EXHIBIT 4.2(c)
__________ MORTGAGE INVESTMENT TRUST 200_-__, as Issuer
CWHEQ, INC., as Depositor
____________________, as Trust Administrator and Master Servicer
_________________________, as Servicer
____________________________, as Seller
and
____________________________________, as Indenture Trustee
___________________________
SALE AND SERVICING AGREEMENT
Dated as of _______, 200_
___________________________
___________ MORTGAGE INVESTMENT TRUST 200_-__
ASSET-BACKED NOTES
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS 4
Section 1.01. Definitions.................................................4
Section 1.02. Calculations With Respect to the Mortgage Loans............49
Section 1.03. Calculations With Respect to Accrued Interest..............49
ARTICLE II CONVEYANCE OF MORTGAGE LOANS 49
Section 2.01. Creation and Declaration of Trust Estate;
Conveyance of Mortgage Loans...............................49
Section 2.02. Acceptance of Trust Estate; Review of
Documentation..............................................55
Section 2.03. Grant Clause...............................................56
Section 2.04. Option to Contribute Derivative Instrument.................58
ARTICLE III REPRESENTATIONS AND WARRANTIES 58
Section 3.01. Representations and Warranties of the Depositor
and the Seller.............................................58
Section 3.02. Discovery of Breach........................................60
Section 3.03. Repurchase, Purchase or Substitution of Mortgage
Loans......................................................61
ARTICLE IV ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS BY
THE SERVICER 62
Section 4.01. Seller's Engagement of Servicer to Perform
Servicing Responsibilities.................................62
Section 4.02. Servicing of the Mortgage Loans............................63
Section 4.03. Payments To the Master Servicer............................77
Section 4.04. General Servicing Procedures...............................79
Section 4.05. Representations, Warranties and Agreements.................82
Section 4.06. The Servicer...............................................85
Section 4.07. Termination for Cause......................................87
Section 4.08. Successor to Servicer, Miscellaneous Provisions............89
Section 4.09. Sub-Servicers and Sub-Servicing Agreements.................91
Section 4.10. Miscellaneous Servicing Provisions.........................92
Section 4.11. Advance Facility...........................................93
ARTICLE V ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER AND THE TRUST ADMINISTRATOR 95
Section 5.01. Duties of the Master Servicer; Representations
and Warranties.............................................95
Section 5.02. Master Servicer Fidelity Bond and Master
Servicer Errors and Omissions Insurance Policy.............97
Section 5.03. Master Servicer's Financial Statements and
Related Information........................................98
i
Section 5.04. Power to Act; Procedures...................................98
Section 5.05. Enforcement of Servicer's and Master Servicer's
Obligations................................................99
Section 5.06. [Reserved]................................................100
Section 5.07. Collection Account........................................100
Section 5.08. Application of Funds in the Collection Account............101
Section 5.09. Reports to Indenture Trustee and Noteholders..............103
Section 5.10. Termination of Servicer; Successor Servicers..............106
Section 5.11. Master Servicer Liable for Enforcement....................107
Section 5.12. Assumption of Master Servicing by Indenture
Trustee...................................................107
Section 5.13. [Reserved]................................................108
Section 5.14. Release of Mortgage Files.................................108
Section 5.15. Documents, Records and Funds in Possession of
Master Servicer To Be Held for Indenture Trustee..........108
Section 5.16. Opinion...................................................110
Section 5.17. [Reserved]................................................110
Section 5.18. [Reserved]................................................110
Section 5.19. [Reserved]................................................110
Section 5.20. Indenture Trustee To Retain Possession of
Certain Insurance Policies and Documents..................110
Section 5.21. Compensation to the Master Servicer.......................110
Section 5.22. [Reserved]................................................110
Section 5.23. Reports to the Indenture Trustee..........................110
Section 5.24. Annual Officer's Certificate as to Compliance.............111
Section 5.25. [Reserved]................................................112
Section 5.26. Merger or Consolidation...................................112
Section 5.27. Resignation of Master Servicer............................112
Section 5.28. Assignment or Delegation of Duties by the Master
Servicer..................................................112
