Group and allocated pursuant to the succeeding sentences. The
principal portion of Realized Losses with respect to the Mortgage Loans shall be
allocated to the REMIC I Regular Interests as follows: (1) the principal portion
of Realized Losses on the Group I Loans shall be allocated, first, to the Class
Y-1 Regular Interest to the extent of the Class Y-1 Principal Reduction Amount
in reduction of the Uncertificated Principal Balance of such Regular Interest
and, second, the remainder, if any, of such principal portion of such Realized
Losses shall be allocated to the Class Z-1 Regular Interest in reduction of the
Uncertificated Principal Balance thereof; (2) the principal portion of Realized
Losses on the Group II Loans shall be allocated, first, to the Class Y-2 Regular
Interest to the extent of the Class Y-2 Principal Reduction Amount in reduction
of the Uncertificated Principal Balance of such Regular Interest and, second,
the remainder, if any,
21
of such principal portion of such Realized Losses shall be allocated to the
Class Z-2 Regular Interest in reduction of the Uncertificated Principal Balance
thereof; (3) the principal portion of Realized Losses on the Group III Loans
shall be allocated, first, to the Class Y-3 Regular Interest to the extent of
the Class Y-3 Principal Reduction Amount in reduction of the Uncertificated
Principal Balance of such Regular Interest and, second, the remainder, if any,
of such principal portion of such Realized Losses shall be allocated to the
Class Z-3 Regular Interest in reduction of the Uncertificated Principal Balance
thereof; and (4) the principal portion of Realized Losses on the Group IV Loans
shall be allocated, first, to the Class Y-4 Regular Interest to the extent of
the Class Y-4 Principal Reduction Amount in reduction of the Uncertificated
Principal Balance of such Regular Interest and, second, the remainder, if any,
of such principal portion of such Realized Losses shall be allocated to the
Class Z-4 Regular Interest in reduction of the Uncertificated Principal Balance
thereof. For any Distribution Date, reductions in the Uncertificated Principal
Balances of the Class Y and Class Z Regular Interest pursuant to this definition
of Realized Loss shall be determined, and shall be deemed to occur, prior to any
reductions of such Uncertificated Principal Balances by distributions on such
Distribution Date.
Record Date: For each Class of Certificates, 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).
Related Class: (a) The Classes of Certificates and REMIC II Regular
Interests shall be treated as "Related Classes" as set forth in the following
chart.
REMIC II
REGULAR INTEREST RELATED CERTIFICATES
---------------- --------------------
▇-▇-▇-▇ ▇-▇-▇, ▇-▇-▇-▇
▇-▇-▇-▇ ▇-▇-▇, I-X-A-2
A-II-1-M II-A-1, II-X-A-1
A-II-2-M II-A-2, II-X-A-2
A-III-M III-A
A-IV-M IV-A
M-M M
B-1-M B-1
B-2-M B-2
B-3-M B-3
B-4-M B-4
B-5-M B-5
B-6-M B-6
22
(b) The Class of Certificates and REMIC III Regular Interests of the
same designation shall be treated as Related Classes.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended, or similar state law.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Administrator: The Trustee; provided that if the REMIC
Administrator is found by a court of competent jurisdiction to no longer be able
to fulfill its obligations as REMIC Administrator under this Agreement the
Servicer or Trustee acting as Servicer shall appoint a successor REMIC
Administrator, subject to assumption of the REMIC Administrator obligations
under this Agreement.
REMIC Interest: Any of REMIC I Interests, REMIC II Interests and REMIC
III Interests.
REMIC Opinion: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause any 2003-6 REMIC to fail to qualify as a REMIC while any regular interest
in such 2003-6 REMIC is outstanding, (ii) result in a tax on prohibited
transactions with respect to any 2003-6 REMIC or (iii) constitute a taxable
contribution to any 2003-6 REMIC after the Startup Day.
REMIC Provisions: The provisions of the federal income tax law relating
to REMICs, which appear at Sections 860A through 860G of the Code, and related
provisions and regulations promulgated thereunder, as the foregoing may be in
effect from time to time.
REMIC Regular Interest: Any of REMIC I Regular Interests, REMIC II
Regular Interests and REMIC III Regular Interests.
REMIC I: The segregated pool of assets, with respect to which a REMIC
election is made pursuant to this Agreement, consisting of:
(a) the Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(b) all payments on and collections in respect of the Mortgage Loans
due after the Cut-off Date as shall be on deposit in the Master Servicer
Collection Account or in the Distribution Account and identified as belonging to
the Trust Fund,
(c) property that secured a Mortgage Loan and that has been acquired
for the benefit of the Certificateholders by foreclosure or deed in lieu of
foreclosure,
23
(d) the hazard insurance policies and Primary Mortgage Insurance
Policy, if any, and
(e) all proceeds of clauses (a) through (d) above.
REMIC I Available Distribution Amount: For each Loan Group for any
Distribution Date, the Available Funds for such Loan Group.
REMIC I Distribution Amount: For any Distribution Date, the REMIC I
Available Distribution Amount shall be distributed to the REMIC I Regular
Interests and the Class R Residual Interest in the following amounts and
priority:
(a) To the extent of the REMIC I Available Distribution Amount for Loan
Group I:
(i) first, to Class Y-1 and Class Z-1 Regular Interests and
Component I of the Class R Certificates, concurrently, the
Uncertificated Interest for such Classes remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of
such unpaid amounts;
(ii) second, to the Class Y-1 and Class Z-1 Regular Interests
and Component I of the Class R Certificates, concurrently, the
Uncertificated Interest for such Classes for the current Distribution
Date, pro rata according to their respective Uncertificated Interest;
(iii) third, to Component I of the Class R Certificates, until
the Uncertificated Principal Balance thereof has been reduced to zero;
and
(iv) fourth, to the Class Y-1 and Class Z-1 Regular Interests,
the Class Y-1 Principal Distribution Amount and the Class Z-1 Principal
Distribution Amount, respectively.
(b) To the extent of the REMIC I Available Distribution Amount for Loan
Group II:
(i) first, to the Class Y-2 and Class Z-2 Regular Interests,
concurrently, the Uncertificated Interest for such Classes remaining
unpaid from previous Distribution Dates, pro rata according to their
respective shares of such unpaid amounts;
(ii) second, to the Class Y-2 and Class Z-2 Regular Interests,
concurrently, the Uncertificated Interest for such Classes for the
current Distribution Date, pro rata according to their respective
Uncertificated Interest; and
(iii) third, to the Class Y-2 and Class Z-2 Regular Interests,
the Class Y-2 Principal Distribution Amount and the Class Z-2 Principal
Distribution Amount, respectively.
(c) To the extent of the REMIC I Available Distribution Amount for Loan
Group III:
24
(i) first, to the Class Y-3 and Class Z-3 Regular Interests,
concurrently, the Uncertificated Interest for such Classes remaining
unpaid from previous Distribution Dates, pro rata according to their
respective shares of such unpaid amounts;
(ii) second, to the Class Y-3 and Class Z-3 Regular Interests,
concurrently, the Uncertificated Interest for such Classes for the
current Distribution Date, pro rata according to their respective
Uncertificated Interest; and
(iii) third, to the Class Y-3 and Class Z-3 Regular Interests,
the Class Y-3 Principal Distribution Amount and the Class Z-3 Principal
Distribution Amount, respectively.
(d) To the extent of the REMIC I Available Distribution Amount for Loan
Group IV:
(i) first, to the Class Y-4 and Class Z-4 Regular Interests,
concurrently, the Uncertificated Interest for such Classes remaining
unpaid from previous Distribution Dates, pro rata according to their
respective shares of such unpaid amounts;
(ii) second, to the Class Y-4 and Class Z-4 Regular Interests,
concurrently, the Uncertificated Interest for such Classes for the
current Distribution Date, pro rata according to their respective
Uncertificated Interest; and
(iii) third, to the Class Y-4 and Class Z-4 Regular Interests,
the Class Y-4 Principal Distribution Amount and the Class Z-4 Principal
Distribution Amount, respectively.
(e) To the extent of the REMIC I Available Distribution Amounts for
Loan Group I, Loan Group II, Loan Group III and Loan Group IV for such
Distribution Date remaining after payment of the amounts pursuant to paragraphs
(a), (b), (c) and (d) of this definition of "REMIC I Distribution Amount":
(i) first, to each Class of Class Y and Class Z Regular
Interests, pro rata according to the amount of unreimbursed Realized
Losses allocable to principal previously allocated to each such Class;
provided, however, that any amounts distributed pursuant to this
paragraph (e)(i) of this definition of "REMIC I Distribution Amount"
shall not cause a reduction in the Uncertificated Principal Balances of
any of the Class Y and Class Z Regular Interests; and
(ii) second, to the Component I of the Class R Certificates,
the Residual Distribution Amount for Component I of the Class R
Certificates for such Distribution Date.
REMIC I Interest: The REMIC I Regular Interests and Component I of the
Class R Certificates.
REMIC I Regular Interest: Any of the eight separate non-certificated
beneficial ownership interests in REMIC I set forth in Section 5.01(c) and
issued hereunder and designated as a "regular interest" in REMIC I. Each REMIC I
Regular Interest shall accrue interest at the
25
Uncertificated Pass-Through Rate specified for such REMIC I Interest in Section
5.01(c), 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 Section 5.01(c). The
designations for the respective REMIC I Regular Interests are set forth in
Section 5.01(c).
REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I Regular Interests and any proceeds thereof.
REMIC II Interests: The REMIC II Regular Interests.
REMIC II Regular Interests: As defined in Section 5.01(c).
REMIC III: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC II Regular Interests and any proceeds
thereof.
REMIC III Interests: The REMIC III Regular Interests and the Class R
Certificates.
REMIC III Regular Interests: As defined in Section 5.01(c).
REO Property: A Mortgaged Property acquired in the name of the Trustee,
for the benefit of Certificateholders, by foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Seller pursuant
to the Mortgage Loan Purchase Agreement or Article II of this 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 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, plus (c) any unreimbursed
Monthly Advances and servicing advances payable to the Servicer of the Mortgage
Loan or to the Master Servicer 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.
Repurchase Proceeds: the Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Seller and any cash deposit in connection
with the substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto
as Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.
Residual Certificates: The Class R Certificates.
26
Responsible Officer: Any officer assigned to the Corporate Trust Office
(or any successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement, and any other officer
of the Trustee to whom a matter arising hereunder may be referred.
Rule 144A Certificate: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate) which
is a Qualified Institutional Buyer as defined under Rule 144A promulgated under
the Securities Act, substantially in the form set forth as Exhibit F-2 hereto.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.,
and its successors in interest.
Scheduled Payment: With respect to any Mortgage Loan and any Due
Period, the scheduled payment or payments of principal and interest due during
such Due Period on such Mortgage Loan which either is payable by a Mortgagor in
such Due Period under the related Mortgage Note or, in the case of REO Property,
would otherwise have been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Scheduled Principal Balance: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (taking account of the principal
payment to be made on such Due Date and irrespective of any delinquency in its
payment), as specified in the amortization schedule at the time relating thereto
(before any adjustment to such amortization schedule by reason of any bankruptcy
or similar proceeding occurring after the Cut-off Date (other than a Deficient
Valuation) or any moratorium or similar waiver or grace period) and less (ii)
any Principal Prepayments (including the principal portion of Net Liquidation
Proceeds) received during or prior to the related Prepayment Period; provided
that the Scheduled Principal Balance of a Liquidated Mortgage Loan is zero.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: ▇▇▇▇▇ 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"),
27
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 OR (2) 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 (A
"PLAN") THAT 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 (THE "CODE"), or by a person using "PLAN assets" of a Plan,
UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL
FOR THE BENEFIT OF THE TRUSTEE, MASTER SERVICER AND THE SECURITIES ADMINISTRATOR
AND ON WHICH THEY MAY RELY WHICH IS SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE OF THIS 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, 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 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: EMC, as mortgage loan seller under the Mortgage Loan Purchase
Agreement.
Senior Certificates: The Class I-A-1, Class I-X-A-1, Class I-A-2, Class
I-X-A-2, Class II-A-1, Class II-X-A-1, Class II-A-2, Class II-X-A-2, Class III-A
and Class IV-A Certificates.
Senior Optimal Principal Amount: With respect to each Distribution Date
and a Certificate Group, an amount equal to the sum, without duplication, of the
following (but in no event greater than the aggregate Current Principal Amounts
of the related Certificate Group immediately prior to such Distribution Date):
(i) the related Senior Percentage of the principal portion of
all Scheduled Payments due on each Outstanding Mortgage Loan in the related Loan
Group on the related Due
28
Date as specified in the amortization schedule at the time applicable thereto
(after adjustments for previous Principal Prepayments but before any adjustment
to such amortization schedule by reason of any bankruptcy or similar proceeding
or any moratorium or similar waiver or grace period if the related Distribution
Date occurs prior to the Cross-over Date);
(ii) the related Senior Prepayment Percentage of the Scheduled
Principal Balance of Mortgage Loan in the related Loan Group which was the
subject of a Principal Prepayment in full received by the Master Servicer during
the related Prepayment Period;
(iii) the related Senior Prepayment Percentage of amount of
all Principal Prepayments in part allocated to principal received by the Master
Servicer during the related Prepayment Period in respect to each Mortgage Loan
in the related Loan Group;
(iv) the lesser of (a) the related Senior Prepayment
Percentage of the sum of (A) all Net Liquidation Proceeds allocable to principal
received in respect of each Mortgage Loan in the related Loan Group that became
a Liquidated Mortgage Loan during the related Prepayment Period (other than
Mortgage Loans described in the immediately following clause (B)) and (B) the
Scheduled Principal Balance of each such Mortgage Loan purchased by an insurer
from the Trust during the related Prepayment Period pursuant to the related
Primary Mortgage Insurance Policy, if any, or otherwise and (b) the related
Senior Percentage of the sum of (A) the Scheduled Principal Balance of each
Mortgage Loan in the related Loan Group which became a Liquidated Mortgage Loan
during the related Prepayment Period (other than the Mortgage Loans described in
the immediately following clause (B)) and (B) the Scheduled Principal Balance of
each such Mortgage Loan that was purchased by an insurer from the Trust during
the related Prepayment Period pursuant to the related Primary Mortgage Insurance
Policy, if any or otherwise;
(v) any amount allocated to the Available Funds of the related
Loan Group pursuant to Section 6.01(a)(i)(F); and
(vi) the related Senior Prepayment Percentage of the sum of
(a) the Scheduled Principal Balance of each Mortgage Loan in the related Loan
Group that was repurchased by the Seller in connection with such Distribution
Date and (b) the excess, if any, of the Scheduled Principal Balance of a
Mortgage Loan in the related Loan Group that has been replaced by the Seller
with a substitute Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement
in connection with such Distribution Date over the Scheduled Principal Balance
of such substitute Mortgage Loan.
Senior Percentage: -- With respect to each Certificate Group, initially
90.00%. With respect to any Distribution Date and a Certificate Group, the
lesser of (i) 100% and (ii) the percentage (carried to six places rounded up)
obtained by dividing the aggregate Current Principal Amount of the Senior
Certificates in such Certificate Group immediately preceding such Distribution
Date by the aggregate Scheduled Principal Balance of the Mortgage Loans in the
related Loan Group as of the beginning of the related Due Period.
Senior Prepayment Percentage: With respect to a Certificate Group and
any Distribution Date occurring during the periods set forth below, as follows:
29
Period (dates inclusive) Senior Prepayment Percentage
-------------------------------------------------------------------------
January 25, 2004 - December 26, 2010 100%
January 25, 2011 - December 26, 2011 Senior Percentage for the related Certificate Group plus 70% of the Subordinate
Percentage for the related Loan Group.
January 25, 2012 - December 26, 2012 Senior Percentage for the related Certificate Group plus 60% of the Subordinate
Percentage for the related Loan Group.
January 25, 2013 - December 26, 2013 Senior Percentage for the related Certificate Group plus 40% of the Subordinate
Percentage for the related Loan Group.
January 25, 2014 - December 26, 2014 Senior Percentage for the related Certificate Group plus 20% of the Subordinate
Percentage for the related Loan Group.
January 25, 2015 and thereafter Senior Percentage for the related Certificate Group
In addition, no reduction of the Senior Prepayment Percentage shall
occur on any Distribution Date unless, as of the last day of the month preceding
such Distribution Date, (A) the aggregate Scheduled Principal Balance of the
Mortgage Loans in all Loan Groups delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and Mortgage Loans with respect
to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the sum of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 50%;
and (B) cumulative Realized Losses on the Mortgage Loans in all Loan Groups do
not exceed (a) 30% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2011 and December 2011,
(b) 35% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including January 2012 and December 2012, (c) 40% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including January 2013 and December 2013, (d) 45% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including January 2014 and December 2014, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
January 2015.
In addition, if on any Distribution Date the weighted average of the
Subordinate Percentages is equal to or greater than two times the weighted
average of the initial Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans for all Loan Groups delinquent 60 days
or more (including for this purpose any such Mortgage Loans in foreclosure and
such Mortgage Loans with respect to which the related Mortgaged Property has
been acquired by the Trust), averaged over the last six months, as a percentage
of the aggregate Current Principal Amount of the Subordinate Certificates does
not exceed 50% and (b)(i) on or prior to the Distribution Date in December 2006,
cumulative Realized Losses on the Mortgage Loans for all Loan Groups as of the
end of the related Prepayment Period do not exceed 20% of the Original
Subordinate Principal Balance and (ii) after the Distribution Date in December
2006 cumulative Realized Losses on the Mortgage Loans in the related Loan Group
as of the end of the related Prepayment Period do not exceed 30% of the Original
Subordinate Principal Balance, then, the Senior Prepayment Percentage for such
Distribution Date will equal the Senior Percentage for the related Loan Group;
provided, however, if on such Distribution Date the
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Subordinate Percentage is equal to or greater than two times the initial
Subordinate Percentage on or prior to the Distribution Date occurring in
December 2006 and the above delinquency and loss tests are met, then the Senior
Prepayment Percentage for the related Loan Group for such Distribution Date will
equal the related Senior Percentage plus 50% of the related Subordinate
Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Senior
Percentage for a Certificate Group exceeds the Senior Percentage as of the
Cut-Off Date, the Senior Prepayment Percentage for such Certificate Group for
such Distribution Date will equal 100%. On the Distribution Date on which the
aggregate Current Principal Amount of the Senior Certificates in the related
Certificate Group is reduced to zero, the Senior Prepayment Percentage for the
related Certificate Group shall be the minimum percentage sufficient to effect
such reduction and thereafter shall be zero.
Servicer: Alliance, and its permitted successors and assigns.
Servicer Remittance Date: With respect to each Mortgage Loan, the date
set forth in the Servicing Agreement.
Servicing Agreement: Each of the Alliance Servicing Agreement and the
Countrywide Servicing Agreement.
Servicing Fee: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Scheduled Principal Balance of such Mortgage
Loan as of the Due Date in the preceding calendar month and (ii) the Servicing
Fee Rate.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as set
forth in the Mortgage Loan Schedule.
Servicing Officer: The President or a Vice President or Assistant Vice
President or other authorized officer of the Master Servicer having direct
responsibility for the administration of this Agreement, and any other
authorized officer of the Master Servicer to whom a matter arising hereunder may
be referred.
Startup Day: December 23, 2003.
Subordinate Certificate Writedown Amount: With respect to the
Subordinate Certificates and as to any Distribution Date, the amount by which
(i) the sum of the Current Principal Amounts of the Certificates (after giving
effect to the distribution of principal and the allocation of applicable
Realized Losses in reduction of the Current Principal Amounts of the
Certificates on such Distribution Date) exceeds (y) the aggregate Scheduled
Principal Balances of the Mortgage Loans on the Due Date related to such
Distribution Date.
Subordinate Certificates: The Class M, Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates.
Subordinate Optimal Principal Amount: With respect to any Distribution
Date and any Loan Group, an amount equal to the sum, without duplication, of the
following (but in no event
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greater than the aggregate Current Principal Amount of the Subordinate
Certificates immediately prior to such Distribution Date):
(i) the related Subordinate Percentage of the principal portion of all
Scheduled Payments due on each Outstanding Mortgage Loan in the related Loan
Group on the related Due Date as specified in the amortization schedule at the
time applicable thereto (after adjustment for previous Principal Prepayments but
before any adjustment to such amortization schedule by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace period);
(ii) the related Subordinate Prepayment Percentage of the Scheduled
Principal Balance of each Mortgage Loan in the related Loan Group that was the
subject of a Principal Prepayment in full received by the Master Servicer during
the related Prepayment Period;
(iii) the related Subordinate Prepayment Percentage of the amount of
all Principal Prepayments in part received by the Master Servicer in respect to
the Mortgage Loan in the related Loan Group during the related Prepayment
Period;
(iv) the excess, if any, of (a) all Net Liquidation Proceeds allocable
to principal received during the related Prepayment Period in respect of each
Liquidated Mortgage Loan in the related Loan Group over (b) the sum of the
amounts distributable to the Senior Certificates pursuant in the related
Certificate Group to clause (iv) of the definition of Senior Optimal Principal
Amount on such Distribution Date;
(v) the related Subordinate Prepayment Percentage of the sum of (a) the
Scheduled Principal Balance of each Mortgage Loan in the related Loan Group that
was purchased by the Seller in connection with such Distribution Date and (b)
the difference, if any, between the Scheduled Principal Balance of a Mortgage
Loan in the related Loan Group that has been replaced by the Seller with a
Substitute Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement in
connection with such Distribution Date over the Scheduled Principal Balance of
such Substitute Mortgage Loan; and
(vi) on the Distribution Date on which the Current Principal Amounts of
the Senior Certificates in the related Certificate Group have all been reduced
to zero, 100% of the Senior Optimal Principal Amount for the related Loan Group.
After the aggregate Current Principal Amount of the Subordinate Certificates has
been reduced to zero, the Subordinate Optimal Principal Amount shall be zero.
Subordinate Percentage: With respect to a Loan Group on any
Distribution Date, 100% minus the Senior Percentage for the related Certificate
Group.
Subordinate Prepayment Percentage: With respect to a Loan Group on any
Distribution Date, 100% minus the Senior Prepayment Percentage for the related
Certificate Group.
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee
pursuant to the 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
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a Mortgage Interest Rate and Net Rate not less than, and not materially greater
than, such Mortgage Loan; (iii) which has a maturity date not materially earlier
or later than such Mortgage Loan and not later than the latest maturity date of
any Mortgage Loan; (iv) which is of the same property type and occupancy type as
such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the
Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment of
principal and interest as of the date of substitution; (vii) as to which the
payment terms do not vary in any material respect from the payment terms of the
Mortgage Loan for which it is to be substituted and (viii) which has a Gross
Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those
of such Mortgage Loan, has the same Index and interval between Interest
Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no
lower than that of such Mortgage Loan.
Substitution Adjustment Amount: The amount, if any, required to be paid
by the Mortgage Loan Seller to the Trustee for deposit in the Distribution
Account pursuant to Section 2.04 in connection with the substitution of a
Mortgage Loan.
Tax Administration and Tax Matters Person: The Securities Administrator
and any successor thereto or assignee thereof shall serve as tax administrator
hereunder and as agent for the Tax Matters Person. The Holder of the largest
percentage interest 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.
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.
2003-6 REMIC: Any of REMIC I, REMIC II and REMIC III.
Uncertificated 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, for purposes of the distributions,
Uncertificated Interest will be reduced by the interest portion of any Realized
Losses and Net Interest Shortfalls allocated, with respect to the REMIC I
Regular Interests, to such REMIC Regular Interests pursuant to the defintion of
Realized Losses and, with respect to the REMIC II Regular Interests and the
REMIC III Regular Interests, to the Related Classes of Certificates.
Uncertificated Pass-Through Rate: With respect to any Distribution Date
and REMIC Interest, the Pass-Through Rate of each such REMIC Interest set forth
in Section 5.01(c).
Uncertificated Principal Balance: The amount of any REMIC I Regular
Interest, REMIC II Regular Interest or REMIC III Regular Interest outstanding as
of any date of determination. As of the Closing Date, the Uncertificated
Principal Balance of each REMIC I
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Regular Interest shall equal the amount set forth in the Section 5.01(c)(i)
hereto as its Initial Uncertificated Principal Balance. On each Distribution
Date, the Uncertificated Principal Balance of each REMIC I Regular Interest
shall be reduced by the sum of (i) the principal portion of Realized Losses
allocated to the REMIC I Regular Interests in accordance with the definition of
Realized Loss and (ii) the amounts deemed distributed on each Distribution Date
in respect of principal on the REMIC I Regular Interests pursuant to Section
6.07. As of the Closing Date, the Uncertificated Principal Balance of each REMIC
II Regular Interest shall equal the amount set forth in the Section 5.01(c)
hereto as its Initial Uncertificated Principal Balance. On each Distribution
Date, the Uncertificated Principal Balance of each REMIC II Regular Interest
shall be reduced by the sum of (i) the portion of Realized Losses allocated in
reduction of the Current Principal Balances of the Related Classes of
Certificates on such Distribution Date and (ii) the amounts deemed distributed
on each Distribution Date in respect of principal on the REMIC II Regular
Interests pursuant to Section 6.07. The Uncertificated Principal Balance of each
REMIC II Regular Interest shall never be less than zero. As of the Closing Date,
the Uncertificated Principal Balance of each REMIC III Regular Interest shall
equal the amount set forth in Section 5.01(c) as its Initial Uncertificated
Principal Balance. On each Distribution Date, the Uncertificated Principal
Balance of each REMIC III Regular Interest shall be reduced, first, by the
portion of Realized Losses allocated in reduction of the Current Principal
Balances of the Related Classes of Certificates on such Distribution Date and,
second, by all distributions of principal made on such Related Classes of
Certificates on such Distribution Date.
Undercollateralized Amount: With respect any Certificate Group and
Distribution Date, the excess of (i) the aggregate Current Principal Balance of
such Certificate Group over (ii) the aggregate Scheduled Principal Balance of
the Mortgage Loans in the related Loan Group.
Undercollateralized Certificate Group: With respect any Distribution
Date, a Certificate Group for which the related Undercollateralized Amount
(calculated on such Distribution Date after giving effect to distributions to be
made thereon (other than amounts to be distributed pursuant to Section
6.01(a)(i)(G) on such Distribution Date)) exceeds zero.
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 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
34
prescribed in regulations by the Secretary of the Treasury, which have not yet
been issued, a trust which was in existence on August 20, 1996 (other than a
trust treated as owned by the grantor under subpart E of part I of subchapter J
of chapter 1 of the Code), and which was treated as a United States person on
August 20, 1996 may elect to continue to be treated as a United States person
notwithstanding the previous sentence.
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ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee. (a) The Depositor
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, (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 Section 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 Agreement, (viii) the Class R Deposit
and (ix) any proceeds of the foregoing. Although it is the intent of the parties
to this Agreement that the conveyance of the Depositor'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 Depositor shall be deemed to have granted
to the Trustee a first priority perfected security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans and
other assets in the Trust Fund, and that this Agreement shall constitute a
security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Seller
hereby deposits with the Trustee or the Custodian, as its agent, with respect to
each Mortgage Loan:
(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) 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 (w) 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 (w) in the proviso below
applies or for Mortgage Loans with respect to which the related Mortgaged
Property is located in a state other than Maryland, Tennessee, South Carolina,
36
Mississippi and Florida, 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 Depositor with evidence of
recording thereon,
(v) the original or a copy of the policy or certificate of primary
mortgage guaranty insurance, to the extent available, if any,
(vi) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title insurance, and
(vii) originals of all modification agreements, if applicable and
available.
provided, however, that in lieu of the foregoing, the Depositor may deliver the
following documents, under the circumstances set forth below: (w) 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 Depositor in time to permit their delivery as specified
above, the Depositor may deliver a true copy thereof with a certification by the
Depositor, 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"; (x) 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 Depositor
to such effect) the Depositor 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 (y) the
Depositor shall not be required to deliver intervening assignments or Mortgage
Note endorsements between the Seller 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 Depositor, 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 Depositor
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 Depositor shall
cause the Seller, at its expense, to cause each assignment of the Security
Instrument to the Trustee to be recorded not later than 180 days after the
Closing Date, unless (a) such recordation is not required by the Rating Agencies
or an Opinion of Counsel addressed to the Trustee 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 the 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
37
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.
Section 2.02 Acceptance of Mortgage Loans by Trustee. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust Fund to it by the
Depositor 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 or the Custodian, as
its agent, 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 delivery to the Depositor and
the Trustee of 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 Depositor
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 has not been executed or
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 Seller. In accordance
with the Mortgage Loan Purchase Agreement, the 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 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 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 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
38
been returned by the applicable jurisdiction, the Seller shall not be required
to purchase such Mortgage Loan if the 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 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 Seller shall instead deliver a recording receipt of such
recording office or, if such receipt is not available, a certificate confirming
that such documents have been accepted for recording, and delivery to the
Trustee or the Custodian, as its agent, shall be effected by the 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 Depositor 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 a Material Defect, the Trustee or the
Custodian, as its agent, shall promptly notify the Seller (provided, however,
that with respect to those documents described in Sections 2.01(b)(iv), (v) and
(vii), the Trustee's and Custodian's obligations shall extend only to the
documents actually delivered to the Trustee or the Custodian pursuant to such
Sections). In accordance with the Mortgage Loan Purchase Agreement, the 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 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 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, however, 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, further, that
if such defect relates solely to the inability of the 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 Seller shall not be required to
purchase such Mortgage Loan, if the 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 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 Seller shall instead deliver a recording receipt of such
recording office or, if such receipt is not available, a certificate confirming
that such documents have been accepted for recording, and delivery to the
Trustee or the Custodian, as its agent, shall be effected by the Seller within
thirty days of its receipt of the original recorded document.
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Sections 2.02(a) or (b) above, the Seller shall remit to the
Master Servicer the Repurchase Price
39
for deposit in the Master Servicer Collection Account and the Seller shall
provide to the Securities Administrator and the Trustee written notification
detailing the components of the Repurchase Price. Upon deposit of the Repurchase
Price in the Master Servicer Collection Account, the Depositor shall notify the
Trustee and the Custodian, as agent of the Trustee (upon receipt of a Request
for Release in the form of Exhibit D attached hereto with respect to such
Mortgage Loan), shall release to the Seller the related Mortgage File and the
Trustee shall execute and deliver all instruments of transfer or assignment,
without recourse, representation or warranty, furnished to it by the Seller, as
are necessary to vest in the Seller title to and rights under the Mortgage Loan.
Such purchase shall be deemed to have occurred on the date on which the
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 Depositor in a form agreed to between the Depositor 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 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 Depositor 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 the Depositor's rights and
obligations pursuant to the Servicing Agreements (noting that the 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 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 Depositor 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 Depositor, 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 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 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 Seller to the extent not
required by law to be paid to the borrower.) Any such purchase by the Seller
shall be made by providing an amount equal to the Repurchase Price to the Master
Servicer for deposit in
40
the Master Servicer Collection Account and written notification detailing the
components of such Repurchase Price. The Depositor 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 Seller the related Mortgage File and the Trustee shall execute and
deliver all instruments of transfer or assignment furnished to it by the Seller,
without recourse, representation or warranty as are necessary to vest in the
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 Seller to purchase (or
substitute a Substitute Mortgage Loan for) any Mortgage Loan or any property
acquired with respect thereto (or pay the Repurchase Price as set forth in the
above proviso) as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this Agreement, the Seller may, no later than the date by which such purchase by
the Seller would otherwise be required, tender to the Trustee a Substitute
Mortgage Loan accompanied by a certificate of an authorized officer of the
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
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 Section 2.02(a). Within two Business Days after such
notification, the 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 the 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 Seller of the Repurchase Price for the purchase of a
Mortgage Loan by the Seller. After such notification to the 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
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the 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 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 the Custodian as agent
of the Trustee, as applicable, of a Request for Release for such Mortgage Loan),
the Trustee or the Custodian, as agent for the Trustee, shall release to the
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 Seller title to and rights under any Mortgage
Loan released pursuant to the Mortgage Loan Purchase Agreement or Section 2.04
of this Agreement, as applicable. The Seller shall deliver the documents related
to the Substitute Mortgage Loan in accordance with the provisions of the
Mortgage Loan Purchase Agreement or Sections 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 Sections. The representations and warranties set forth in the Mortgage
Loan Purchase Agreement shall be deemed to have been made by the Seller with
respect to each Substitute Mortgage Loan as of the date of acceptance of such
Mortgage Loan by the Trustee. The Master Servicer shall amend the Mortgage Loan
Schedule to reflect such substitution and shall provide a copy of such amended
Mortgage Loan Schedule to the Trustee and the Rating Agencies.
Section 2.05 Issuance of Certificates.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans
and the other assets comprising the Trust Fund and, concurrently therewith, has
signed, and countersigned and delivered to the Depositor, in exchange therefor,
Certificates in such authorized denominations representing such Fractional
Undivided Interests as the Depositor has requested. The Trustee agrees that it
will hold the Mortgage Loans and such other assets as may from time to time be
delivered to it segregated on the books of the Trustee in trust for the benefit
of the Certificateholders.
(b) The Depositor, 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 Depositor in
and to the REMIC II Regular Interests, and the other assets of REMIC III for the
benefit of the holders of the REMIC III Certificates. The Trustee acknowledges
receipt of the REMIC II Regular Interests (which are uncertificated) and the
other assets of REMIC III and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC III
Certificates.
Section 2.06 Representations and Warranties Concerning the Depositor.
The Depositor hereby represents and warrants to the Trustee, the Master Servicer
and the Securities Administrator as follows:
(i) the Depositor (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,
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except where the failure so to qualify would not reasonably be expected to have
a material adverse effect on the Depositor's business as presently conducted or
on the Depositor's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(ii) the Depositor 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 Depositor of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Depositor; 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 Depositor or its properties
or the articles of incorporation or by-laws of the Depositor, except those
conflicts, breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Depositor's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;
(iv) the execution, delivery and performance by the Depositor 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
Depositor and, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid and binding obligation of the Depositor
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 Depositor, threatened against the Depositor, 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 Depositor will be determined
adversely to the Depositor and will if determined adversely to the Depositor
materially and adversely affect the Depositor's ability to enter into this
Agreement or perform its obligations under this Agreement; and the Depositor 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 Depositor 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. 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 Agreements 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 its 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 pursuant to the
applicable Servicing Agreements.
The Trustee shall furnish the Servicers and the Master Servicer with
any powers of attorney and other documents in form as provided to it necessary
or appropriate to enable the Servicers and the Master Servicer to service and
administer the related Mortgage Loans and REO Property.
The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; provided, however, that, unless otherwise required by
law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.
The Trustee shall execute and deliver to the 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
44
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 2003-6
REMIC shall exist, the Trustee and the Securities Administrator shall act in
accordance herewith to assure continuing treatment of such 2003-6 REMIC as a
REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Depositor, 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 addressed to the Trustee prepared at the expense of the
Trust Fund; and (b) other than with respect to a substitution pursuant to the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, accept any contribution to any 2003-6 REMIC after the Startup Day
without receipt of a REMIC Opinion addressed to the Trustee.
Section 3.03 Monitoring of Servicers. (a) The Master Servicer
shall be responsible for reporting to the Trustee and the Depositor 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 (or similar document signed
by an officer 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 Depositor and the Trustee thereof and the Master Servicer shall issue
such notice or take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or to
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.
(c) To the extent that the costs and expenses of the Master
Servicer related to any termination of a Servicer, appointment of a successor
Servicer or the transfer and assumption of
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servicing by the Master Servicer with respect to any Servicing Agreement
(including, without limitation, (i) all legal costs and expenses and all due
diligence costs and expenses associated with an evaluation of the potential
termination of the Servicer as a result of an event of default by such Servicer
and (ii) all costs and expenses associated with the complete transfer of
servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account.
(d) The Master Servicer shall require each Servicer to comply with
the remittance requirements and other obligations set forth in the related
Servicing Agreement.
(e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces.
Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the Servicing Agreement, as applicable; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 3.03, shall not permit any Servicer to) knowingly or intentionally
take any action, or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, would cause any 2003-6 REMIC 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
would not cause any 2003-6 REMIC to fail to qualify as a REMIC or result in the
imposition of a tax upon any 2003-6 REMIC. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney
46
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 (or if
the Servicer does not, the Master Servicer may), promptly furnish to the
Custodian, on behalf of the Trustee, two copies of a certification substantially
in the form of Exhibit D hereto signed by a Servicing Officer or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Protected Account maintained by
the applicable Servicer pursuant to Section 4.01 or by the applicable Servicer
pursuant to its Servicing Agreement have been or will be so deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of the Trustee, shall promptly release the
related Mortgage File to the applicable Servicer and the Trustee and Custodian
shall have no further responsibility with regard to such Mortgage File. Upon any
such payment in full, each Servicer is authorized, to give, as agent for the
Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no
47
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of a Servicer or the Master Servicer, and delivery to the Custodian, on
behalf of the Trustee, of two copies of a request for release signed by a
Servicing Officer substantially in the form of Exhibit D (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File held in
its possession or control to the Servicer or the Master Servicer, as applicable.
Such trust receipt shall obligate the Servicer or the Master Servicer to return
the Mortgage File to the Custodian on behalf of the Trustee, when the need
therefor by the Servicer or the Master Servicer no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of a Servicing Officer similar to that hereinabove specified, the Mortgage File
shall be released by the Custodian, on behalf of the Trustee, to the Servicer or
the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall, and (to the
extent provided in the applicable Servicing Agreement) shall cause each Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any time upon reasonable request
and during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
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(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to maintain
or cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreements. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, under any insurance policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the
applicable Servicing Agreement) shall be deposited into the Master Servicer
Collection Account, subject to withdrawal pursuant to Section 4.02 and 4.03. Any
cost incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Section 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of the
Trustee and the Certificateholders all claims under the Insurance Policies and
take such actions (including the negotiation, settlement, compromise or
enforcement of the insured's claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to a Servicer and remitted to the Master Servicer) in respect of such policies,
bonds or contracts shall be promptly deposited in the Master Servicer Collection
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration 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).
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Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the Master
Servicer or such Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause each Servicer (to the
extent required under the related Servicing Agreement) to keep in force and
effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain
such insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each Servicer
(to the extent required under the related Servicing Agreement) to present, on
behalf of the Trustee and the Certificateholders, claims to the insurer under
any Primary Mortgage Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01 and 4.02, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.03.
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall
retain possession and custody of the originals (to the extent available) of any
Primary Mortgage Insurance Policies, or certificate of insurance if applicable,
and any certificates of renewal as to the foregoing as may be issued from time
to time as contemplated by this Agreement. Until all amounts distributable in
respect of the Certificates have been distributed in full and the Master
Servicer otherwise has fulfilled its obligations under this Agreement, the
Trustee (or its Custodian, if any, as directed by the Trustee) shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee (or the Custodian, as directed
by the Trustee), upon the execution or receipt thereof the originals of any
Primary Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall cause each Servicer (to the extent required under the related
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no
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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 Distribution Account and the Master Servicer
Collection Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any prepayment premium or penalty) shall be retained by the applicable Servicer
and shall not be deposited in the Protected Account. The Master Servicer 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.
(a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" (unless such result would maximize the Trust
Fund's after-tax return on such property) or cause such REO Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code.
(b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.
(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master
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Servicer and the applicable Servicer as provided above shall be deposited in the
Protected Account on or prior to the Determination Date in the month following
receipt thereof and be remitted by wire transfer in immediately available funds
to the Master Servicer for deposit into the related Master Servicer Collection
Account on the next succeeding Servicer Remittance Date.
Section 3.16 Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before 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.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
Section 3.17 Annual Independent Accountant's Servicing Report. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Depositor 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 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
52
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 Certificateholders for such Distribution Date as an
exhibit thereto. Prior to January 30 of each year, the Securities Administrator
shall, in accordance with industry standards and only if instructed by the
Depositor, file a Form 15 Suspension Notice with respect to the Trust Fund, if
applicable. Prior to (i) March 15, 2004 and (ii) unless and until a Form 15
Suspension Notice shall have been filed, prior to March 15 of each year
thereafter, the Master Servicer shall provide the Securities Administrator with
a Master Servicer Certification, together with a copy of the annual independent
accountant's servicing report and annual statement of compliance of 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 Depositor
hereby grants to the Securities Administrator a limited power of attorney to
execute and file each such document on behalf of the Depositor. Such power of
attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement 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
Depositor in connection with any additional filings with respect to the Trust
Fund as the Depositor deems necessary under the Securities Exchange Act of 1934,
as amended (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.
Section 3.19 The Company. On the Closing Date, the Company will receive
from the Depositor a payment of $5,000.
Section 3.20 UCC. The Depositor 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
Depositor. The Trustee agrees to monitor and notify the
53
Depositor if any continuation statements for such Uniform Commercial Code
financing statements need to be filed. If directed by the Depositor in writing,
the Trustee will file any such continuation statements solely at the expense of
the Depositor. The Depositor 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.
(a) With respect to any Mortgage Loan which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, the Company shall have the right to purchase such Mortgage Loan from
the Trust at a price equal to the Repurchase Price; provided however (i) that
such Mortgage Loan is still 90 days or more delinquent or is an REO Property as
of the date of such purchase and (ii) this purchase option, if not theretofore
exercised, shall terminate on the date prior to the last day of the related
Calendar Quarter. This purchase option, if not exercised, shall not be
thereafter reinstated unless the delinquency is cured and the Mortgage Loan
thereafter again becomes 90 days or more delinquent or becomes an REO Property,
in which case the option shall again become exercisable as of the first day of
the related Calendar Quarter.