Section 5.29. Limitation on Liability of the Master Servicer
and Others................................................113
Section 5.30. Indemnification; Third Party Claims.......................114
Section 5.31. Alternative Index.........................................114
Section 5.32. Transfer of Servicing.....................................114
ARTICLE VI DEPOSITS AND PAYMENTS TO HOLDERS 116
Section 6.01. The Collection Account....................................116
Section 6.02. Payments from the Collection Account......................116
Section 6.03. [Reserved]................................................130
Section 6.04. Control of the Trust Account and Deferred
Interest..................................................130
Section 6.05. Advances by Master Servicer and Servicer..................134
Section 6.06. The Interest Rate Cap Agreements..........................135
Section 6.07. [Class AF-5B] Policy; Rights of the [Class
AF-5B] Insurer............................................136
ARTICLE VII ADMINISTRATION OF THE AGREEMENTS 139
Section 7.01. Duties of the Trust Administrator.........................139
Section 7.02. Duties of the Trust Administrator With Respect
to the Indenture, the Trust Agreement and this
Agreement.................................................142
ii
Section 7.03. Records...................................................142
Section 7.04. Compensation..............................................142
Section 7.05. Additional Information to be Furnished to the
Issuer....................................................143
Section 7.06. Independence of the Trust Administrator...................143
Section 7.07. No Joint Venture..........................................143
Section 7.08. Other Activities of Trust Administrator and the
Depositor.................................................143
Section 7.09. Resignation and Removal of Trust Administrator............143
Section 7.10. Action upon Termination, Resignation or Removal
of the Trust Administrator................................145
ARTICLE VIII MASTER SERVICER EVENTS OF DEFAULT 145
Section 8.01. Master Servicer Events of Default; Indenture
Trustee To Act; Appointment of Successor..................145
Section 8.02. Additional Remedies of Indenture Trustee Upon
Master Servicer Event of Default..........................150
Section 8.03. Waiver of Defaults........................................150
Section 8.04. Notification to Holders...................................150
Section 8.05. Directions by Noteholders and Duties of
Indenture Trustee During Master Servicer Event
of Default................................................151
Section 8.06. Action Upon Certain Failures of the Master
Servicer and Upon Master Servicer Event of
Default...................................................151
ARTICLE IX TERMINATION 151
Section 9.01. Termination...............................................151
Section 9.02. Termination Prior to Maturity Date; Optional
Redemption................................................151
Section 9.03. Certain Notices upon Final Payment........................152
ARTICLE X MISCELLANEOUS PROVISIONS 153
Section 10.01. Binding Nature of Agreement; Assignment...................153
Section 10.02. Entire Agreement..........................................153
Section 10.03. Amendment.................................................153
Section 10.04. Acts of Noteholders.......................................154
Section 10.05. Recordation of Agreement..................................154
Section 10.06. Governing Law.............................................154
Section 10.07. Notices...................................................154
Section 10.08. Severability of Provisions................................156
Section 10.09. Indulgences; No Waivers...................................156
Section 10.10. Headings Not To Affect Interpretation.....................156
Section 10.11. Benefits of Agreement.....................................156
Section 10.12. Special Notices to the Rating Agencies....................157
Section 10.13. Counterparts..............................................157
Section 10.14. Execution by the Issuer...................................157
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ARTICLE XI EXCHANGE ACT REPORTING 159
Section 11.01. Filing Obligations........................................159
Section 11.02. Form 10-D Filings.........................................159
Section 11.03. Form 8-K Filings..........................................160
Section 11.04. Form 10-K Filings.........................................160
Section 11.05. ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification..............................161
Section 11.06. Form 15 Filing............................................162
Section 11.07. Report on Assessment of Compliance and
Attestation...............................................162
Section 11.08. Use of Subservicers and Subcontractors....................163
Section 11.09. Amendments................................................164