(b) If at any time the Company 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 the Company 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 the Company at
the request of the Company without recourse, representation or warranty and the
Company 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. The Company
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 by 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 shall mature, or shall 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 its
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 such Servicer pursuant to its Servicing
Agreement which were due during or before the related Due Period, net of the
amount thereof comprising its Servicing Fee or any fees with respect to any
lender-paid primary mortgage insurance policy;
55
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by such Servicer with respect to the Mortgage Loans in the related
Prepayment Period, with interest to the date of prepayment or liquidation, net
of the amount thereof comprising its Servicing Fee;
(iii) Partial Principal Prepayments received by such Servicer for
the Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly 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
collections 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 Seller pursuant to the Mortgage Loan Purchase Agreement or
Sections 2.02 or 2.03 hereof, any amounts which are to be treated pursuant to
Section 2.04 of this Agreement as the payment of a Repurchase Price in
connection with the tender of a Substitute Mortgage Loan by the Seller, the
Repurchase Price with respect to any Mortgage Loans purchased by the Company
pursuant to Section 3.21, and all proceeds of any Mortgage Loans or property
acquired with respect thereto repurchased by the Depositor or its designee
pursuant to Section 10.01;
(v) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer and required to be deposited in the Master Servicer Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account
shall be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in
56
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 Sections 4.05(a)(i) through (iv) and (vi) through (xii) with
respect to the Securities Administrator and the Master Servicer, need not be
credited by the Master Servicer or the Servicer to the Distribution Account or
the Master Servicer Collection Account, as applicable. In the event that the
Master Servicer shall deposit or cause to be deposited to the Distribution
Account any amount not required to be credited thereto, the Trustee, upon
receipt of a written request therefor signed by a Servicing Officer of the
Master Servicer, shall promptly transfer such amount to the Master Servicer, any
provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection
Account may be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments 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 Account from time to time shall be for
the account of the Master Servicer. The Master Servicer from time to time shall
be permitted to withdraw or receive distribution of any and all investment
earnings from the Master Servicer Account. The risk of loss of moneys required
to be distributed to the Certificateholders resulting from such investments
shall be borne by and be the risk of the Master Servicer. The Master Servicer
shall deposit the amount of any such loss in the Master Servicer Collection
Account within two Business Days of receipt of notification of such loss but not
later than the second Business Day prior to the Distribution Date on which the
moneys so invested are required to be distributed to the Certificateholders.
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account. (a) The Master Servicer will, from time to time on
demand of a Servicer or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the related Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 10.01 and
remove amounts from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (i) any 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.
(c) In addition, on or before each Distribution Account Deposit Date,
the Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.
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(d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all Available Funds on deposit
in the Master Servicer Collection Account with respect to the related
Distribution Date to the Trustee for deposit in the Distribution Account.
Section 4.04 Distribution Account. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Distribution Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by
the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the
Trust Fund segregated on the books of the Trustee and held by the Trustee in
trust in its Corporate Trust Office, and the Distribution Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Trustee or
the Master Servicer (whether made directly, or indirectly through a liquidator
or receiver of the Trustee or the Master Servicer). The Distribution Account
shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) held in cash and 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
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those not withdrawn from the Master Servicer Collection Account in accordance
with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Servicer for any
Monthly Advance of its own funds, 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 with respect to 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 Section 4.05(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 the Master Servicer or such
Servicer would have been entitled to receive under clause (ix) of this Section
4.05(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 the Master Servicer or such
Servicer would have been entitled to receive under clause (ix) of this Section
4.05(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 clause 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
59
Mortgage Loan if the Monthly Advance or advance has not been reimbursed pursuant
to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 3.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections 3.03,
7.04(c) and (d);
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by the
Servicer;
(xi) to reimburse or pay any Servicer any such amounts as are due
thereto under the Servicing Agreement and have not been retained by or paid to
the Servicer, to the extent provided in the 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 clauses (i) through (vi)
and (viii) or with respect to any such amounts which would have been covered by
such clauses had the amounts not been retained by the Master Servicer without
being deposited in the Distribution Account under Section 4.02(b).
Reimbursements made pursuant to clauses (vii), (ix), (xi) and (xii) will be
allocated between the Loan Groups pro rata based on the aggregate Stated
Principal Balances of the Mortgage Loans in each Loan Group.
(c) On each Distribution Date, the Trustee shall distribute the
Available 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.
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ARTICLE V
Certificates
Section 5.01 Certificates. (a) The Depository, the Depositor 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 Section 5.01(b),
the Certificates shall at all times remain registered in the name of the
Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to a successor to the
Depository; (ii) ownership and transfers of registration of such Certificates on
the books of the Depository shall be governed by applicable rules established by
the Depository; (iii) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (iv) the Trustee shall
deal with the Depository as representative of such Certificate Owners of the
respective Class of Certificates for purposes of exercising the rights of
Certificateholders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; and (v) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.
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 Depositor 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 Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor within 30 days or (ii) the Depositor 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.
In addition, if an Event of Default has occurred and is continuing,
each Certificate Owner materially adversely affected thereby may at its option
request a definitive Certificate evidencing such Certificate Owner's interest in
the related Class of Certificates. In order to make such request, such
Certificate Owner shall, subject to the rules and procedures of the Depository,
provide the Depository or the related Depository Participant with directions for
the Trustee to
61
exchange or cause the exchange of the Certificate Owner's interest in such Class
of Certificates for an equivalent interest in fully registered definitive form.
Upon receipt by the Trustee of instructions from the Depository directing the
Trustee to effect such exchange (such instructions to contain information
regarding the Class of Certificates and the Current Principal Balance being
exchanged, the Depository Participant account to be debited with the decrease,
the registered holder of and delivery instructions for the definitive
Certificate, and any other information reasonably required by the Trustee), (i)
the Trustee shall instruct the Depository to reduce the related Depository
Participant's account by the aggregate Current Principal Balance of the
definitive Certificate, (ii) the Trustee shall execute and deliver, in
accordance with the registration and delivery instructions provided by the
Depository, a Definitive Certificate evidencing such Certificate Owner's
interest in such Class of Certificates and (iii) the Trustee shall execute a new
Book-Entry Certificate reflecting the reduction in the aggregate Current
Principal Balance of such Class of Certificates by the amount of the definitive
Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in
the delivery of any instructions required pursuant to this Section 5.01(b) and
may conclusively rely on, and shall be protected in relying on, such
instructions.
(c) (i) As provided herein, the REMIC Administrator will make an
election to treat the segregated pool of assets consisting of the Mortgage Loans
and certain other related assets subject to this Agreement as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC I." Component I of the Class R Certificates will represent
the sole Class of "residual interests" in REMIC I for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, pass-through rate (the "Uncertificated
Pass-Through Rate") and initial Uncertificated Principal Balance for each of the
"regular interests" in REMIC I (the "REMIC I Regular Interests"). The "latest
possible maturity date" (determined solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii)) for each REMIC I Regular Interest shall
be the Maturity Date. None of the REMIC I Regular Interests will be
certificated. The REMIC I Regular Interests and the REMIC I Residual Interest
will have the following designations, initial balances and pass-through rates:
62
Class Designation for
each REMIC I Regular
Interest and Initial
Component I of the Type of Uncertificated
Class R Certificates Interest Pass-Through Rate Principal Balance Final Maturity Date*
-------------------- -------- ----------------- ----------------- --------------------
Class Y-1 Regular Variable(1) $39,639.19 December 2033
Class Y-2 Regular Variable(2) $185,903.34 December 2033
Class Y-3 Regular Variable(3) $9,347.29 December 2033
Class Y-4 Regular Variable(4) $9,461.23 December 2033
Class Z-1 Regular Variable(1) $ 79,238,739.81 December 2033
Class Z-2 Regular Variable(2) $368,423,076.66 December 2033
Class Z-3 Regular Variable(3) $18,685,234.71 December 2033
Class Z-4 Regular Variable(4) $18,750,247.77 December 2033
Component I of the
Class R Residual Variable(1) $100.00 December 2033
* The Distribution Date in the specified month, which is the month following
the month the latest maturing Mortgage Loan in the related Loan Group
matures. For federal income tax purposes, for each Class of REMIC I Regular
and Residual Interests, the "latest possible maturity date" shall be the
Final Maturity Date.
(1) Interest distributed to the REMIC I Regular Interests Y-1 and Z-1 and the
Component I of the Class R Certificates on each Distribution Date will have
accrued at the weighted average of the Net Rates for the Group I Loans on
the applicable Uncertificated Principal Balance outstanding immediately
before such Distribution Date.
(2) Interest distributed to the REMIC I Regular Interests Y-2 and Z-2 on each
Distribution Date will have accrued at the weighted average of the Net
Rates for the Group II Loans on the applicable Uncertificated Principal
Balance outstanding immediately before such Distribution Date.
(3) Interest distributed to the REMIC I Regular Interests Y-3 and Z-3 on each
Distribution Date will have accrued at the weighted average of the Net
Rates for the Group III Loans on the applicable Uncertificated Principal
Balance outstanding immediately before such Distribution Date.
(4) Interest distributed to the REMIC I Regular Interests Y-4 and Z-4 on each
Distribution Date will have accrued at the weighted average of the Net
Rates for the Group IV Loans on the applicable Uncertificated Principal
Balance outstanding immediately before such Distribution Date.
(ii) REMIC II will be evidenced by (x) the REMIC II Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC II and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c)(ii) and (y) an interest in the Class R Certificates
("REMIC II Residual Interest"), which is hereby designated as the single
"residual interest" in REMIC II.
The REMIC II Regular Interests and the REMIC II Residual Interest will
have the following designations, initial balances and pass-through rates:
Class Designation for
each REMIC II Regular
Interest and Component II
of the Class R Type of Initial Uncertificated
Certificates Interest Pass-Through Rate Principal Balance Final Maturity Date*
------------ -------- ----------------- ----------------- --------------------
Class A-I-1-M Regular Variable(1) $47,825,000 December 2033
Class A-I-2-M Regular Variable(1) $23,525,600 December 2033
Class A-II-1-M Regular Variable(2) $50,000,000 December 2033
Class A-II-2-M Regular Variable(2) $281,748,000 December 2033
Class A-III-M Regular Variable(3) $16,825,100 December 2033
Class A-IV-1-M Regular Variable(4) $16,883,700 December 2033
Class M-M Regular Variable(5) $16,744,200 December 2033
Class B-1-M Regular Variable(5) $10,192,200 December 2033
Class B-2-M Regular Variable(5) $7,522,900 December 2033
Class B-3-M Regular Variable(5) $5,338,700 December 2033
Class B-4-M Regular Variable(5) $5,338,800 December 2033
Class B-5-M Regular Variable(5) $1,941,300 December 2033
Class B-6-M Regular Variable(5) $1,456,250 December 2033
Component II of the
Class R+ Residual ----- ----- December 2033
63
* The Distribution Date in the specified month, which is the month following
the month the latest maturing Mortgage Loan in the related Group matures.
For federal income tax purposes, for each Class of REMIC II Regular and
Residual Interests, the "latest possible maturity date" shall be the Final
Maturity Date.
(1) Interest distributed to the REMIC II Regular Interests A-I-1-M and A-I-2-M
on each Distribution Date will have accrued at the equal the weighted
average of the Net Rates of the Group I Loans on their respective
Uncertificated Principal Balances immediately preceding such Distribution
Date.
(2) Interest distributed to the REMIC II Regular Interests A-II-1-M and
A-II-2-M on each Distribution Date will have accrued at the equal the
weighted average of the Net Rates of the Group II Loans on their
respective Uncertificated Principal Balances immediately preceding such
Distribution Date.
(3) Interest distributed to the REMIC II Regular Interests A-III-M on each
Distribution Date will have accrued at the equal the weighted average of
the Net Rates of the Group II Loans on their respective Uncertificated
Principal Balances immediately preceding such Distribution Date.
(4) Interest distributed to the REMIC II Regular Interest A-IV-1-M on each
Distribution Date will have accrued at the equal the weighted average of
the Net Rates of the Group IV Loans on their respective Uncertificated
Principal Balances immediately preceding such Distribution Date.
(5) The Certificate Interest Rate for each Class of the Class B and Class M
REMIC II Regular Interests shall equal, on any Distribution Date, the
weighted average of the Pass-Through Rates for the Class Y-1, Class Y-2,
Class Y-3 and Class Y-4 Regular Interests.
(6) Component II of the Class R Certificates shall be entitled to receive the
applicable Residual Distribution Amount. Component II of the Class R
Certificates shall not be entitled to receive any distributions of
interest or principal.
--------------------
(iii) REMIC III will be evidenced by (x) the REMIC III Regular
Interests (designated below), which will be uncertificated and non-transferable
and are hereby designated as the "regular interests" in REMIC III and have the
principal balances and accrue interest at the Pass-Through Rates equal to those
set forth in this Section 5.01(c)(iii) and (y) an interest in the Class R
Certificates ("REMIC III Residual Interest"), which is hereby designated as the
single "residual interest" in REMIC III.
The REMIC III Regular Interests and the REMIC III Residual Interest
will have the following designations, initial balances and pass-through rates:
64
Class Designation for
each REMIC III Regular
Interest and
Component III of the Type of Initial Uncertificated
Class R Certificates Interest Pass-Through Rate Principal Balance Final Maturity Date*
-------------------- -------- ----------------- ----------------- --------------------
I-A-1 Regular Variable (1) $47,825,000 December 2033
I-X-A-1 Regular Fixed (1) $ 0.00 December 2033
I-A-2 Regular Variable (1) $23,525,600 December 2033
I-X-A-2 Regular Fixed (1) $ 0.00 December 2033
II-A-1 Regular Variable (1) $50,000,000 December 2033
II-X-A-2 Regular Fixed (1) $ 0.00 December 2033
II-A-2 Regular Variable (1) $281,748,000 December 2033
II-X-A-1 Regular Variable (1) $ 0.00 December 2033
III-A Regular Fixed (1) $16,825,100 December 2033
IV-A Regular Variable (1) $16,883,700 December 2033
M Regular Variable (1) $16,744,200 December 2033
B-1 Regular Variable (1) $10,192,200 December 2033
B-2 Regular Variable (1) $7,522,900 December 2033
B-3 Regular Variable (1) $5,338,700 December 2033
B-4 Regular Variable (1) $5,338,800 December 2033
B-5 Regular Variable (1) $1,941,300 December 2033
B-6 Regular Variable (1) $1,456,250 December 2033
Component III of the
Class R+ Residual ----- ----- December 2033
--------------------
(1) The Pass-Through Rate equals the Pass-Through Rate of the Related Class of
Certificates set forth in Section 5.04(c)(iv).
(iv) The Classes of the Certificates shall have the following
designations, initial principal amounts and Pass-Through Rates:
65
Designation Initial Principal Pass-Through Rate
----------- ----------------- -----------------
I-A-1 $47,825,000 (1)
I-X-A-1 Notional (2) (2)
I-A-2 $23,525,600 (3)
I-X-A-2 Notional (4) (4)
II-A-1 $50,000,000 (5)
II-X-A-1 Notional (6) (6)
II-A-2 $281,748,000 (7)
II-X-A-2 Notional (8) (8)
III-A $16,825,100 (9)
IV-A $16,883,700 (10)
M $16,744,200 (11)
B-1 $10,192,200 (11)
B-2 $7,522,900 (11)
B-3 $5,338,700 (11)
B-4 $5,338,800 (11)
B-5 $1,941,300 (11)
B-6 $1,456,250 (11)
R $100 (12)
--------------------
(1) Up to and including the Distribution Date in November 2006, the Class I-A-1
Certificates will bear interest at a variable rate (the Pass-Through Rate)
equal to the weighted average of the Net Rates of the Group I Loans minus
1.922%. After the Distribution Date in November 2006, the Pass-Through Rate
will equal the weighted average of the Net Rates of the Group I Loans. The
Pass-Through Rate with respect to the first Interest Accrual Period is
expected to be approximately 3.130%.
(2) Up to and including the Distribution Date in November 2006, the Class
I-X-A-1 Certificates will bear interest at a fixed rate equal to 1.922% per
annum based on a Notional Amount equal to the Current Princiapl Amount of
the Class I-A-1 Certificates. After the Distribution Date in November 2006,
the Class I-X-A-1 Certificates will not bear any interest and will have a
Notional Amount equal to zero.
(3) Up to and including the Distribution Date in November 2006, the Class I-A-2
Certificates will bear interest at a variable rate (the Pass-Through Rate)
equal to the weighted average of the Net Rates of the Group I Loans minus
1.212%. After the Distribution Date in November 2006, the Pass-Through Rate
will equal the weighted average of the Net Rates of the Group I Loans. The
Pass-Through Rate with respect to the first Interest Accrual Period is
expected to be approximately 3.840%.
(4) Up to and including the Distribution Date in November 2006, the Class
I-X-A-2 Certificates will bear interest at a fixed rate equal to 1.212% per
annum based on a Notional Amount equal to the Current Princiapl Amount of
the Class I-A-2 Certificates. After the Distribution Date in November 2006,
the Class I-X-A-2 Certificates will not bear any interest and will have a
Notional Amount equal to zero.
(5) Up to and including the Distribution Date in October 2008, the Class II-A-1
Certificates will bear interest at a variable rate (the Pass-Through Rate)
equal to the weighted average of the Net Rates of the Group II Loans minus
0.731%. After the Distribution Date in October 2008, the Pass-Through Rate
will equal the weighted average of the Net Rates of the Group II Loans. The
Pass-Through Rate with respect to the first Interest Accrual Period is
expected to be approximately 4.587%.
(6) Up to and including the Distribution Date in October 2008, the Class
II-X-A-1 Certificates will bear interest at a fixed rate equal to 0.731%
per annum based on a Notional Amount equal to the Current Princiapl Amount
of the Class II-A-1 Certificates. After the Distribution Date in October
2008, the II-X-A-1 Certificates will not bear any interest and will have a
Notional Amount equal to zero.
(7) Up to and including the Distribution Date in October 2008, the Class II-A-2
Certificates will bear interest at a variable rate (the Pass-Through Rate)
equal to the weighted average of the Net Rates of the Group II Loans
66
minus 0.434%. After the Distribution Date in October 2008, the Pass-Through
Rate will equal the weighted average of the Net Rates of the Group II
Loans. The Pass-Through Rate with respect to the first Interest Accrual
Period is expected to be approximately 4.884%.
(8) Up to and including the Distribution Date in October 2008, the Class
II-X-A-2 Certificates will bear interest at a fixed rate equal to 0.434%
per annum based on a Notional Amount equal to the Current Princiapl Amount
of the Class II-A-2 Certificates. After the Distribution Date in October
2008, the Class II-X-A-2 Certificates will not bear any interest and will
have a Notional Amount equal to zero.
(9) The Class III-A Certificates will bear interest at a variable rate (the
Pass-Through Rate) equal to the weighted average of the Net Rates of the
Group III Loans. The Pass-Through Rate with respect to the first Interest
Accrual Period is expected to be approximately 5.609%.
(10) The Class IV-A Certificates will bear interest at a variable rate (the
Pass-Through Rate) equal to the weighted average of the Net Rates of the
Group IV Loans. The Pass-Through Rate with respect to the first Interest
Accrual Period is expected to be approximately 5.165%.
(11) The Class M and Class B Certificates will bear interest at a variable rate
(the Pass-Through Rate) equal to the weighted average of the Net Rate of
the Mortgage Loans in each Mortgage Loan Group weighted in proportion to
the results of subtracting from the aggregate principal balance of each
Mortgage Loan Group, the Current Principal Balance of the related Classes
of Senior Certificates. The Pass-Through Rate with respect to the first
Interest Accrual Period is expected to be approximately 5.283%.
(12) The Class R Certificates will not bear 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, REMIC II Regular Interests, the REMIC III Regular Interests and the
Certificates.
(e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates (other than the
Class R Certificates), interest shall be calculated, on the basis of a 360-day
year comprised of twelve 30-day months, based upon the respective Pass-Through
Rate set forth, or determined as provided, above and the Current Principal
Amount (or Notional Amount in the case of the Interest Only Certificates) of
such Class applicable to such Distribution Date.
(f) The Certificates shall be substantially in the forms set forth in
Exhibits ▇-▇, ▇-▇, ▇-▇ and A-4. On original issuance, the Trustee shall sign,
countersign and shall deliver them at the direction of the Depositor. 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 Depositor 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
67
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 Offered Subordinate Certificates, $25,000 and increments of $1.00 in excess
thereof, except that one Certificate of each such Class may be issued in a
different amount so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign Physical Certificates all in an aggregate principal amount that
shall equal the Current Principal Amount of such Class on the Closing Date. The
Private Certificates shall be issued in certificated fully-registered form in
minimum dollar denominations of $25,000 and integral multiples of $1.00 in
excess thereof, except that one Private Certificate of each Class may be issued
in a different amount so that the sum of the denominations of all outstanding
Private Certificates of such Class shall equal the Current Principal Amount of
such Class on the Closing Date. The Residual Certificates shall each be issued
in certificated fully-registered form in the denomination of $100. Each Class of
Global Certificates, if any, shall be issued in fully registered form in minimum
dollar denominations of $50,000 and integral multiples of $1.00 in excess
thereof, except that one Certificate of each Class may be in a different
denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign (i) in the case of each Class of Offered Certificates, the
Certificate in the entire Current Principal Amount of the respective Class and
(ii) in the case of each Class of Private Certificates, Individual Certificates
all in an aggregate principal amount that shall equal the Current Principal
Amount of each such respective Class on the Closing Date. The Certificates
referred to in clause (i) and if at any time there are to be Global
Certificates, the Global Certificates shall be delivered by the Depositor to the
Depository or pursuant to the Depository's instructions, shall be delivered by
the Depositor 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.
68
(i) The Closing Date is hereby designated as the "startup" day of each
2003-6 REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each 2003-6 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 2003-6 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,
whether upon original issuance or upon issuance of any other Certificate of any
such Class in exchange therefor or upon transfer thereof:
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
69
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 Section 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 a Private Certificate or a Residual Certificate,
whether upon original issuance or subsequent transfer, each holder of such
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 Section
5.02(h), the following restrictions shall apply with respect to the transfer and
registration of transfer of an Private Certificate or a Residual Certificate
Certificate to a transferee that takes delivery in the form of an Individual
Certificate:
(i) The Trustee shall register the transfer of an Individual
Certificate if the requested transfer is being made to a transferee who has
provided the Trustee with a Rule 144A Certificate or comparable evidence as to
its QIB status.
(ii) The Trustee shall register the transfer of any Individual
Certificate if (x) the transferor has advised the Trustee in writing that the
Certificate is being transferred to an Institutional Accredited Investor along
with facts surrounding the transfer as set forth in Exhibit F-1 hereto; 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) 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 Section 5.02(h),
the rules of the Depository and the following:
70
(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 Section 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 Section 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 Section 5.02(h), an exchange of a beneficial interest in
a Global Certificate of a Class for an Individual Certificate or Certificates of
such Class, an exchange of an Individual Certificate or Certificates of a Class
for a beneficial interest in the Global Certificate of such Class and an
exchange of an Individual Certificate or Certificates of a Class for another
Individual Certificate or Certificates of such Class (in each case, whether or
not such exchange is made in anticipation of subsequent transfer, and, in the
case of the Global Certificate of such Class, so long as such Certificate is
outstanding and is held by or on behalf of the Depository) may be made only in
accordance with Section 5.02(h), the rules of the Depository and the following:
(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
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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(g) or any
integral multiple of $1.00 in excess thereof) by surrendering such Certificate
at the Corporate Trust Office, or at the office of any transfer agent, together
with an executed instrument of assignment and transfer satisfactory in form and
substance to the Trustee in the case of transfer and a written request for
exchange in the case of exchange. The holder of a beneficial interest in a
Global Certificate may, subject to the rules and procedures of the Depository,
cause the Depository (or its nominee) to notify the Trustee in writing of a
request for transfer or exchange of such beneficial interest for an Individual
Certificate or Certificates. Following a proper request for transfer or
exchange, the Trustee shall, within five Business Days of such request made at
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
Depositor as indicated to the Trustee in writing. Whenever any Certificates are
so surrendered for exchange, the Trustee shall
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sign and countersign and the Trustee shall deliver the Certificates which the
Certificateholder making the exchange is entitled to receive.
(j) If the Trustee so requires, every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a signature guarantee, in
form satisfactory to the Trustee, duly executed by the holder thereof or his or
her attorney duly authorized in writing.
(k) No service charge shall be made for any transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
(l) The Trustee shall cancel all Certificates surrendered for transfer
or exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. (a) If
(i) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The mutilated, destroyed, lost or stolen Certificate shall thereupon be
canceled of record by the Trustee and shall be of no further effect and evidence
no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any duplicate Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Trustee and any
agent of the Depositor 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 Depositor, the Trustee nor any agent of the Depositor 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, which
cannot be unreasonably withheld. As a prerequisite to such
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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 Section 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 Depositor 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 Section 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 Section 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 Depositor shall be under any liability to
any Person for any registration or transfer of a Residual Certificate that is
not permitted by this Section 5.05(b) or for making payments due on such
Residual Certificate to the purported Holder thereof or taking any other action
with respect to such purported Holder under the provisions of this Agreement so
long as the written affidavit referred to above was received with respect to
such transfer, and the Tax Matters Person, the Trustee and the Depositor, 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 Section 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 Section 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 Depositor 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 if it is the Holder of the largest percentage
interest of such Certificate, and appoints the Securities Administrator to act
as its agent with respect to all matters concerning the tax obligations of the
Trust.
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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 Depositor) 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 addressed to the
Trustee that such transaction is exempt from the registration requirements of
the Securities Act. The cost of such opinion shall not be an expense of the
Trustee or the Trust Fund.
(b) The Private Certificates shall each bear a Securities Legend.
Section 5.07 ERISA Restrictions. (a) Subject to the provisions of
subsection (b), no Residual Certificates or Private Certificates may be acquired
directly or indirectly by, or on behalf of, an employee benefit plan or other
retirement arrangement (a "Plan") that is subject to Title I of ERISA or Section
4975 of the Code, or by a person using "plan assets" of a Plan, unless the
proposed transferee provides the Trustee, with an Opinion of Counsel addressed
to the Trustee, the Master Servicer and the Securities Administrator (upon which
they may rely) that is 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 Depositor, the Master Servicer, the Securities Administrator or the
Trustee to any obligation in addition to those undertaken in the Agreement.
(b) Unless such Person has provided an Opinion of Counsel in accordance
with Section 5.07(a), 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, and any Person acquiring an interest
in a Private Certificate in definitive form shall represent in writing to the
Trustee, that it is not acquiring an interest in such Certificate directly or
indirectly by, or on behalf of, or with "plan assets" of, an employee benefit
plan or other retirement arrangement which is subject to Title I of ERISA and/or
Section 4975 of the Code.
(c) Each beneficial owner of a Class M, Class B-1, Class B-2 or Class
B-3 Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that 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) such Certificate is rated
at least "BBB-" or its equivalent by Fitch, S&P or ▇▇▇▇▇'▇, (ii) such beneficial
owner is not a Plan or investing with "plan assets" of any Plan, or (iii) (1) it
is an insurance company, (2) the
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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 nor the Securities
Administrator will be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to the Global Certificates. Any
attempted or purported transfer of any Certificate in violation of the
provisions of Section s (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 Securities
Administrator and the Master Servicer from and against any and all liabilities,
claims, costs or expenses incurred by the Trustee, the Securities Administrator
or the Master Servicer as a result of such attempted or purported transfer. The
Trustee shall have no liability for transfer of any such Global Certificates in
or through book-entry facilities of any Depository or between or among
Depository Participants or Certificate Owners made in violation of the transfer
restrictions set forth herein.
Section 5.08 Rule 144A Information. For so long as any Private
Certificates are outstanding, (1) the Seller will provide or cause to be
provided to any holder of such Private 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 Private Certificates conducted in accordance with
Rule 144A.
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ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates. (a) Interest and
principal (as applicable) on the Certificates (other than the Class R
Certificates) of each Certificate Group will be distributed monthly on each
Distribution Date, commencing in January 2004, in an amount equal to the
Available Funds for the related Loan Group on deposit in the Distribution
Account for such Distribution Date. In addition, on the Distribution Date
occurring in January 2004, the Class R Deposit will be distributed to the Holder
of the Class R Certificates in reduction of the Current Principal Amount
thereof. On each Distribution Date, the Available Funds for each Loan Group on
deposit in the Distribution Account shall be distributed as follows:
(i) With respect to the Group I Certificates:
(A) on each Distribution Date, the Available Funds for Loan
Group I will be distributed to the Group I Certificates as
follows:
first, to the Class I-A-1, Class I-X-A-1, Class I-A-2
and Class I-X-A-2 Certificates, the Accrued Certificate
Interest on such Class for such Distribution Date, pro
rata, based on the Accrued Certificate Interest owed to
each such Class;
second, to the Class I-A-1, Class I-X-A-1, Class I-A-2
and Class I-X-A-2 Certificates, any Accrued Certificate
Interest thereon remaining undistributed from previous
Distribution Dates, pro rata, based on the undistributed
Accrued Certificate Interest owed to each such Class, to
the extent of remaining Available Funds for Loan Group
I;
third, to the Class I-A-1 and Class I-A-2 Certificates,
in reduction of the Current Principal Amount thereof,
the Senior Optimal Principal Amount with respect to the
Group I Certificates for such Distribution Date, pro
rata, based on their respective Current Principal
Amounts, to the extent of remaining Available Funds for
Loan Group I, until the Current Principal Amount of each
such Class has been reduced to zero.
(B) on each Distribution Date, the Available Funds for Loan
Group II will be distributed to the Group II Certificates as
follows:
first, to the Class II-A-1, Class II-X-A-1, Class
II-A-2, and Class II-X-A-2 Certificates, the Accrued
Certificate Interest on such Class for such Distribution
Date, pro rata, based on the Accrued Certificate
Interest owed to each such Class;
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second, to the Class II-A-1, Class II-X-A-1, Class
II-A-2, and Class II-X-A-2 Certificates, any Accrued
Certificate Interest thereon remaining undistributed
from previous Distribution Dates, pro rata, based on the
undistributed Accrued Certificate Interest owed to each
such Class, to the extent of remaining Available Funds
for Loan Group II; and
third, to the Class II-A-1 and Class II-A-2
Certificates, in reduction of the Current Principal
Amount thereof, the Senior Optimal Principal Amount with
respect to the Group II Certificates for such
Distribution Date, pro rata, based on their respective
Current Principal Amounts, to the extent of remaining
Available Funds for Loan Group II, until the Current
Principal Amount of each such Class has been reduced to
zero.
(C) on each Distribution Date, the Available Funds for Loan
Group III will be distributed to the Group III Certificates
as follows:
first, to the Class III-A Certificates, the Accrued
Certificate Interest on such Class for such Distribution
Date;
second, to the Class III-A Certificates, any Accrued
Certificate Interest thereon remaining undistributed
from previous Distribution Dates, to the extent of
remaining Available Funds for Loan Group III; and
third, to the Class III-A Certificates, in reduction of
the Current Principal Amount thereof, the Senior Optimal
Principal Amount with respect to the Group III
Certificates for such Distribution Date, to the extent
of remaining Available Funds for Loan Group III, until
the Current Principal Amount of such Class has been
reduced to zero.
(D) on each Distribution Date, the Available Funds for Loan
Group IV will be distributed to the Group IV Certificates as
follows:
first, to the Class IV-A Certificates, the Accrued
Certificate Interest on such Class for such Distribution
Date;
second, to the Class IV-A Certificates, any Accrued
Certificate Interest thereon remaining undistributed
from previous Distribution Dates, to the extent of
remaining Available Funds for Loan Group IV; and
third, to the Class IV-A Certificates, in reduction of
the Current Principal Amount thereof, the Senior Optimal
Principal Amount with respect to the Group IV
Certificates for such Distribution Date, to the extent
of remaining Available Funds for Loan Group
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IV, until the Current Principal Amount of such Class has
been reduced to zero.
(E) Except as provided in clauses (F) and (G) below, on each
Distribution Date on or prior to the Cross-Over Date, an
amount equal to the sum of any remaining Available Funds for
all Loan Groups after the distributions in clauses (A)
through (D) above will be distributed sequentially, in the
following order, to the Class M, Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5 and Class B-6 Certificates, in each
case up to an amount equal to and in the following order: (a)
the Accrued Certificate Interest thereon for such
Distribution Date, (b) any Accrued Certificate Interest
thereon remaining undistributed from previous Distribution
Dates and (c) such Class's Allocable Share for such
Distribution Date, in each case, to the extent of remaining
Available Funds for all Loan Groups.
(F) On each Distribution Date prior to the Cross-Over Date,
but after the reduction of the aggregate Current Principal
Amount of all of the classes of any of the Group I, Group II,
Group III or Group IV Certificates to zero, the remaining
Certificate Groups (other than the Interest Only
Certificates) will be entitled to receive in reduction of
their Current Principal Amounts, pro rata based upon
aggregate Current Principal Amount of the Senior Certificates
in each Certificate Group immediately prior to such
Distribution Date, in addition to any Principal Prepayments
related to such remaining Senior Certificates' respective
Loan Group allocated to such Senior Certificates, 100% of the
Principal Prepayments on any Mortgage Loan in the Loan Group
relating to the fully paid Certificate Group. Such amounts
allocated to Senior Certificates shall be treated as part of
the Available Funds for the related Loan Group and
distributed as part of the related Senior Optimal
Distribution Amount in accordance with priority third in
clauses (A) through (D) above, as applicable, in reduction of
the Current Principal Amounts thereof. Notwithstanding the
foregoing, if (a) the weighted average of the Subordinate
Percentages on such Distribution Date equals or exceeds two
times the initial weighted average of the Subordinate
Percentages and (b) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current
Principal Amount of the Subordinate Certificates does not
exceed 100%, then the additional allocation of Principal
Prepayments to the Certificates in accordance with this
clause (F) will not be made and 100% of the Principal
Prepayments on any Mortgage Loan in the Loan Group relating
to the fully paid Certificate Group will be allocated to the
Subordinate Certificates.
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(G) For any Undercollateralized Certificate Group on any
Distribution Date prior to the Cross-Over Date, (a) 100% of
amounts otherwise allocable to the Subordinate Certificates
in respect of principal will be distributed to the Senior
Certificates of such Undercollateralized Certificate Group in
reduction of the Current Principal Amounts thereof, until the
aggregate Current Principal Amount of such Senior
Certificates is an amount equal to the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Loan
Group and (b) the Accrued Certificate Interest otherwise
allocable to the Subordinate Certificates on such
Distribution Date will be reduced and distributed to such
Senior Certificates, to the extent of any amount due and
unpaid on such Senior Certificates, in an amount equal to one
month's interest at a rate equal to the related Pass-Through
Rate for such Distribution Date on the related
Undercollateralized Amount. Any such reduction in the Accrued
Certificate Interest on the Subordinate Certificates will be
allocated in reverse order of the Class B Certificates
numerical designations, commencing with the Class B-6
Certificates and then to the Class M Certificates. If there
exists more than one Undercollateralized Certificate Group on
a Distribution Date, amounts distributable to such
Undercollateralized Certificate Groups pursuant to this
clause will be allocated between such Undercollateralized
Certificate Groups, pro rata, based upon their respective
Undercollateralized Amounts.
(H) If, after distributions have been made pursuant to
priorities first and second of clauses (a)(i)(A), (B), (C)
and (D) above on any Distribution Date, the remaining
Available Funds for any Loan Group is less than the Senior
Optimal Principal Amount for that Loan Group, the Senior
Optimal Principal Amount for such Loan Group shall be reduced
by that amount, and the remaining Available Funds for such
Loan Group will be distributed as principal among the related
Classes of Senior Certificates, pro rata based on their
respective Current Principal Amounts
(I) On each Distribution Date, any Available Funds remaining
after payment of interest and principal to the Classes of
Certificates entitled thereto, will be distributed to the
Class R Certificates; provided that if on any Distribution
Date there are any Available Funds for any Loan Group
remaining after payment of interest and principal to a Class
or Classes of Certificates entitled thereto, such amounts
will be distributed to the other Classes of Senior
Certificates, pro rata, based upon their Current Principal
Amounts, until all amounts due to all Classes of Senior
Certificates have been paid in full, before any Available
Funds are distributed in accordance with this clause to the
Class R Certificates.
(b) No Accrued Certificate Interest will be payable with respect to any
Class of Certificates after the Distribution Date on which the Current Principal
Amount of such Certificate has been reduced to zero.
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(c) If on any Distribution Date the Available Funds for the Senior
Certificates in any Certificate Group is less than the Accrued Certificate
Interest on the related Senior Certificates for such Distribution Date prior to
reduction for Net Interest Shortfalls and the interest portion of Realized
Losses, the shortfall will be allocated among the holders of each Class of
Senior Certificates in such Certificate Group in proportion to the respective
amounts of Accrued Certificate Interest that would have been allocated thereto
in the absence of such Net Interest Shortfalls and/or Realized Losses for such
Distribution Date. In addition, the amount of any interest shortfalls will
constitute unpaid Accrued Certificate Interest and will be distributable to
holders of the Certificates of the related Classes entitled to such amounts on
subsequent Distribution Dates, to the extent of the applicable Available Funds
after current interest distributions as required herein. Any such amounts so
carried forward will not bear interest. Shortfalls in interest payments will not
be offset by a reduction in the servicing compensation of the Master Servicer or
otherwise, except to the extent of applicable Compensating Interest Payments.
(d) The expenses and fees of the Trust shall be paid by each of the
2003-6 REMICs, to the extent that such expenses relate to the assets of each of
such respective 2003-6 REMICs, and all other expenses and fees of the Trust
shall be paid pro rata by each of the 2003-6 REMICs.
Section 6.02 Allocation of Losses.(a) On or prior to each Determination
Date, the Master Servicer shall determine the amount of any Realized Loss in
respect of each Mortgage Loan that occurred during the immediately preceding
calendar month, based on information provided by the related Servicer.
(b) With respect to any Certificates (other than the Interest Only
Certificates) on any Distribution Date, the principal portion of each Realized
Loss on a Mortgage Loan in a Loan Group shall be allocated as follows:
first, to the Class B-6 Certificates until the Current Principal
Amount thereof has been reduced to zero;
second, to the Class B-5 Certificates until the Current Principal
Amount thereof has been reduced to zero;
third, to the Class B-4 Certificates until the Current Principal
Amount thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until the Current Principal
Amount thereof has been reduced to zero;
fifth, to the Class B-2 Certificates until the Current Principal
Amount thereof has been reduced to zero;
sixth, to the Class B-1 Certificates until the Current Principal
Amount thereof has been reduced to zero;
seventh, to the Class M Certificates until the Current Principal
Amount thereof has been reduced to zero;
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eighth, to each Class of Senior Certificates in the related
Certificate Group pro rata based upon their respective Current
Principal Amounts.
(c) Notwithstanding the foregoing clause (b), no such allocation of any
Realized Loss shall be made on a Distribution Date to any Class of (i)
Subordinated Certificates to the extent that such allocation would result in the
reduction of the aggregate Current Principal Amounts of all Certificates in as
of such Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on the Mortgage Loans on such date, to an amount
less than the aggregate Scheduled Principal Balance of all of the Mortgage Loans
as of the first day of the month of such Distribution Date and (ii) Senior
Certificates in a Certificate Group to the extent that such allocation would
result in the reduction of the aggregate Current Principal Amounts of all the
Certificates in such Certificate Group as of such Distribution Date, after
giving effect to all distributions and prior allocations of Realized Losses on
the Mortgage Loans in the related Loan Group on such date, to an amount less
than the aggregate Scheduled Principal Balance of all of the Mortgage Loans in
such Loan Group as of the first day of the month of such Distribution Date (each
such limitation in clause (i) and (ii), the "Loss Allocation Limitation").
(d) The principal portion of any Realized Losses allocated to a Class
of Certificates shall be allocated among the Certificates of such Class (other
than the Interest Only Certificates) in proportion to their respective Current
Principal Amounts. The principal portion of any allocation of Realized Losses
shall be accomplished by reducing the Current Principal Amount of the related
Certificates on the related Distribution Date.
(e) Realized Losses shall be allocated on the Distribution Date in the
month following the month in which such loss was incurred and, in the case of
the principal portion thereof, after giving effect to distributions made on such
Distribution Date.
(f) On each Distribution Date, the Securities Administrator shall
determine and notify the Trustee of the Subordinate Certificate Writedown
Amount. Any Subordinate Certificate Writedown Amount shall effect a
corresponding reduction in the Current Principal Amount of the Class B
Certificates in the reverse order of their numerical Class designations and
thereafter of the Class M Certificates.
(g) The applicable Senior Percentage of Net Interest Shortfalls will be
allocated among the Senior Certificates in the related Certificate Group in
proportion to the amount of Accrued Certificate Interest that would have been
allocated thereto in the absence of such shortfalls. The applicable Subordinate
Percentage of Net Interest Shortfall will be allocated among the Subordinate
Certificates in proportion to the amount of Accrued Certificate Interest that
would have been allocated thereto in the absence of such shortfalls. The
interest portion of any Realized Losses with respect to the Mortgage Loans
occurring on or prior to the Cross-Over Date will be allocated to the Class B
Certificates in inverse order of their numerical Class designations and then to
the Class M Certificates. Following the Cross-Over Date, the interest portion of
Realized Losses on the Mortgage Loans will be allocated to the Senior
Certificates in the related Certificate Group.
Section 6.03 Payments. (a) On each Distribution Date, other than the
final Distribution Date, the Trustee shall distribute to each Certificateholder
of record as of the immediately
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preceding Record Date the Certificateholder's pro rata share of its Class (based
on the aggregate Fractional Undivided Interest represented by such Holder's
Certificates) of all amounts required to be distributed on such Distribution
Date to such Class, based on information provided to the Trustee by the
Securities Administrator. 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. Neither the Securities Administrator nor
the Trustee shall 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.
Section 6.04 Statements to Certificateholders. (a) On each Distribution
Date, concurrently with each distribution to Certificateholders, the Securities
Administrator shall make available to the parties hereto and each
Certificateholder via the Securities Administrator's internet website as set
forth below, the following information, expressed with respect to clauses (i)
through (vii) in the aggregate and as a Fractional Undivided Interest
representing an initial Current Principal Amount of $1,000, or in the case of
the Residual Certificates, an initial Current Principal Amount of $100:
(i) the Current Principal Amount or Notional Amount of each Class
of Certificates immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on each
applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related Interest Accrual
Period;
(iv) the Net Interest Shortfall and any other adjustments to
interest at the related Pass-Through Rate necessary to account for any
difference between interest accrued and aggregate interest distributed with
respect to each Class of Certificates;
(v) the amount of the distribution allocable to interest on each
Class of Certificates;
(vi) the Pass-Through Rates for each Class of Certificates with
respect to such Distribution Date;
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(vii) the Current Principal Amount or Notional Amount of each
Class of Certificates after such Distribution Date;
(viii) the amount of any Monthly Advances, Compensating Interest
Payments and outstanding unreimbursed advances by the Master Servicer or the
Servicer included in such distribution separately stated for each Loan Group;
(ix) the aggregate amount of any Realized Losses (listed
separately for each category of Realized Loss and for each Loan Group) during
the related Prepayment Period and cumulatively since the Cut-off Date and the
amount and source (separately identified) of any distribution in respect thereof
included in such distribution;
(x) with respect to each Mortgage Loan which incurred a Realized
Loss during the related Prepayment Period, (i) the loan number, (ii) the
Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date, (ii)
the Scheduled Principal Balance of such Mortgage Loan as of the beginning of the
related Due Period, (iii) the Net Liquidation Proceeds with respect to such
Mortgage Loan and (iv) the amount of the Realized Loss with respect to such
Mortgage Loan;
(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
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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;
(xviii) the Average Loss Severity Percentage for each Loan Group;
and
(xix) the Senior Percentage, Senior Prepayment Percentage,
Subordinate Percentage and Subordinate Prepayment Percentage, in each case, for
such Distribution Date.
The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the 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) Within a reasonable period of time after the end of the preceding
calendar 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 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
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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 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
Servicer 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.
Section 6.07 Distributions on REMIC I Regular Interests, REMIC II
Regular Interests and REMIC III Regular Interests.
(a) On each Distribution Date, the Trustee shall be deemed to
distribute to itself as the holder of the REMIC I Regular Interests, the
following to the extent of the Available Funds reduced by distributions made to
the Class R Certificateholders pursuant to Section 6.01(a): those portions of
the REMIC I Distribution Amount not designated to Component I of the Class R
Certificate, in the amounts and in accordance with the priorities set forth in
the definition of REMIC I Distribution Amount.
(b) On each Distribution Date the Trustee shall be deemed to distribute
to itself, as the holder of the REMIC II Regular Interests, the following
amounts in the following order of priority to the extent of the Available Funds
reduced by distributions made to the Class R Certificates pursuant to Section
6.01(a):
(i) Uncertificated Interest on the REMIC II Regular Interests for
such Distribution Date, plus any Uncertificated Interest thereon remaining
unpaid from any previous Distribution Date; and
(ii) In accordance with the priority set forth in Section 6.07(c),
an amount equal to the sum of the amounts in respect of principal distributable
on each Class of Certificates (other than the Class R Certificates) under
Section 6.01(a), as allocated thereto pursuant to Section 6.01(a).
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(c) The amount described in Section 6.07(b)(ii) shall be deemed
distributed with respect to REMIC II Regular Interests in accordance with the
priority assigned to each Related Class of Certificates (other than the Class R
Certificates), respectively, under Section 6.01(a) until the Uncertificated
Balance of each such interest is reduced to zero.
(d) The portion of the Uncertificated Interest amounts described in
Section 6.07(b)(i) shall be deemed distributed by REMIC II to REMIC III in
accordance with the priority assigned to the REMIC III Certificates relative to
that assigned to the Class R Certificates under Section 6.01(a).
(e) In determining from time to time the amounts distributable on the
REMIC II Regular Interests, Realized Losses allocated to the REMIC III Regular
Interests shall be deemed allocated to the REMIC II Regular Interests in
accordance with the priority assigned to each Related Class of Certificates
(other than the Class R Certificates) respectively under Section 6.02.
(f) On each Distribution Date the Trustee shall be deemed to distribute
from REMIC III, in the priority set forth in Sections 6.01(a), to the Holders of
each Class of Certificates (other than the Class R Certificates) the amounts
distributable thereon with respect to their interests in REMIC III from the
amounts deemed to have been received by REMIC II from REMIC I under this Section
6.07.
(g) Notwithstanding the deemed distributions on the REMIC I Regular
Interests and REMIC II Regular Interests described in this Section 10.04,
distributions of funds from the Certificate Account shall be made only in
accordance with Section 6.01.
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ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 7.02 Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03 Indemnification of the Trustee, the Master Servicer and
the Securities Administrator. (a) The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement, 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
Depositor written notice thereof promptly after the Trustee shall have with
respect to such claim or legal action knowledge thereof. The Trustee's failure
to give 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.
(a) The Depositor 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 Section 7.03(a).
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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 Depositor, 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 Section 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 Section 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
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required to investigate or make recommendations concerning potential liabilities
which the Trust might incur as a result of such course of action by reason of
the condition of the Mortgaged Properties but shall give notice to the Trustee
if it has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions
of any Servicer, except as otherwise expressly provided herein.
Section 7.05 Master Servicer Not to Resign. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of
Independent Counsel addressed to the Trustee to such effect delivered to the
Trustee. No such resignation by the Master Servicer shall become effective until
the Company 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, the Company or the Trustee may make such arrangements for
the compensation of such successor master servicer out of payments on the
Mortgage Loans as the Company 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 the Company 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
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Officer's Certificate and an Opinion of Independent Counsel addressed to the
Trustee, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement; and (iv) in the event the Master Servicer is
terminated without cause by the Company, the Company shall pay the terminated
Master Servicer a termination fee equal to 0.25% of the aggregate Scheduled
Principal Balance of the Mortgage Loans at the time the master servicing of the
Mortgage Loans is transferred to the successor Master Servicer. No such
assignment or delegation shall affect any rights or 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
(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.
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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 the Company, 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.
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
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responsibilities, duties, liabilities and limitations on liabilities relating
thereto placed on the Master Servicer by the terms and provisions hereof;
provided, however, that the Company 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 ▇▇▇▇▇▇ ▇▇▇- 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 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.
(a) 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.
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
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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;
(vii) None of the Securities Administrator, the Master Servicer,
the Depositor, the Company 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 and
(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 this 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.
(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.
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(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:
(a) 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 the Depositor, the Master Servicer or a 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;
(b) 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;
(c) 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), 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;
(d) 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;
(e) Neither the Trustee nor the Securities Administrator shall be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in writing to
do so by Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 25% of the Trust Fund and provided that the payment
within a reasonable time to the Trustee or the Securities Administrator, as
applicable, of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee or the
Securities Administrator, as applicable, reasonably assured to the
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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;
(f) 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;
(g) Should the Trustee or the Securities Administrator deem the nature
of any action required on its part, other than a payment or transfer under
Section 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 Depositor with reasonable further instructions;
(h) 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;
(i) 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 Section
9.07; and
(j) 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 Seller pursuant
to this Agreement or the Mortgage Loan Purchase Agreement, as applicable, or the
eligibility of any Mortgage Loan for purposes of this Agreement.
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Depositor, and neither
the Trustee nor the Securities Administrator shall have any responsibility for
their correctness. Neither the Trustee nor the Securities Administrator makes
any representation as to the validity or sufficiency of the Certificates (other
than the signature and countersignature of the Trustee on the Certificates) or
of any Mortgage Loan except as expressly provided in Sections 2.02 and 2.05
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
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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 Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, 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 their individual capacities or
in any capacity other than as Trustee or Securities Administrator hereunder may
become the owner or pledgee of any Certificates with the same rights it would
have if it were not 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(b) all reasonable out-of-pocket expenses, disbursements and
advances and the expenses of the Trustee and the Securities Administrator,
respectively, in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee or the Securities
Administrator, respectively, in the administration of the trusts hereunder
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from its
negligence or intentional misconduct or which is the responsibility of the
Certificateholders. If funds in the Master Servicer Collection Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Depositor. Such compensation and reimbursement
obligation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust.
Section 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,
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having a combined capital and surplus and undivided profits of at least
$40,000,000 or, in the case of a successor Trustee, $50,000,000, subject to
supervision or examination by federal or state authority and, in the case of the
Trustee, rated "BBB" or higher by S&P with respect to their long-term rating and
rated "BBB" or higher by S&P and "Baa2" or higher by ▇▇▇▇▇'▇ with respect to any
outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee 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 Depositor and the Master Servicer, with a copy to the Rating Agencies.
Upon receiving such notice of resignation, the Depositor shall promptly appoint
a successor Trustee or successor Securities Administrator, as applicable, by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee or Securities Administrator, as
applicable, 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.
(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 Depositor 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
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liquidation, then the Depositor 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 Depositor, 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 Depositor
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 Depositor and the predecessor Trustee or Securities
Administrator, as applicable, shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Trustee or Securities Administrator, as
applicable, all such rights, powers, duties and obligations.
(b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator
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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. The Company 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
Depositor 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 Depositor 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
Depositor and the Trustee may consider necessary or desirable.
(b) If the Depositor 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 Depositor.
(c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof
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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
Depositor 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 2003-6
REMIC shall be a calendar year and the Securities Administrator shall maintain
or cause the maintenance of the books of each such 2003-6 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 2003-6 REMIC, 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 mortgaged property that is abandoned or foreclosed, receipt of
mortgage interests in kind in a trade or business, a cancellation of
indebtedness, interest, original issue discount and market discount or premium
(using a constant prepayment assumption of 25% CPR). The Securities
Administrator will apply for an Employee Identification Number from the IRS
under Form SS-4 or any other acceptable method for all tax entities. In
connection with the foregoing, the Securities Administrator shall timely prepare
and file, and the Trustee shall sign, IRS Form 8811, which shall provide the
name and address of the person who can be contacted to obtain information
required to be reported to the holders of regular interests in each 2003-6 REMIC
(the "REMIC Reporting Agent"). The Trustee shall
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make elections to treat each 2003-6 REMIC as a REMIC (which elections shall
apply to the taxable period ending December 31, 2003 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 largest percentage
interest in the Class R Certificates is hereby designated as the "Tax Matters
Person" (within the meaning of Treas. Reg. ss.ss.1.860F-4(d)) for each 2003-6
REMIC. 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 2003-6
REMIC 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 the largest percentage interest in 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 REMIC 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 Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants and the Securities Administrator's covenants, respectively,
105
set forth in this Section 9.12; provided, however, such liability and obligation
to indemnify in this paragraph shall be several and not joint 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
Section 10.01 Termination Upon Repurchase by the Depositor or its
Designee or Liquidation of the Mortgage Loans.
(a) Subject to Section 10.02, the respective obligations and
responsibilities of the Depositor, 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:
(i) the repurchase by or at the direction of the Depositor or its
designee of all of the 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 in such Loan
Group (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 on
the Mortgage Loans 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 Depositor 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 Depositor and the Trustee
at the expense of the Depositor, (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;
(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 the Certificateholders of all amounts
required to be paid to them pursuant to this Agreement.
(b) In no event, however, shall the Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to
the Court of St. James's, living on the date of this Agreement.
(c) (i) The right of the Depositor or its designee to repurchase all
the assets of the Trust Fund described in Section 10.01(a)(i) above shall be
exercisable only if (i) the aggregate
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Stated Principal Balance of the Mortgage Loans at the time of any such
repurchase is less than 10% of the sum of the Cut-off Date Balance or (ii) the
Depositor, based upon an Opinion of Counsel addressed to the Depositor, the
Trustee and the Sercurities Administrator has determined that the REMIC status
of any 2003-6 REMIC has been lost or that a substantial risk exists that such
REMIC status will be lost for the then-current taxable year. At any time
thereafter, in the case of (i) or (ii) above, the Depositor may elect to
terminate any 2003-6 REMIC at any time, and upon such election, the Depositor or
its designee, shall purchase in accordance with Section 10.01(a)(i) above all
the assets of the Trust Fund.
(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 Depositor to repurchase or cause the
repurchase of all assets of the Trust Fund described in Section 10.01(a)(i)
above is exercised, the Depositor 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 as
directed by the Securities Administrator in writing an amount determined as
follows: with respect to each Certificate (other than the Class R Certificates),
the outstanding Current Principal Amount, plus with respect to each Certificate
(other than the Class R Certificates), one month's interest thereon at the
applicable Pass-Through Rate; and with respect to the Class R Certificates, the
percentage interest evidenced thereby multiplied by the difference, if any,
between the above described repurchase price and the aggregate amount to be
distributed to the Holders of the Certificates (other than the Class R
Certificates). If the proceeds with respect to the Mortgage Loans are not
sufficient to pay all of the Certificates in full (other than the Class R
Certificates), any such deficiency will be allocated first, to the Class B
Certificates, in inverse order of their numerical designation, second, to the
Class M Certificates and then to the Senior Certificates, on a pro rata basis.
Upon deposit of the required repurchase price and following such final
Distribution Date, the Trustee shall release promptly (or cause the Custodian to
release) to Depositor 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
the Certificateholders in trust without interest pending final distributions
pursuant to Section 10.01(g). Any other amounts remaining in the Accounts will
belong to the Depositor.
(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 Section 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
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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 Depositor 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 Section 10.01(f).
(g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.
Section 10.02 Additional Termination Requirements. (a) If the option of
the Depositor to repurchase all the Mortgage Loans under Section 10.01(a)(i)
above is exercised, the Trust Fund and each 2003-6 REMIC 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 2003-6 REMIC or
(ii) cause any 2003-6 REMIC to fail to qualify as a 2003-6 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 Depositor, the Trustee, as agent for the respective Tax Matters
Persons, shall adopt a plan of complete liquidation of each 2003-6 REMIC in the
case of a termination under Section 10.01(a)(i). Such plan, which shall be
provided to the Trustee by Depositor, shall meet the requirements of a
"qualified liquidation" under Section 860F of the Code and any regulations
thereunder.
(ii) the Depositor shall notify the Trustee at the commencement of such
90-day liquidation period and, at or prior to the time of making of the final
payment on the Certificates, the Trustee shall sell or otherwise dispose of all
of the remaining assets of the Trust Fund in accordance with the terms hereof;
and
(iii) at or after the time of adoption of such a plan of complete
liquidation of any 2003-6 REMIC and at or prior to the final Distribution Date,
the Trustee shall sell for cash all of the assets of the Trust to or at the
direction of the Depositor, and each 2003-6 REMIC, shall terminate at such time.
109
(b) By their acceptance of the Residual Certificates, the Holders
thereof hereby (i) agree to adopt such a plan of complete liquidation of the
related 2003-6 REMIC upon the written request of the Depositor, and to take such
action in connection therewith as may be reasonably requested by the Depositor
and (ii) appoint the Depositor 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 2003-6 REMIC. Upon complete liquidation or final
distribution of all of the assets of the Trust Fund, the Trust Fund and each
2003-6 REMIC shall terminate.
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ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties. The parties intend that each 2003-6
REMIC 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.
Notwithstanding any other express or implied agreement to the contrary, the
Seller, the Master Servicer, the Securities Administrator, the Depositor, the
Trustee, each recipient of the related Prospectus Supplement and, by its
acceptance thereof, each holder of a Certificate, agrees and acknowledges that
each party hereto has agreed that each of them and their employees,
representatives and other agents may disclose, immediately upon commencement of
discussions, to any and all persons the tax treatment and tax structure of the
Certificates and the 2003-6 REMICs, the transactions described herein and all
materials of any kind (including opinions and other tax analyses) that are
provided to any of them relating to such tax treatment and tax structure except
where confidentiality is reasonably necessary to comply with the securities laws
of any applicable jurisdiction. For purposes of this paragraph, the terms "tax
treatment" and "tax structure" have the meanings set forth in Treasury
Regulation Sections 1.6011-4(c), 301.6111-2(c) and 301.6112-1(d).
Section 11.02 Amendment.
(a) This Agreement may be amended from time to time by the Company, the
Depositor, the Master Servicer, the Securities Administrator 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 the
Company, the Master Servicer, the Depositor, the Securities Administrator 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 any 2003-6 REMIC 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
111
the Depositor, 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 Section 11.02(b) above, it shall
not be necessary for the Certificateholders to approve the particular form of
such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
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 Depositor
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.
112
(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
Depositor, the Securities Administrator, the Master Servicer or any successor to
any such parties unless (i) such Certificateholder previously shall have given
to the Trustee a written notice of a continuing default, as herein provided,
(ii) the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs and expenses and liabilities to be
incurred therein or thereby, and (iii) the Trustee, for 60 days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of
any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.05 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is expressly required, to the
Depositor. 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 Depositor, 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
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Register, and neither the Trustee, the Securities Administrator, the Depositor,
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 Depositor, 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 Depositor,
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 a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Certificates which have been pledged in good faith to the Trustee,
the Securities Administrator, the Depositor, the Master Servicer or any
Affiliate thereof may be regarded as outstanding if the pledgor establishes to
the satisfaction of the Trustee the pledgor's right to act with respect to such
Certificates and that the pledgor is not an Affiliate of the Trustee, the
Securities Administrator, the Depositor, 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
Depositor, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 Company, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
21045) (Attention: Corporate Trust Services -
114
BSALTA 2003-6), 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 Depositor, the Master Servicer, the Securities Administrator or the
Trustee under this Agreement shall be effective only upon receipt. Any notice
required or permitted to be mailed to a Certificateholder, unless otherwise
provided herein, shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice.
Section 11.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 11.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11 Counterparts. This Agreement may be executed in two or
more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same instrument.
Section 11.12 Notice to Rating Agencies. The article and section
headings herein are for convenience of reference only, and shall not limited or
otherwise affect the meaning hereof. The Trustee shall promptly provide notice
to each Rating Agency with respect to each of the following of which 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.
115
IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and
the Securities Administrator have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year first
above written.
STRUCTURED ASSET MORTGAGE INVESTMENTS
II INC., as Depositor
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
[PSA]
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 Seller
EMC MORTGAGE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
[PSA]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 23rd day of December, 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 II Inc., the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Notary Public
[Notarial Seal]
[PSA]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 23rd day of December, 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 entity that executed the within instrument, and also
known to me to be the person who executed it on behalf of said entity, and
acknowledged to me that such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Notary Public
[Notarial Seal]
[PSA]
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 23rd day of December, 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 entity
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Notary Public
[Notarial Seal]
[PSA]
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 23rd day of December, 2003 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be a Assistant
Vice President of ▇▇▇▇▇ Fargo Bank Minnesota, National Association, the entity
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Notary Public
[Notarial Seal]
[PSA]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 23rd day of December, 2003 before me, a notary public in and for
said State, personally appeared ▇▇▇ ▇▇▇▇▇▇▇▇, known to me to be 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.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Notary Public
[Notarial Seal]
[PSA]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 23rd day of December, 2003 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, known to me to be 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.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Notary Public
[Notarial Seal]
[PSA]
APPENDIX I
CALCULATION OF CLASS Y PRINCIPAL REDUCTION AMOUNTS
Class Y Principal Reduction Amounts: For any Distribution Date the
amounts by which the principal balances of the Class Y-1, Class Y-2, Class Y-3
and Class Y-4 Certificates respectively will be reduced on such distribution
date by the allocation of Realized Losses and the distribution of principal,
determined as follows:
First for each of Group I, Group II, Group III and Group IV determine
the weighted average pass-through rate for that Group for distributions of
interest that will be made on the next succeeding Distribution Date (the "Group
Interest Rate"). The Principal Reduction Amount for each of the Class Y
Certificates will be determined pursuant to the "Generic solution for the Class
Y Principal Reduction Amounts" set forth below (the "Generic Solution") by
making identifications among the actual Groups and their related Class Y and
Class Z Certificates and weighted average pass-through rates and the Groups
named in the Generic Solution and their related Class Y and Class Z Certificates
as follows:
A. Determine which Group has the lowest Group Interest Rate. That Group
will be identified with Group AA and the Class Y and Class Z Certificates
related to that Group will be respectively identified with the Class Y-aa and
Class Z-aa Certificates. The Group Interest Rate for that Group will be
identified with J%. If two or more Groups have the lowest Group Interest Rate
pick one for this purpose, subject to the restriction that each Group may be
picked only once in the course of any such selections pursuant to paragraphs A
through D or this definition.
B. Determine which Group has the second lowest Group Interest Rate.
That Group will be identified with Group BB and the Class Y and Class Z
Certificates related to that Group will be respectively identified with the
Class Y-bb and Class Z-bb Certificates. The Group Interest Rate for that Group
will be identified with K%. If two or more Groups have the second lowest Group
Interest Rate pick one for this purpose, subject to the restriction that each
Group may be picked only once in the course of any such selections pursuant to
paragraphs A through D or this definition.
C. Determine which Group has the third lowest Group Interest Rate. That
Group will be identified with Group CC and the Class Y and Class Z Certificates
related to that Group will be respectively identified with the Class Y-cc and
Class Z-cc Certificates. The Group Interest Rate for that Group will be
identified with L%. If two or more Groups have the third lowest Group Interest
Rate pick one for this purpose, subject to the restriction that each Group may
be picked only once in the course of any such selections pursuant to paragraphs
A through D or this definition.
D. Determine which Group has the fourth lowest Group Interest Rate.
That Group will be identified with Group DD and the Class Y and Class Z
Certificates related to that Group will be respectively identified with the
Class Y-dd and Class Z-dd Certificates. The Group Interest
I-1
Rate for that Group will be identified with M%. If two or more Groups have the
fourth lowest Group Interest Rate pick one for this purpose, subject to the
restriction that each Group may be picked only once in the course of any such
selections pursuant to paragraphs A through D or this definition.
Second, apply the Generic Solution set forth below to determine the
Class Y Principal Reduction Amounts for the Distribution Date using the
identifications made above.
Class Y Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Class Principal Balances of the Class Y-aa, Class Y-bb,
Class Y-cc and Class Y-dd Regular Interests, respectively, will be reduced on
such Distribution Date by the allocation of Realized Losses and the distribution
of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
PAAB = the Subordinate Component Balance for Group AA after the allocation of
Realized Losses and distributions of principal on such Distribution Date.
PBBB = the Subordinate Component Balance for Group BB after the allocation
of Realized Losses and distributions of principal on such Distribution
Date.
PCCB = the Subordinate Component Balance for Group CC after the allocation of
Realized Losses and distributions of principal on such Distribution Date.
PDDB = the Subordinate Component Balance for Group DD after the allocation of
Realized Losses and distributions of principal on such Distribution Date.
R = the Remittance Rate on the Subordinate Certificates = (J%PAAB + K%PBBB +
L%PCCB + M%PDDB)/( PAAB + PBBB + PCCB + PDDB)
R1 = the weighted average of the Remittance Rates on the Group AA-L, Group
BB-L and Group CC-L Regular Interests (other than any Class P-L or Class
X-L Regular Interests or portions thereof related to such Groups) = (J%(Pjj
- (DELTA)Pjj) + K%(Pkk - (DELTA)Pkk) + ▇%(▇▇▇ - (▇▇▇▇▇)▇▇▇))/(▇▇▇ -
(▇▇▇▇▇)▇▇▇ ▇ ▇▇▇ - (▇▇▇▇▇)▇▇▇ + Pll - (DELTA)Pll)
R2 = the weighted average of the Remittance Rates on the Group BB-L, Group
CC-L and Group DD-L Regular Interests (other than any Class X-L or Class
P-L Regular Interests or portions thereof related to such Groups) = (K%(Pkk
- (DELTA)Pkk) + L%(Pll - (DELTA)Pll) + ▇%(▇▇▇ - (▇▇▇▇▇)▇▇▇))/(▇▇▇ -
(▇▇▇▇▇)▇▇▇ ▇ ▇▇▇ - (▇▇▇▇▇)▇▇▇ + Pmm - (DELTA)Pmm)
R3 = the weighted average of the Remittance Rates on the Group AA-L and Group
BB-L Regular Interests (other than any Class P-L or Class X-L Regular
Interests or portions thereof related to such Groups)
= (J%(Pjj - (DELTA)Pjj) + K%(Pkk - (DELTA)Pkk))/(Pjj - (DELTA)Pjj + Pkk -
(DELTA)Pkk)
I-2
R4 = the weighted average of the Remittance Rates on the Group CC-L and Group
DD-L Regular Interests (other than any Class X-L or Class P-L Regular
Interests or portions thereof related to such Groups) = (L%(Pll -
(DELTA)Pll) + M%(Pmm - (DELTA)Pmm))/(Pll - (DELTA)Pll + Pmm - (DELTA)Pmm)
r1 = the weighted average of the Class Y-aa, Class Y-bb and Class Y-cc
Remittance Rates = (J% Yjj + K% Ykk + L% Yll)/(Yjj + Ykk + Yll)
r2 = the weighted average of the Class Y-bb, Class Y-cc and Class Y-dd
Remittance Rates = (K% Ykk + L% Yll + M% Ymm)/(Ykk + Yll + Ymm)
r3 = the weighted average of the Class Y-aa and Class Y-bb Remittance Rates =
(J% Yjj + K% Ykk)/(Yjj + Ykk)
r4 = the weighted average of the Class Y-cc and Class Y-dd Remittance Rates =
(L% Yll + M% Ymm)/(Yll + Ymm)
Yjj = the principal balance of the Class Y-aa Regular Interests after
distributions on the prior Distribution Date.
Ykk = the principal balance of the Class Y-bb Regular Interests after
distributions on the prior Distribution Date.
Yll = the principal balance of the Class Y-cc Regular Interests after
distributions on the prior Distribution Date.
Ymm = the principal balance of the Class Y-dd Regular Interests after
distributions on the prior Distribution Date.
(DELTA)Yjj = the Class Y-aa Principal Reduction Amount.
(DELTA)Ykk = the Class Y-bb Principal Reduction Amount.
(DELTA)Yll = the Class Y-cc Principal Reduction Amount.
(DELTA)Ymm = the Class Y-dd Principal Reduction Amount.
Pjj = the aggregate principal balance of the Class Y-aa and Class Z-aa Regular
Interests after distributions on the prior Distribution Date, which is
equal to the aggregate principal balance of the Group AA Loans reduced by
the portion, if any, of the Principal Balance derived from Group AA Loans
of any Class P-M Regular Interest or Class R Certificate.
Pkk = the aggregate principal balance of the Class Y-bb and Class Z-bb Regular
Interests after distributions on the prior Distribution Date, which is
equal to the aggregate principal
I-3
balance of the Group BB Loans reduced by the portion, if any, of the
Principal Balance derived from Group BB Loans of any Class P-M Regular
Interest or Class R Certificate.
Pll = the aggregate principal balance of the Class Y-cc and Class Z-cc Regular
Interests after distributions on the prior Distribution Date, which is
equal to the aggregate principal balance of the Group CC Loans reduced by
the portion, if any, of the Principal Balance derived from Group CC Loans
of any Class P-M Regular Interest or Class R Certificate.
Pmm = the aggregate principal balance of the Class Y-dd and Class Z-dd Regular
Interests after distributions on the prior Distribution Date, which is
equal to the aggregate principal balance of the Group DD Loans reduced by
the portion, if any, of the Principal Balance derived from Group DD Loans
of any Class P-M Regular Interest or Class R Certificate.
(DELTA)Pjj = the aggregate principal reduction resulting on such Distribution
Date on the Group AA Loans as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (d)(i) or (d)(ii)
of the definition of REMIC I Distribution Amount) to be made and realized
losses to be allocated on such Distribution Date, reduced by the portion,
if any, of such reduction allocable to any Class P-M Regular Interest or
Class R Certificate, which is equal to the aggregate of the Class Y-aa and
Class Z-aa Principal Reduction Amounts.
(DELTA)Pkk= the aggregate principal reduction resulting on such Distribution
Date on the Group BB Loans as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (d)(i) or (d)(ii)
of the definition of REMIC I Distribution Amount) to be made and realized
losses to be allocated on such Distribution Date, reduced by the portion,
if any, of such reduction allocable to any Class P-M Regular Interest or
Class R Certificate, which is equal to the aggregate of the Class Y-bb and
Class Z-bb Principal Reduction Amounts.
(DELTA)Pll = the aggregate principal reduction resulting on such Distribution
Date on the Group CC Loans as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (d)(i) or (d)(ii)
of the definition of REMIC I Distribution Amount) to be made and realized
losses to be allocated on such Distribution Date, reduced by the portion,
if any, of such reduction allocable to any Class P-M Regular Interest or
Class R Certificate, which is equal to the aggregate of the Class Y-cc and
Class Z-cc Principal Reduction Amounts.
(DELTA)Pmm = the aggregate principal reduction resulting on such Distribution
Date on the Group DD Loans as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (d)(i) or (d)(ii)
of the definition of REMIC I Distribution Amount) to be made and realized
losses to be allocated on such Distribution Date, reduced by the portion,
if any, of such reduction allocable to any Class P-M Regular Interest or
Class R Certificate, which is equal to the aggregate of the Class Y-dd and
Class Z-dd Principal Reduction Amounts.
(alpha) = .0005
I-4
(gamma)1 = (R - R1)/(M% - R). If R=>L%, (gamma)1 is a non-negative number unless
its denominator is zero, in which event it is undefined.
(gamma)2 = (R - J%)/(R2 - R). If RL%, make the following additional definitions:
(delta)Yjj = 0, if R1< r1;
(R1- r1)( Yjj + Ykk + Yll)Yjj/((R1 - J%)Yjj + (R1 - K%)Ykk), if R1=> r1 and
R1=>K%; and (R1- r1)( Yjj + Ykk + Yll)/(R1 - J%), if R1=> r1 and R1K%;
(R1- r1)( Yjj + Ykk + Yll)Ykk/((R1 - K%)Ykk + (R1 - L%)Yll), if R1< r1 and
R1
r1 and R1=>K%; and 0, if R1=> r1 and R1K%;
(R1- r1)( Yjj + Ykk + Yll)Yll/((R1 - K%)Ykk + (R1 - L%)Yll), if R1< r1 and
R1 r1.
(delta)Y1, (delta)Ykk, and (delta)Yll are numbers between Yjj and 0, Ykk and 0,
and Yll and 0, respectively, such that
(J%(Yjj - (delta)Yjj) + K%( Ykk.- (delta)Ykk) + L%( Yll.-
(delta)Yll))/(Yjj - (delta)Yjj + Ykk.- (delta)Ykk + Yll.- (delta)Yll) = R1.
Y5 = Yjj - (delta)Yjj + Ykk.- (delta)Ykk + Yll.- (delta)Yll
P5 = Pjj + Pkk + Pll.
(DELTA)P5 = (DELTA)Pjj + (DELTA)Pkk + (DELTA)Pll.
I-5
AY5 = AYjj - (delta)Yjj + AYkk.- (delta)Ykk + AYll.- (delta)Yll
1. If ▇▇▇ - (▇▇▇▇▇)(▇▇▇ - (▇▇▇▇▇)▇▇▇) ▇▇ ▇, ▇▇- (▇▇▇▇▇)(▇▇ - (▇▇▇▇▇)▇▇) => 0,
and (gamma)1(P5 - (DELTA)P5) < (Pmm - (DELTA)Pmm), (DELTA)Ymm = ▇▇▇ -
(▇▇▇▇▇)(▇▇▇▇▇)▇(▇▇ - (▇▇▇▇▇)▇▇) and (DELTA)Y5 = Y5 - (alpha)(P5 -
(DELTA)P5).
2. If ▇▇▇ - (▇▇▇▇▇)(▇▇▇ - (▇▇▇▇▇)▇▇▇) ▇▇ ▇, ▇▇ - (▇▇▇▇▇)(▇▇ - (DELTA)P5) => 0,
and (gamma)1(P5 - (DELTA)P5) => (Pmm - (DELTA)Pmm), (DELTA)Ymm = Ymm -
(alpha)(Pmm - (DELTA)Pmm) and (DELTA)Y5 = Y5 - ((alpha)/(gamma)1)(Pmm -
(DELTA)Pmm).
3. If ▇▇▇ - (▇▇▇▇▇)(▇▇▇ - (▇▇▇▇▇)▇▇▇) ▇ ▇, ▇▇ - (▇▇▇▇▇)(▇▇ - (▇▇▇▇▇)▇▇) => 0,
and Y5 - (alpha)(P5 - (DELTA)P5) => Y5 - (Ymm/(gamma)1), (DELTA)Ymm = ▇▇▇ -
(▇▇▇▇▇)(▇▇▇▇▇)▇(▇▇ - (▇▇▇▇▇)▇▇) and (DELTA)Y5 = Y5 - (alpha)(P5 -
(DELTA)P5).
4. If ▇▇▇ - (▇▇▇▇▇)(▇▇▇ - (▇▇▇▇▇)▇▇▇) ▇ ▇, ▇▇ - (▇▇▇/(▇▇▇▇▇)▇) => 0, and Y5 -
(alpha)(P5 - (DELTA)P5) <= Y5 - (Ymm/(gamma)1), (DELTA)Ymm = 0 and
(DELTA)Y5 = Y5 - (Ymm/(gamma)1).
5. If Y5 - (alpha)(P5 - (DELTA)P5) < 0, Y5 - (Ymm/(gamma)1) < 0, and Ymm -
(alpha)(Pmm - (DELTA)Pmm) <= ▇▇▇ - ((▇▇▇▇▇)▇▇▇), (▇▇▇▇▇)▇▇▇ ▇ ▇▇▇ -
((▇▇▇▇▇)▇▇▇) and (DELTA)Y5 = 0.
6. If Y5 - (alpha)(P5 - (DELTA)P5) < 0, Ymm - (alpha)(Pmm - (DELTA)Pmm) => 0,
and ▇▇▇ - (▇▇▇▇▇)(▇▇▇ - (▇▇▇▇▇)▇▇▇) ▇▇ ▇▇▇ - ((▇▇▇▇▇)▇▇▇), (DELTA)Ymm = Ymm
- (alpha)(Pmm - (DELTA)Pmm) and (DELTA)Y5 = Y5 - ((alpha)/(gamma)1)(Pmm -
(DELTA)Pmm).
AYjj = (delta)Yjj + [(Yjj - (delta)Yjj)/(Yjj - (delta)Yjj + Ykk - (delta)Ykk +
Yll - (delta)Yll)] AY5
AYkk = (delta)Ykk + [(Ykk - (delta)Ykk)/(Yjj - (delta)Yjj + Ykk - (delta)Ykk +
Yll - (delta)Yll)]AY5
AYll = (delta)Yll + [(Yll - (delta)Yll)/(Yjj - (delta)Yjj + Ykk - (delta)Ykk +
Yll - (delta)Yll)]AY5
The purpose of the foregoing definitional provisions together with the related
provisions allocating Realized Losses and defining the Class Y and Class Z
Principal Distribution Amounts is to accomplish the following goals in the
following order of priority:
1. Making the ratio of Ymm to Y5 equal to (gamma)1 after taking account of
the allocation Realized Losses and the distributions that will be made
through end of the Distribution Date to which such provisions relate
and assuring that the Principal Reduction Amount for each of the Class
Y-aa, Class Y-bb, Class Y-cc, Class Y-dd, Class Z-aa, Class Z-bb, Class
Z-cc and Class Z-dd Regular Interests is greater than or equal to zero
for such Distribution Date;
2. Making the Class Y-aa Principal Balance less than or equal to 0.0005 of
the sum of the Class Y-aa and Class Z-aa Principal Balances, the Class
Y-bb Principal Balance less than or equal to 0.0005 of the sum of the
Class Y-bb and Class Z-bb Principal Balances, the Class Y-bb Principal
Balance less than or equal to 0.0005 of the sum of the Class Y-cc and
Class Z-cc Principal Balances and the Class Y-dd Principal Balance less
than or equal to 0.0005 of the sum of the Class Y-dd and Class Z-dd
Principal Balances in each
I-6
case after giving effect to allocations of Realized Losses and
distributions to be made through the end of the Distribution Date to
which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is Ymm and whose
denominator is the sum of Ymm and Class Z-dd Principal Balance and (b)
the fraction whose numerator is Y5 and whose denominator is the sum of
Y5, the Class Z-aa Principal Balance, the Class Z-bb Principal Balance
and the Class Z-cc Principal Balance as large as possible while
remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
Class Y Principal Reduction Amount to accomplish both of goals 1 and 2 above,
the amounts thereof should be adjusted to so as to accomplish such goals within
the requirement that each Class Y Principal Reduction Amount must be less than
or equal to the sum of (a) the principal portion of Realized Losses to be
allocated on the related Distribution Date for the related Group remaining after
the allocation of such Realized Losses to the related Class P-M Regular Interest
(if any) and (b) the remainder of the portion of the REMIC I Available
Distribution Amount derived from the related Group after reduction thereof by
the distributions to be made on such Distribution Date (i) to the related Class
P-M Regular Interest (if any), (ii) to the related Class X-M Regular Interests
and (iii) in respect of interest on the related Class Y and Class Z Regular
Interests, or, if both of such goals cannot be accomplished within such
requirement, such adjustment as is necessary shall be made to accomplish goal 1
within such requirement. In the event of any conflict among the provisions of
the definition of the Class Y Principal Reduction Amounts, such conflict shall
be resolved on the basis of the goals and their priorities set forth above
within the requirement set forth in the preceding sentence. If the formula
allocation of AY5 among AYjj, AYkk and AYll cannot be achieved because either
AYjj as so defined is greater than APjj, AYkk as so defined is greater than APkk
or AYll as so defined is greater than APll, such an allocation shall be made as
close as possible to the formula allocation within the requirement that AYjj <
APjj, AYkk < APkk and AYll < APll.
II. If R<=K%, make the following additional definitions:
(delta)Ykk = 0, if R2< r2;
(R2- r2)( Ykk + Yll + Ymm)Ykk/((R2 - K%)Ykk + (R2 - L%)Yll), if R2=> r2 and
R2=>L%; and (R2- r2)( Ykk + Yll + Ymm)/(R2 - K%), if R2=> r2 and R2L%;
(R2- r2)( Ykk + Yll + Ymm)Yll/((R2 - L%)Yll + (R2 - M%)Ymm), if R2< r2 and
R2
r2 and R2=>L%; and 0, if R2=> r2 and R2L%;
(R2- r2)( Ykk + Yll + Ymm)Ymm/((R2 - L%)Yll + (R2 - M%)Ymm), if R2< r2 and
R2 r2.
I-7
(delta)Ykk, (delta)Yll, and (delta)Ymm are numbers between Ykk and 0, Yll and 0,
and Ymm and 0, respectively, such that
(K%(Ykk - (delta)Ykk) + L%( Yll.- (delta)Yll) + M%( Ymm.- (delta)Ymm))/(Ykk
- (delta)Ykk + Yll.- (delta)Yll + Ymm.- (delta)Ymm) = R2.
Y6 = Ykk - (delta)Ykk + Yll.- (delta)Yll + Ymm.- (delta)Ymm
P6 = Pkk + Pll + Pmm.
(DELTA)P6 = (DELTA)Pkk + (DELTA)Pll + (DELTA)Pmm.
AY6 = AYkk - (delta)Ykk + AYll.- (delta)Yll + AYmm.- (delta)Ymm
1. If Y6 - (alpha)(P6 - (DELTA)P6) => 0, Yjj- (alpha)(Pjj - (DELTA)Pjj) => 0,
and (gamma)2(Pjj - (DELTA)Pjj) < (P6 - (DELTA)P6), (DELTA)Y6 = Y6 -
(alpha)(gamma)2(Pjj - (DELTA)Pjj) and (DELTA)Yjj = Yjj - (alpha)(Pjj -
(DELTA)Pjj).
2. If Y6 - (alpha)(P6 - (DELTA)P6) => 0, Yjj - (alpha)(Pjj - (DELTA)Pjj) => 0,
and (gamma)2(Pjj - (DELTA)Pjj) => (P6 - (DELTA)P6), (DELTA)Y6 = Y6 -
(alpha)(P6 - (DELTA)P6) and (DELTA)Yjj = Yjj - ((alpha)/(gamma)2)(P6 -
(DELTA)P6).
3. If Y6 - (alpha)(P6 - (DELTA)P6) < 0, Yjj - (alpha)(Pjj - (DELTA)Pjj) => 0,
and Yjj - (alpha)(Pjj - (DELTA)Pjj) => Yjj - (Y6/(gamma)2), (DELTA)Y6 = Y6
- (alpha)(gamma)2(Pjj - (DELTA)Pjj) and (DELTA)Yjj = Yjj - (alpha)(Pjj -
(DELTA)Pjj).
4. If Y6 - (alpha)(P6 - (DELTA)P6) < 0, Yjj - (Y6/(gamma)2) => 0, and Yjj -
(alpha)(Pjj - (DELTA)Pjj) <= Yjj - (Y6/(gamma)2), (DELTA)Y6 = 0 and
(DELTA)Yjj = Yjj - (Y6/(gamma)2).
5. If Yjj - (alpha)(Pjj - (DELTA)Pjj) < 0, Yjj - (Y6/(gamma)2) < 0, and Y6 -
(alpha)(P6 - (DELTA)P6) <= Y6 - ((gamma)2Yjj), (DELTA)Y6 = Y6 -
((gamma)2Yjj) and (DELTA)Yjj = 0.
6. If Yjj - (alpha)(Pjj - (DELTA)Pjj) < 0, Y6 - (alpha)(P6 - (DELTA)P6) => 0,
and Y6 - (alpha)(P6 - (DELTA)P6) => Y6 - ((gamma)2Yjj), (DELTA)Y6 = Y6 -
(alpha)(P6 - (DELTA)P6) and (DELTA)Yjj = Yjj - ((alpha)/(gamma)2)(P6 -
(DELTA)P6).
AYkk = (delta)Ykk + [(Ykk - (delta)Ykk)/(Ykk - (delta)Ykk + Yll - (delta)Yll +
Ymm - (delta)Ymm)] AY6
AYll = (delta)Yll + [(Yll - (delta)Yll)/(Ykk - (delta)Ykk + Yll - (delta)Yll +
Ymm - (delta)Ymm)] AY6
AYmm = (delta)Ymm + [(Ymm - (delta)Ymm)/(Ykk - (delta)Ykk + Yll - (delta)Yll +
Ymm - (delta)Ymm)]A Y6
The purpose of the foregoing definitional provisions together with the
related provisions allocating Realized Losses and defining the Class Y and Class
Z Principal Distribution Amounts is to accomplish the following goals in the
following order of priority:
1. Making the ratio of Y6 to Yjj equal to (gamma)2 after taking account of
the allocation Realized Losses and the distributions that will be made
through end of the Distribution Date to which such provisions relate
and assuring that the Principal Reduction Amount for each of the Class
Y-aa, Class Y-bb, Class Y-cc, Class Y-dd, Class Z-aa, Class Z-bb, Class
Z-cc
I-8
and Class Z-dd Regular Interests is greater than or equal to zero for
such Distribution Date;
2. Making the Class Y-aa Principal Balance less than or equal to 0.0005 of
the sum of the Class Y-aa and Class Z-aa Principal Balances, the Class
Y-bb Principal Balance less than or equal to 0.0005 of the sum of the
Class Y-bb and Class Z-bb Principal Balances, the Class Y-bb Principal
Balance less than or equal to 0.0005 of the sum of the Class Y-cc and
Class Z-cc Principal Balances and the Class Y-dd Principal Balance less
than or equal to 0.0005 of the sum of the Class Y-dd and Class Z-dd
Principal Balances in each case after giving effect to allocations of
Realized Losses and distributions to be made through the end of the
Distribution Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is Yjj and whose
denominator is the sum of Yjj and Class Z-aa Principal Balance and (b)
the fraction whose numerator is Y6 and whose denominator is the sum of
Y6, the Class Z-bb Principal Balance, the Class Z-cc Principal Balance
and the Class Z-dd Principal Balance as large as possible while
remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
Class Y Principal Reduction Amount to accomplish both of goals 1 and 2 above,
the amounts thereof should be adjusted to so as to accomplish such goals within
the requirement that each Class Y Principal Reduction Amount must be less than
or equal to the sum of (a) the principal portion of Realized Losses to be
allocated on the related Distribution Date for the related Group remaining after
the allocation of such Realized Losses to the related Class P-M Regular Interest
(if any) and (b) the remainder of the portion of the REMIC I Available
Distribution Amount derived from the related Group after reduction thereof by
the distributions to be made on such Distribution Date (i) to the related Class
P-M Regular Interest (if any), (ii) to the related Class X-M Regular Interests
and (iii) in respect of interest on the related Class Y and Class Z Regular
Interests, or, if both of such goals cannot be accomplished within such
requirement, such adjustment as is necessary shall be made to accomplish goal 1
within such requirement. In the event of any conflict among the provisions of
the definition of the Class Y Principal Reduction Amounts, such conflict shall
be resolved on the basis of the goals and their priorities set forth above
within the requirement set forth in the preceding sentence. If the formula
allocation of AY6 among AYkk, AYll and AYmm cannot be achieved because either
AYkk as so defined is greater than APkk, AYll as so defined is greater than APll
or AYmm as so defined is greater than APmm, such an allocation shall be made as
close as possible to the formula allocation within the requirement that AYkk <
APkk, AYll < APll and AYmm < APmm.
III. If K%<=R<=L%, make the following additional definitions:
(delta)Yjj = 0, if R3< r3; and
(R3- r3)( Yjj + Ykk)/(R3 - J%), if R3=> r3;
(delta)Ykk = 0, if R3=> r3; and
(R3- r3)( Yjj + Ykk)/(R3 - K%), if R3< r3;
I-9
(delta)Yll = 0, if R4< r4; and
(R4- r4)(Yll + Ymm)/(R4 - L%), if R4=> r4; and
(delta)Ymm = (R4- r4)(Yll + Ymm)/(R4 - M%), if R4< r4; and
0, if R4=> r4.
(delta)Yjj, (delta)Ykk, (delta)Yll, and (delta)Ymm are numbers between Yjj and
0, Ykk and 0, Yll and 0, and Ymm and 0, respectively, such that
(J%(Yjj - (delta)Yjj) + K%(Ykk.- (delta)Ykk))/(Yjj - (delta)Yjj + Ykk.-
(delta)Ykk) = R3 and
(L%(Yll - (delta)Yll) + M%(Ymm.- (delta)Ymm))/(Yll - (delta)Yll + Ymm.-
(delta)Ymm) = R4.
Y7 = Yjj - (delta)Yjj + Ykk.- (delta)Ykk
P7 = Pjj + Pkk.
(DELTA)P7 = (DELTA)Pjj + (DELTA)Pkk.
AY7 = AYjj - (delta)Yjj + AYkk.- (delta)Ykk.
Y8 = Yll.- (delta)Yll + Ymm.- (delta)Ymm.
P8 = Pll + Pmm.
(DELTA)P8 = (DELTA)Pll + (DELTA)Pmm.
AY8 = AYll.- (delta)Yll + AYmm.- (delta)Ymm
1. If Y8 - (alpha)(P8 - (DELTA)P8) => 0, Y7- (alpha)(P7 - (DELTA)P7) => 0, and
(gamma)3(P7 - (DELTA)P7) < (P8 - (DELTA)P8), (DELTA)Y8 = Y8 -
(alpha)(gamma)3(P7 -
(DELTA)P7) and (DELTA)Y7 = Y7 - (alpha)(P7 - (DELTA)P7).
2. If Y8 - (alpha)(P8 - (DELTA)P8) => 0, Y7 - (alpha)(P7 - (DELTA)P7) => ▇,
▇▇▇ (▇▇▇▇▇)▇(▇▇ - (▇▇▇▇▇)▇▇) ▇▇ (▇▇ - (▇▇▇▇▇)▇▇),
(▇▇▇▇▇)▇▇ = Y8 - (alpha)(P8 - (DELTA)P8) and (DELTA)Y7 = Y7 -
((alpha)/(gamma)3)(P8 - (DELTA)P8).
3. If Y8 - (alpha)(P8 - (DELTA)P8) < 0, Y7 - (alpha)(P7 - (DELTA)P7) => 0, and
Y7 - (alpha)(P7 - (DELTA)P7) => Y7 - (Y8/(gamma)3),
(DELTA)Y8 = Y8 - (alpha)(gamma)3(P7 - (DELTA)P7) and (DELTA)Y7 = Y7 -
(alpha)(P7 - (DELTA)P7).
4. If Y8 - (alpha)(P8 - (DELTA)P8) < 0, Y7 - (Y8/(gamma)3) => 0, and Y7 -
(alpha)(P7 - (DELTA)P7) <= Y7 - (Y8/(gamma)3), (DELTA)Y8 = 0 and
(DELTA)Y7 = Y7 - (Y8/(gamma)3).
5. If Y7 - (▇▇▇▇▇)(▇▇ - (▇▇▇▇▇)▇▇) ▇ ▇, ▇▇ - (▇▇/(▇▇▇▇▇)▇) < 0, and Y8 -
(alpha)(P8 - (DELTA)P8) <= Y8 - ((gamma)3Y7), (DELTA)Y8 = Y8 - ((gamma)3Y7)
and (DELTA)Y7 = 0.
6. If Y7 - (alpha)(P7 - (DELTA)P7) < 0, Y8 - (alpha)(P8 - (DELTA)P8) => 0, and
Y8 - (alpha)(P8 - (DELTA)P8) => Y8 - ((gamma)3Y7),
(DELTA)Y8 = Y8 - (alpha)(P8 - (DELTA)P8) and (DELTA)Y7 = Y7 -
((alpha)/(gamma)3)(P8 - (DELTA)P8).
I-10
AYjj = (delta)Yjj + [(Yjj - (delta)Yjj)/(Yjj - (delta)Yjj + Ykk - (delta)Ykk)]
AY7
AYkk = (delta)Ykk + [(Ykk - (delta)Ykk)/( Yjj - (delta)Yjj + Ykk -
(delta)Ykk)]AY7
AYll = (delta)Yll + [(Yll - (delta)Yll)/(Yll - (delta)Yll + Ymm - (delta)Ymm)]
AY8
AYmm = (delta)Ymm + [(Ymm - (delta)Ymm)/(Yll - (delta)Yll + Ymm - (delta)Ymm)]
AY8
The purpose of the foregoing definitional provisions together with the
related provisions allocating Realized Losses and defining the Class Y and Class
Z Principal Distribution Amounts is to accomplish the following goals in the
following order of priority:
1. Making the ratio of Y8 to Y7 equal to (gamma)3 after taking account of
the allocation Realized Losses and the distributions that will be made
through end of the Distribution Date to which such provisions relate
and assuring that the Principal Reduction Amount for each of the Class
Y-aa, Class Y-bb, Class Y-cc, Class Y-dd, Class Z-aa, Class Z-bb, Class
Z-cc and Class Z-dd Regular Interests is greater than or equal to zero
for such Distribution Date;
2. Making the Class Y-aa Principal Balance less than or equal to 0.0005 of
the sum of the Class Y-aa and Class Z-aa Principal Balances, the Class
Y-bb Principal Balance less than or equal to 0.0005 of the sum of the
Class Y-bb and Class Z-bb Principal Balances, the Class Y-bb Principal
Balance less than or equal to 0.0005 of the sum of the Class Y-cc and
Class Z-cc Principal Balances and the Class Y-dd Principal Balance less
than or equal to 0.0005 of the sum of the Class Y-dd and Class Z-dd
Principal Balances in each case after giving effect to allocations of
Realized Losses and distributions to be made through the end of the
Distribution Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is Y7 and whose
denominator is the sum of Y7, the Class Z-aa Principal Balance and the
Class Z-bb Principal Balance and (b) the fraction whose numerator is Y8
and whose denominator is the sum of Y8, the Class Z-cc Principal
Balance and the Class Z-dd Principal Balance as large as possible while
remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
Class Y Principal Reduction Amount to accomplish both of goals 1 and 2 above,
the amounts thereof should be adjusted to so as to accomplish such goals within
the requirement that each Class Y Principal Reduction Amount must be less than
or equal to the sum of (a) the principal portion of Realized Losses to be
allocated on the related Distribution Date for the related Group remaining after
the allocation of such Realized Losses to the related Class P-M Regular Interest
(if any) and (b) the remainder of the portion of the REMIC I Available
Distribution Amount derived from the related Group after reduction thereof by
the distributions to be made on such Distribution Date (i) to the related Class
P-M Regular Interest (if any), (ii) to the related Class X-M Regular Interests
and (iii) in respect of interest on the related Class Y and Class Z Regular
Interests, or, if both of such goals cannot be accomplished within such
requirement, such adjustment as is necessary shall be made to accomplish goal 1
within such requirement. In the event of any conflict among the provisions of
the definition of the Class Y Principal Reduction Amounts, such conflict shall
be
I-11
resolved on the basis of the goals and their priorities set forth above within
the requirement set forth in the preceding sentence. If the formula allocation
of AY7 between AYjj and AYkk, or of AY8 between AYll and AYmm cannot be achieved
because either AYjj as so defined is greater than APjj, AYkk as so defined is
greater than APkk, AYll as so defined is greater than APll or AYmm as so defined
is greater than APmm, such an allocation shall be made as close as possible to
the formula allocation within the requirement that AYjj < APjj, AYkk
< APkk, AYll < APll and AYmm < APmm.
I-12
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, AS AMENDED (THE "CODE").
THE CURRENT PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CURRENT PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT 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
Aggregate Initial Current Principal Balance of this
Date of Pooling and Servicing Agreement and Cut-off Date: Certificate as of the Cut-off Date:
December 1, 2003 $__________
First Distribution Date: Initial Current Principal Balance of this Certificate
January 26, 2004 as of the Cut-off Date: $__________
Master Servicer: CUSIP: __________
▇▇▇▇▇ Fargo Bank Minnesota, National Association
Assumed Final Distribution Date:
January 25, 2034
BEAR ▇▇▇▇▇▇▇ ALT-A TRUST 2003-6
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-6
evidencing a fractional undivided interest in the distributions
allocable to the Class [A] Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties and sold by STRUCTURED ASSET MORTGAGE INVESTMENTS II 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 II Inc. ("▇▇▇▇ ▇▇"), the Master Servicer, the
Securities Administrator 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 ▇▇▇▇
▇▇, the Master Servicer or the Trustee or any of their affiliates or any other
person. None of ▇▇▇▇ ▇▇, 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 ▇▇▇▇ ▇▇. The Mortgage Loans were
sold by EMC Mortgage Corporation ("EMC") to ▇▇▇▇ ▇▇. ▇▇▇▇▇ 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 ▇▇▇▇ ▇▇, as depositor (the "Seller"), the Master
Servicer, ▇▇▇▇▇ Fargo, as 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 Current
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 Current 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 Current Principal Balance of this Certificate is set forth above. The
Current 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
neither the Securities Administrator nor the Trustee is 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 Agreement 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 Agreement 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 Agreement 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, the Securities
Administrator 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, the Securities Administrator 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: December 23, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Trustee
By:
---------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [A] 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 Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
Signature by or on behalf of assignor
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-2
FORM OF CLASS M, B-1, B-2 AND B-3 CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
CLASS A [INSERT AS APPLICABLE: CLASS M, CLASS B-1 AND CLASS B-2] CERTIFICATES AS
DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THE CURRENT 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 CURRENT PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE
MAY ASCERTAIN ITS CURRENT 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, B-1, B-2 AND B-3] 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)
SUCH CERTIFICATE IS RATED AT LEAST "BBB-" OR ITS EQUIVALENT BY FITCH, S&P AND
▇▇▇▇▇'▇, (II) IT IS NOT A PLAN OR INVESTING WITH "PLAN ASSETS"?OF ANY PLAN,
(III) (1) IT IS AN INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR
HOLD THE CERTIFICATE OR INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL
ACCOUNT," AS SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 95-60, AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE
BEEN SATISFIED.
Certificate No.1 Adjustable Pass-Through Rate
Class [M, ▇-▇, ▇-▇, ▇-▇] Subordinate
Aggregate Initial Current Principal Balance of this
Date of Pooling and Servicing Agreement and Cut-off Date: Certificate as of the Cut-off Date:
December 1, 2003 $__________
First Distribution Date: Initial Current Principal Balance of this Certificate
January 26, 2004 as of the Cut-off Date: $__________
Master Servicer: CUSIP: __________
▇▇▇▇▇ Fargo Bank Minnesota, National Association
Assumed Final Distribution Date:
January 25, 2034
BEAR ▇▇▇▇▇▇▇ ALT-A TRUST 2003-6
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-6
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 II 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 II Inc. ("▇▇▇▇ ▇▇"), the Master Servicer, the
Securities Administrator 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 ▇▇▇▇
▇▇, the Master Servicer or the Trustee or any of their affiliates or any other
person. None of ▇▇▇▇ ▇▇, 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 ▇▇▇▇ ▇▇. The Mortgage Loans were
sold by EMC Mortgage Corporation ("EMC") to ▇▇▇▇ ▇▇. ▇▇▇▇▇ 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 ▇▇▇▇ ▇▇, as depositor (the "Seller"), the Master
Servicer, ▇▇▇▇▇ Fargo, as 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 Current
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 Current 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 Current Principal Balance of this Certificate is set forth above. The
Current 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)
such Certificate is rated at least "BBB-" or its equivalent by Fitch, S&P and
▇▇▇▇▇'▇, (ii) it is not a Plan or investing with "plan assets" of any Plan,
(iii)(1) it is an insurance company, (2) the source of funds used to acquire or
hold the Certificate or interest therein is an "insurance company general
account," as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.
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
neither the Securities Administrator nor the Trustee is 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 Agreement 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 Agreement 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 Agreement 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, the Securities
Administrator and any agent of any of them may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Seller, the Master Servicer, the Trustee, the Securities Administrator 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: December 23, 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 Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
Signature by or on behalf of assignor
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-3
FORM OF CLASS B-4, B-5 AND B-6 CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
CLASS A, [INSERT AS APPLICABLE: CLASS M, CLASS B-1, CLASS B-2, CLASS B-3, CLASS
B-4 AND CLASS B-5] CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED
BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CURRENT PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CURRENT PRINCIPAL BALANCE OF THIS CERTIFICATE
WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT 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 OR (2) 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 (A
"PLAN") THAT 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 (THE "CODE"), OR BY A PERSON USING "PLAN ASSETS" OF A PLAN,
UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL
FOR THE BENEFIT OF THE TRUSTEE, MASTER SERVICER AND THE SECURITIES ADMINISTRATOR
AND ON WHICH THEY MAY RELY WHICH IS SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE OF THIS 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, 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 Adjustable Pass-Through Rate
Class [B-4. B-5, B-6] Senior
Aggregate Initial Current Principal Balance of this
Date of Pooling and Servicing Agreement and Cut-off Date: Certificate as of the Cut-off Date:
December 1, 2003 $____________
Initial Current Principal Balance of this Certificate
First Distribution Date: as of the Cut-off Date:
January 26, 2004 $____________
Master Servicer: CUSIP: __________
▇▇▇▇▇ Fargo Bank Minnesota, National Association
Assumed Final Distribution Date:
January 25, 2034
BEAR ▇▇▇▇▇▇▇ ALT-A TRUST 2003-6
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-6
evidencing a fractional undivided interest in the distributions
allocable to the Class [B-4, B-5, B-6] 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 II 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 II Inc. ("▇▇▇▇ ▇▇"), the Master Servicer, the
Securities Administrator 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 ▇▇▇▇
▇▇, the Master Servicer or the Trustee or any of their affiliates or any other
person. None of ▇▇▇▇ ▇▇, 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 ▇▇▇▇ ▇▇. The Mortgage
Loans were sold by EMC Mortgage Corporation ("EMC") to ▇▇▇▇ ▇▇. ▇▇▇▇▇ 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 ▇▇▇▇ ▇▇, as depositor (the "Seller"),
the Master Servicer, ▇▇▇▇▇ Fargo, as 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 Current
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 Current Principal Balance of this Certificate is set forth above. The
Current 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 (a) in reliance upon Rule
144A under the 1933 Act or (b) to a transferee that is an "Institutional
Accredited Investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D 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) if requested by the Trustee, 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-4, B-5, B-6] Certificate will be
made unless the Trustee and the Securities Administrator have received either
(i) 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"), and Section 4975 of the Internal Revenue Code, as amended (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 or (ii) a representation letter stating that the transferee is not
acquiring directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement (a "Plan") that is subject to Title I of ERISA,
and/or Section 4975 of the Code, or by a person using "plan assets" of a 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
neither the Securities Administrator nor the Trustee is 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 Agreement 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 Agreement 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 Agreement 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, the Securities
Administrator 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, the Securities Administrator 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: December 23, 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-4, B-5, B-6] 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 Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
Signature by or on behalf of assignor
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to ______________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-4
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, AS AMENDED (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 OR (2) 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 (A
"PLAN") THAT 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 (THE "CODE"), OR BY A PERSON USING "PLAN ASSETS" OF A PLAN,
UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL
FOR THE BENEFIT OF THE TRUSTEE, MASTER SERVICER AND THE SECURITIES ADMINISTRATOR
AND ON WHICH THEY MAY RELY WHICH IS SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE OF THIS 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, 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.
Certificate No.1 Percentage Interest: 100%
Class R
Aggregate Initial Current Principal Balance of this
Date of Pooling and Servicing Agreement and Cut-off Date: Certificate as of the Cut-off Date:
December 1, 2003 $100.00
Initial Current Principal Balance of this Certificate
First Distribution Date: as of the Cut-off Date:
January 26, 2004 $100.00
Master Servicer: CUSIP: __________
▇▇▇▇▇ Fargo Bank Minnesota, National Association
Assumed Final Distribution Date:
January 25, 2034
BEAR ▇▇▇▇▇▇▇ ALT-A TRUST 2003-6
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-6
evidencing a fractional undivided interest in the distributions
allocable to the Class R Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties and sold by STRUCTURED ASSET MORTGAGE II 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 II Inc. ("▇▇▇▇ ▇▇"), the Master Servicer, the
Securities Administrator 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 ▇▇▇▇
▇▇, the Master Servicer or the Trustee or any of their affiliates or any other
person. None of ▇▇▇▇ ▇▇, 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 ▇▇▇▇ ▇▇. The Mortgage
Loans were sold by EMC Mortgage Corporation ("EMC") to ▇▇▇▇ ▇▇. ▇▇▇▇▇ 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 ▇▇▇▇ ▇▇, as depositor (the "Seller"),
the Master Servicer, ▇▇▇▇▇ Fargo, as 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 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 (a) in reliance upon Rule 144A under the 1933
Act or (b) to a transferee that is an "Institutional Accredited Investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D 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) if requested by the Trustee, 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 R Certificate will be made unless
the Trustee and the Securities Administrator have received either (i) 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"), and
Section 4975 of the Internal Revenue Code, as amended (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 or (ii)
a representation letter stating that the transferee is not acquiring directly or
indirectly by, or on behalf of, an employee benefit plan or other retirement
arrangement (a "Plan") that is subject to Title I of ERISA, and/or Section 4975
of the Code, or by a person using "plan assets" of a 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
neither the Securities Administrator nor
the Trustee is 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 Agreement 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 Agreement 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 Agreement 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, the Securities
Administrator 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, the Securities Administrator 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: December 23, 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 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 Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
Signature by or on behalf of assignor
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to ______________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT B
MORTGAGE LOAN SCHEDULE
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;
(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; and
(x) 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.
EXHIBIT C
[RESERVED]
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
RE: Pooling and Servicing Agreement, dated as of December 1, 2003 among
Structured Asset Mortgage Investments II 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 2003-6, Mortgage
Pass-Through Certificates, Series 2003-6
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:
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] (record or
beneficial owner of the Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through
Certificates, Series 2003-6, Class R Certificates) (the "Class R Certificates")
(the "Owner"), 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 the Owner (i) is not and will not be as of [Closing Date][date
of purchase] a "disqualified organization" within the meaning of Section
860E(e)(5) of the Internal Revenue Code of 1986, as amended (the "Code") or an
"electing large partnership" within the meaning of Section 775 of the Code, (ii)
will endeavor to remain other than a disqualified organization and an electing
large partnership for so long as it retains its ownership in the Class R
Certificates and (iii) is acquiring the Class R Certificates for its own account
or for the account of another Owner from which it has received an affidavit and
agreement in substantially the same form as this affidavit and agreement. (For
this purpose, a "disqualified organization" means an electing large partnership
under Section 775 of the Code, the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing
(other than an instrumentality all of the activities of which are subject to tax
and, except for the Federal Home Loan Mortgage Corporation, a majority of whose
board of directors is not selected by any such governmental entity) or any
foreign government, international organization or any agency or instrumentality
of such foreign government or organization, any rural electric or telephone
cooperative, or any organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such organization is subject
to the tax on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations or electing
large partnerships under the Code, that applies to all transfers of Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
(or, with respect to transfers to electing large partnerships, on each such
partnership), or, if such transfer is through an agent (which person includes a
broker, nominee or middleman) for a disqualified organization, on the agent;
(iii) that the person (other than with respect to transfers to electing large
partnerships) otherwise liable for the tax shall be relieved of liability for
the tax if the transferee furnishes to such person an affidavit that the
transferee is not a disqualified organization and, at the time of transfer, such
person does not have actual knowledge that the affidavit is false; and (iv) that
the Class R Certificates may be "noneconomic
residual interests" within the meaning of Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer was to impede the
assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding Class R Certificates if either the pass-through entity is an
electing large partnership under Section 775 of the Code or if at any time
during the taxable year of the pass-through entity a disqualified organization
is the record holder of an interest in such entity. (For this purpose, a "pass
through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives.)
5. That the Owner is aware that the Trustee will not register the
transfer of any Class R Certificates unless the transferee, or the transferee's
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees that it will not consummate any such transfer if it knows or believes
that any of the representations contained in such affidavit and agreement are
false.
6. That the Owner has reviewed the restrictions set forth on the face
of the Class R Certificates and the provisions of Section 5.05 of the Pooling
and Servicing Agreement under which the Class R Certificates were issued. The
Owner expressly agrees to be bound by and to comply with such restrictions and
provisions.
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.
8. The Owner's Taxpayer Identification Number is # _______________.
9. This affidavit and agreement relates only to the Class R
Certificates held by the Owner and not to any other holder of the Class R
Certificates. The Owner understands that the liabilities described herein relate
only to the Class R Certificates.
10. That no purpose of the Owner relating to the transfer of any of the
Class R Certificates by the Owner is or will be to impede the assessment or
collection of any tax; in making this representation, the Owner warrants that
the Owner is familiar with (i) Treasury Regulation Section 1.860E-1 (c) and
recent amendments thereto, effective as of August 19, 2002, and (ii) the
preamble describing the adoption of the amendments to such regulation, which is
attached hereto as Exhibit 1.
11. That the Owner has no present knowledge or expectation that it will
be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the Class R Certificates
that the Owner intends to pay taxes associated with holding such Class R
Certificates as they become due, fully understanding that it may incur tax
liabilities in excess of any cash flows generated by the Class R Certificates.
12. That the Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Class R Certificates remain outstanding.
13. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
14. The Owner hereby agrees that it will not cause income from the
Class R Certificates to be attributable to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax treaty) of the Owner
or another United States taxpayer.
15. (a) The Purchaser hereby certifies, represents and warrants to, and
covenants with the Company, the Trustee and the Master Servicer that the
following statements in (1) or (2) are accurate:
(1) The Certificates (i) are not being acquired by, and will
not be transferred to, any employee benefit plan within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or other retirement arrangement, including individual retirement
accounts and annuities, ▇▇▇▇▇ plans and bank collective investment funds and
insurance company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ? 2510.3-101 or
otherwise under ERISA, and (iii) will not be transferred to any entity that is
deemed to be investing plan assets within the meaning of the DOL regulation, 29
C.F.R. ? 2510.3-101 or otherwise under ERISA;
(2) The purchase of Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code, will not subject the Company, the
Trustee or the Master Servicer to any obligation in addition to those undertaken
in the Pooling and Servicing Agreement and, with respect to each source of funds
("Source") being used by the Purchaser to acquire the Certificates, each of the
following statements is accurate: (a) the Purchaser is an insurance company; (b)
the Source is assets of the Purchaser's "general account;" (c) the conditions
set forth in Prohibited Transaction Class Exemption ("PTCE") 95-60 issued by the
DOL have been satisfied and the purchase, holding and transfer of Certificates
by or on behalf of the Purchaser are exempt under PTCE 95-60; and (d) the amount
of reserves and liabilities for such general account contracts held by or on
behalf of any Plan does not exceed 10% of the total reserves and liabilities of
such general account plus surplus as of the date hereof (for purposes of this
clause, all Plans maintained by the same employer (or affiliate thereof) or
employee organization are deemed to be a single Plan) in connection with its
purchase and holding of such Certificates; or
(b) The Owner will provide the Trustee, the Company and the
Master Servicer with an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee, the Company and the Master Servicer to
the effect that the purchase of Certificates is permissible
under applicable law, will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Trustee, the Company or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Pooling and Servicing Agreement.
In addition, the Owner hereby certifies, represents and
warrants to, and covenants with, the Company, the Trustee and the Master
Servicer that the Owner will not transfer such Certificates to any Plan or
person unless either such Plan or person meets the requirements set forth in
either (a) or (b) above.
Capitalized terms used but not defined herein shall have the
meanings assigned in the Pooling and Servicing 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:
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___.
EXHIBIT F-1
FORM OF INVESTMENT LETTER (NON-RULE 144A)
______________,200___
Structured Asset Mortgage Investments II Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
JPMorgan Chase Bank
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Bear ▇▇▇▇▇▇▇ Alt-A Trust 2003-6
Re: Bear ▇▇▇▇▇▇▇ Alt-A Trust 2003-6
Mortgage Pass-Through Certificates, Series 2003-6, Class
--------------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
______________ (the "Seller") $_________ initial Current Principal Balance of
Mortgage Pass-Through Certificates, Series 2003-6, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of December 1, 2003 among
Structured Asset Mortgage Investments II 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.
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.
6. The Purchaser (if the Certificate is not rated at
least "BBB-" or its equivalent by Fitch, S&P or ▇▇▇▇▇'▇):
(a) is not an employee benefit or other plan
subject to the prohibited transaction provisions of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (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
within the meaning of the Department of Labor ("DOL")
regulation at 29 C.F.R. ss.2510.3-101; or
(b) is an insurance company, the source of
funds to be used by it to purchase the Certificates is an
"insurance company general account" (within the meaning of DOL
Prohibited Transaction Class Exemption ("PTCE") 95-60),
2
and the purchase is being made in reliance upon the
availability of the exemptive relief afforded under Sections I
and III of PTCE 95-60.]
In addition, the Purchaser hereby certifies, represents and warrants
to, and covenants with, the Company, the Trustee, the Securities Administrator
and the Master Servicer that the Purchaser will not transfer such Certificates
to any Plan or person unless such Plan or person meets the requirements set
forth in either 6(a) or (b) above.
Very truly yours,
[PURCHASER]
By:
-------------------------------
Name:
Title:
3
EXHIBIT F-2
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
The undersigned seller, as registered holder (the "Seller"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with,
the Seller, the Trustee and the Master Servicer (as defined to the Pooling and
Servicing Agreement, dated as of December 1, 2003 (the "Agreement"), among the
Company, EMC, ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as master servicer (the "Master
Servicer"), and JPMorgan Chase Bank, as trustee (the "Trustee")) as follows:
(a) The Buyer understands that the Rule 144A Securities
have not been registered under the 1933 Act or the securities laws of
any state.
(b) The Buyer considers itself a substantial,
sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Rule 144A
Securities.
(c) The Buyer has been furnished with all information
regarding the Rule 144A Securities that it has requested from the
Seller, the Trustee or the Master Servicer.
(d) Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security
from, or otherwise approached or negotiated with respect to the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the
Rule 144A Securities under the 1933 Act or that would render the
disposition of the Rule 144A Securities a violation of Section 5 of the
1933 Act or require registration pursuant thereto, nor will it act, nor
has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
(e) The Buyer is a "qualified institutional buyer" as that
term is defined in Rule 144A under the 1933 Act and has completed
either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other qualified
institutional buyers, understands that such Rule 144A Securities may be
resold, pledged or transferred only (i) to a person reasonably believed
to be a qualified institutional buyer that purchases for its own
account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the 1933 Act.
[3. The Buyer (if the Rule 144A Securities are not rated at
least "BBB-" or its equivalent by Fitch, S&P or ▇▇▇▇▇'▇):
(a) is not an employee benefit or other plan subject to
the prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (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 within the meaning of
the Department of Labor ("DOL") regulation at 29 C.F.R. ss. 2510.3-101;
or
(b) is an insurance company, the source of funds to be
used by it to purchase the Certificates is an "insurance company
general account" (within the meaning of DOL Prohibited Transaction
Class Exemption ("PTCE") 95-60), and the purchase is being made in
reliance upon the availability of the exemptive relief afforded under
Sections I and III of PTCE 95-60.]
4. This document may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of
which, when so executed, shall be deemed to be an original; such
counterparts, together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.
---------------------------------------- -------------------------------------
Print Name of Seller Print Name of Buyer
By: By:
------------------------------------- ----------------------------------
Name: Name:
Title: Title:
Taxpayer Identification Taxpayer Identification:
No. No:
------------------------------------ ---------------------------------
Date: Date:
----------------------------------- --------------------------------
ANNEX 1 TO EXHIBIT F
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $__________________________ in securities (except for
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
-- Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code.
-- Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
-- Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements.
-- Broker-Dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
-- Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State or
territory or the District of Columbia.
-- State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
-- ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
-- Investment Adviser. The Buyer is an investment adviser
registered under the Investment Advisers Act of 1940.
-- SBIC. The Buyer is a Small Business Investment Company
licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of
1958.
-- Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
-- Trust Fund. The Buyer is a trust fund whose trustee is a bank
or trust company and whose participants are exclusively (a)
plans established and maintained by a State, its political
subdivisions, or any agency or instrumentality of the State or
its political subdivisions, for the benefit of its employees,
or (b) employee benefit plans within the meaning of Title I of
the Employee Retirement Income Security Act of 1974, but is
not a trust fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Buyer may have included securities owned by
subsidiaries of the Buyer, but only if such subsidiaries are consolidated with
the Buyer in its financial statements prepared in accordance with generally
accepted accounting principles and if the investments of such subsidiaries are
managed under the Buyer's direction. However, such securities were not included
if the Buyer is a majority-owned, consolidated subsidiary of another enterprise
and the Buyer is not itself a reporting company under the Securities Exchange
Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
__________ ___________ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Buyer will only purchase for the account of a third party that at
the time is a "qualified institutional buyer" within the meaning of Rule 144A.
In addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
-------------------------------------
Print Name of Buyer
By:
--------------------------------
Name:
Title:
Date:
--------------------------------
EXHIBIT G
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of December 23, 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 II
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, EMC, the Master Servicer and the Trustee
have entered into a Pooling and Servicing Agreement, dated as of December 1,
2003, relating to the issuance of Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage
Pass-Through Certificates, Series 2003-6 (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
AMortgage 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.
(1) 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
AMortgage Loan Schedule@).
(2) 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.
(3) 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.
(4) In reviewing the Mortgage Files as provided herein and in
the Pooling and Servicing Agreement, the Custodian shall make no representation
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.
Upon receipt of written request from the Trustee, the
Custodian shall as soon as practicable supply the Trustee with a list of all of
the documents relating to the Mortgage Loans missing from the Mortgage Files.
Section 2.4. Notification of Breaches of Representations and
Warranties. Upon discovery by the Custodian of a breach of any representation or
warranty made by the 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
ARequest for Release@) substantially in the form of Exhibit D to the Pooling and
Servicing Agreement signed by a Servicing Officer of the related Servicer
stating that it has received payment in full of a Mortgage Loan or that payment
in full will be escrowed in a manner customary for such purposes, the Custodian
agrees promptly to release to the related Servicer the related Mortgage File.
The Company shall deliver to the Custodian and the Custodian agrees to accept
the Mortgage Note and other documents constituting the Mortgage File with
respect to any Substitute Mortgage Loan.
From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy, the related Servicer shall deliver to the
Custodian a Request for Release signed by a Servicing Officer requesting that
possession of all of the Mortgage File be released to the related Servicer and
certifying as to the reason for such release and that such release will not
invalidate any insurance coverage provided in respect of the Mortgage Loan under
any of the Insurance Policies. Upon receipt of the foregoing, the Custodian
shall deliver the Mortgage File to the related Servicer. The related Servicer
shall cause each Mortgage File or any document therein so released to be
returned to the Custodian when the need therefore by the related Servicer no
longer exists, unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Master Servicer Collection Account or the Distribution Account or (ii) the
Mortgage File or such document has been delivered to an attorney, or to a public
trustee or other public official as required by law, for purposes of initiating
or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property either judicially or non judicially, and the related Servicer
has delivered to the Custodian a certificate of a Servicing Officer certifying
as to the name and address of the Person to which such Mortgage File or such
document was delivered and the purpose or purposes of such delivery.
At any time that a Servicer is required to deliver to the
Custodian a Request for Release, the Servicer shall deliver two copies of the
Request for Release if delivered in hard copy or the Servicer may furnish such
Request for Release electronically to the Custodian, in which event the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release. In connection with any Request for Release of a Mortgage
File because of a repurchase of a Mortgage Loan, such Request for Release shall
be accompanied by an assignment of mortgage, without recourse, 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 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
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.
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 II
INVESTMENTS INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Master Servicer
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: BSALTA 2003-6 By:
-------------------------------------
Name:
Title:
Address: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Custodian
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By:
Attention: BSALTA 2003-6 -------------------------------------
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Name:
Title:
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the ___ day of December 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 December 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 December 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 II 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 December 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
December __, 20__
JPMorgan Chase Bank Structured Asset Mortgage Investments II Inc.
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments II Inc.
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates, Series 2003-6
Re: Custodial Agreement, dated as of December 23, 2003, by and among
JPMorgan Chase Bank, Structured Asset Mortgage Investments II Inc.
and ▇▇▇▇▇ Fargo Bank Minnesota, National Association relating to
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates,
Series 2003-6
------------------------------------------------------------------
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 II Inc.
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments II Inc.
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates, Series 2003-6
Re: Custodial Agreement, dated as of December 23, 2003, by and among
JPMorgan Chase Bank, Structured Asset Mortgage Investments II Inc.
and ▇▇▇▇▇ Fargo Bank Minnesota, National Association relating to
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates,
Series 2003-6
------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned
Custodial Agreement, the undersigned, as Custodian, hereby certifies that it has
received a Mortgage File 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 II Inc.
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments II Inc.
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates, Series 2003-6
Re: Custodial Agreement, dated as of December 23, 2003, by and among
JPMorgan Chase Bank, Structured Asset Mortgage Investments II Inc.
and ▇▇▇▇▇ Fargo Bank Minnesota, National Association relating to
Bear ▇▇▇▇▇▇▇ ALT-A Trust, Mortgage Pass-Through Certificates,
Series 2003-6
------------------------------------------------------------------
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:
(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) 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.
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:
-------------------------------
EXHIBIT H-1
ALLIANCE SERVICING AGREEMENT
(Provided Upon Request)
EXHIBIT I
ASSIGNMENT AGREEMENT
(Provided Upon Request)
EXHIBIT J
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of December 23,
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
II 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 2003-6 (the "Certificates"), under a pooling
and servicing agreement, to be dated as of December 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 December 22, 2003 to the Prospectus, dated September 29, 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
December 22, 2003 to an underwriting agreement dated July 29, 2003, 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)1.
Bear ▇▇▇▇▇▇▇: Bear, ▇▇▇▇▇▇▇ & Co. Inc.
Closing Date: December 23, 2003.
Cut-off Date: December 1, 2003.
Cut-off Date Balance: $[_______].
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
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1 Please contact Bear, ▇▇▇▇▇▇▇ & Co. Inc. for Purchase Price.
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 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 anti-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.
(i) 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.
(ii) 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.
(iii) 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.
(i) 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.
(ii) 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 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.
(iii) 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.
(i) 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
(i) 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.
(ii) 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 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;
(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, recording and
all applicable predatory lending 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, recording and all applicable predatory lending
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, 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) 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 home loan" under any state or
federal law, 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 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:
(i) 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;
(ii) 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;
(iii) 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;
(iv) 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 obtained, given or
made and, in connection with the recordation of the Mortgages, powers
of attorney or assignments of Mortgages not yet completed;
(v) 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);
(vi) 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
(vii) the Mortgage Loan Seller's Information (as defined in
Section 13(a) hereof) 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:
(i) 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;
(ii) 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;
(iii) 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
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;
(iv) 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;
(v) 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);
(vi) 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
(vii) the Purchaser's Information (as defined in Section 13(b)
hereof) 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.
(1) 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:
(a) 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 Servicing Agreement; and the
Purchaser shall have received certificates to that effect
signed by authorized officers of the Mortgage Loan Seller.
(b) 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.
(c) The Certificates to be sold to Bear ▇▇▇▇▇▇▇
pursuant to the Underwriting Agreement and the Purchase Agreement shall
have been issued and sold to Bear ▇▇▇▇▇▇▇.
(d) 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.
(2) 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:
(a) 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.
(b) 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 17 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 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.
(i) 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.
(ii) 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. Indemnification.
(i) The Mortgage Loan Seller shall indemnify and hold harmless
the Purchaser and its directors, officers and controlling persons (as
defined in Section 15 of the Securities Act) from and against any loss,
claim, damage or liability or action in respect thereof, to which they
or any of them may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon (i) any untrue statement of a material
fact contained in the Mortgage Loan Seller's Information as identified
in Exhibit 3, the omission to state in the Prospectus Supplement or
Prospectus (or any amendment thereof or supplement thereto approved by
the Mortgage Loan Seller and in which additional Mortgage Loan Seller's
Information is identified), in reliance upon and in conformity with
Mortgage Loan Seller's Information a material fact required to be
stated therein or necessary to make the statements therein in light of
the circumstances in which they were made, not misleading, (ii) any
representation or warranty assigned or made by the Mortgage Loan Seller
in Section 7 or Section 8 hereof being, or alleged to be, untrue or
incorrect, or (iii) any failure by the Mortgage Loan Seller to perform
its obligations under this Agreement; and the Mortgage Loan Seller
shall reimburse the Purchaser and each other indemnified party for any
legal and other expenses reasonably incurred by them in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action.
The foregoing indemnity agreement is in addition to any liability which
the Mortgage Loan Seller otherwise may have to the Purchaser or any other such
indemnified party.
(ii) The Purchaser shall indemnify and hold harmless the
Mortgage Loan Seller and its respective directors, officers and
controlling persons (as defined in Section 15 of the Securities Act)
from and against any loss, claim, damage or liability or action in
respect thereof, to which they or any of them may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon (i) any untrue
statement of a material fact contained in the Purchaser's
Information as identified in Exhibit 4, the omission to state in the
Prospectus Supplement or Prospectus (or any amendment thereof or
supplement thereto approved by the Purchaser and in which additional
Purchaser's Information is identified), in reliance upon and in
conformity with the Purchaser's Information, a material fact required
to be stated therein or necessary to make the statements therein in
light of the circumstances in which they were made, not misleading,
(ii) any representation or warranty made by the Purchaser in Section 9
hereof being, or alleged to be, untrue or incorrect, or (iii) any
failure by the Purchaser to perform its obligations under this
Agreement; and the Purchaser shall reimburse the Mortgage Loan Seller,
and each other indemnified party for any legal and other expenses
reasonably incurred by them in connection with investigating or
defending or preparing to defend any such loss, claim, damage,
liability or action. The foregoing indemnity agreement is in addition
to any liability which the Purchaser otherwise may have to the Mortgage
Loan Seller, or any other such indemnified party,
(iii) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
each party against whom indemnification is to be sought in writing of
the commencement thereof (but the failure so to notify an indemnifying
party shall not relieve it from any liability which it may have under
this Section 13 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may
have otherwise). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent it may elect by written notice
delivered to the indemnified party promptly (but, in any event, within
30 days) after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing,
the indemnified party or parties shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties
unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the
defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded that
there is a conflict of interest between itself or themselves and the
indemnifying party in the conduct of the defense of any claim or that
the interests of the indemnified party or parties are not substantially
co-extensive with those of the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying
parties (provided, however, that the indemnifying party shall be liable
only for the fees and expenses of one counsel in addition to one local
counsel in the jurisdiction involved. Anything in this subsection to
the contrary notwithstanding, an indemnifying party shall not be liable
for any settlement or any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably
withheld.
(iv) If the indemnification provided for in paragraphs (a) and
(b) of this Section 13 shall for any reason be unavailable to an
indemnified party in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to in Section 13, then the
indemnifying party shall in lieu of indemnifying the indemnified party
contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect
thereof, in such proportion as shall be appropriate to reflect the
relative benefits received by the Mortgage Loan Seller on the one hand
and the Purchaser on the other from the purchase and sale of the
Mortgage Loans, the offering of the Certificates and the other
transactions contemplated hereunder. No person found liable for a
fraudulent misrepresentation shall be entitled to contribution from any
person who is not also found liable for such fraudulent
misrepresentation.
(v) The parties hereto agree that reliance by an indemnified
party on any publicly available information or any information or
directions furnished by an indemnifying party shall not constitute
negligence, bad faith or willful misconduct by such indemnified party.
SECTION 14. 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 II
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.
SECTION 15. 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 16. 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 17. 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 18. 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 19. 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 20. Amendment. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.
SECTION 21. 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.
SECTION 22. 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 23. 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 and, to the extent specified in Section 13 hereof, Bear
▇▇▇▇▇▇▇, and their directors, officers and controlling persons (within the
meaning of federal securities laws). 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 24. 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 25. 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 26. 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]
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 II
INVESTMENTS INC.
By:
Name:
Title:
EXHIBIT 1
CONTENTS OF MORTGAGE FILE
With respect to each Mortgage Loan, 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.
(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.
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;
(u) the Periodic Rate Cap, if applicable;
(v) the number of days delinquent, if any; and
(w) which Mortgage Loans adjust after an initial fixed-rate period of five,
seven or ten years.
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.
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."
EXHIBIT 4
PURCHASER'S INFORMATION
All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.
EXHIBIT 5
SCHEDULE OF LOST NOTES
Available Upon Request
EXHIBIT 6
SCHEDULE OF PWS AGREEMENTS
[to be provided]*
*Available upon request.
SCHEDULE A
REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
Public Certificates
------------------------------ -------------------- --------------------
Class S&P ▇▇▇▇▇'▇
I-A-1 AAA Aaa
I-A-2 AAA Aaa
I-A-3 AAA Aaa
II-A-1 AAA Aaa
II-A-2 AAA Aaa
II-A-3 AAA Aaa
M-1 AA Aa2
M-2 A A2
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.
SCHEDULE B
MORTGAGE LOAN SCHEDULE
[Provided upon request]