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ATTACHMENTS
Exhibit A-1 Form of Initial Certification
Exhibit A-2 Form of Interim Certification
Exhibit A-3 Form of Final Certification
Exhibit A-4 Form of Endorsement
Exhibit B [Reserved]
Exhibit C Form of Lost Note Affidavit
Exhibit D Custodial Agreement
Exhibit E Custodial Account Letter Agreement
Exhibit F Escrow Account Letter Agreement
Exhibit G-1 Form of Monthly Remittance Advice
Exhibit G-1A Form of Monthly Remittance Advice
Exhibit G-2 Standard Layout For Monthly Defaulted Loan Report
Exhibit G-3 Form 332 Realized Loss Report
Exhibit H-1 Form of Certification to be Provided to the Master Servicer
by the Servicer/Trustee/Custodian
Exhibit H-2 Form of Master Servicer Certification
Exhibit I Item 1119 Party Schedule
Exhibit J Form of Servicing Criteria to be Addressed in Assessment of
Compliance Statement
Exhibit K Form of [Class AF-5B] Policy
[Exhibit L Form of Subsequent Transfer Agreement]
Exhibit M Form of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (Replacement of Master
Servicer)
Schedule A Mortgage Loan Schedule
v
This SALE AND SERVICING AGREEMENT, dated as of _______, 200_ (the
"Agreement" or the "Sale and Servicing Agreement"), is by and among ______
MORTGAGE INVESTMENT TRUST 200_-__, a Delaware statutory trust, as issuer (the
"Issuer"), CWHEQ, INC., a Delaware corporation, as depositor (the
"Depositor"), ____________________________________, as indenture trustee (the
"Indenture Trustee"), ____________________, as trust administrator (the
"Trust Administrator") and master servicer (the "Master Servicer"),
_________________________, as servicer (the "Servicer"), and
____________________________, as seller (the "Seller").
PRELIMINARY STATEMENT
WHEREAS, the Depositor has acquired all of the rights, title and
interest of the Seller in certain conventional, adjustable rate, residential
mortgage loans identified in Schedule A hereto (the "Mortgage Loans") on a
servicing-retained basis from the Seller pursuant to the Mortgage Loan
Purchase Agreement, and at the Closing Date is the owner of the Mortgage Loans
and the other property being conveyed by it to the Issuer hereunder for
inclusion in the Trust Estate;
WHEREAS, the Depositor has duly authorized the execution and delivery of
this Agreement to provide for the conveyance to the Issuer of the Mortgage
Loans and the other property constituting the Trust Estate;
WHEREAS, on the Closing Date, the Depositor will acquire the Notes and
the Ownership Certificate from the Issuer as consideration for its transfer to
the Issuer of the Mortgage Loans and the other property constituting the Trust
Estate;
WHEREAS, pursuant to the Indenture, the Issuer will pledge the Mortgage
Loans and the other property constituting the Trust Estate to the Indenture
Trustee as security for the Notes;
WHEREAS, the Seller desires that the Servicer service the Mortgage Loans
upon such transfer to the Issuer pursuant to this Agreement, and the Servicer
has agreed to do so;
WHEREAS, the Master Servicer shall be obligated under this Agreement,
among other things, to supervise the servicing of the Mortgage Loans on behalf
of the Issuer, and shall have the right, under certain circumstances, to
terminate the rights and obligations of the Servicer under this Agreement upon
the occurrence and continuance of a Servicer Event of Default as provided
herein;
WHEREAS, the parties hereto acknowledge and agree that, at the direction
of the Depositor, the Seller will assign all of its rights with respect to the
Mortgage Loans (other than the servicing rights) to the Indenture Trustee;
WHEREAS, the Issuer has entered into certain agreements in connection
with the issuance of the Notes, including (i) the Depository Agreement and
(ii) the Indenture (the Depository Agreement, the Indenture, the Trust
Agreement and the Custodial Agreement being hereinafter referred to
collectively as the "Related Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer is required to
perform certain duties in connection with (a) the Notes and the collateral
therefor pledged pursuant to the
Indenture (the "Collateral") and (b) the undivided subordinate beneficial
ownership interest in the Issuer represented by the Ownership Certificate;
WHEREAS, the Issuer desires to have the Trust Administrator perform
certain of the duties of the Issuer referred to in the preceding clause, and
to provide such additional services consistent with the terms of this
Agreement and the Related Agreements as the Issuer or the Owner Trustee may
from time to time reasonably request; and
WHEREAS, the Trust Administrator has the capacity to provide the
services required hereby and is willing to perform such services for the
Issuer or the Owner Trustee on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
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The following table sets forth (or describes) the Class designation,
Note Interest Rate, initial Class Principal Amount and minimum denomination
for each Class of Notes issued pursuant to the Indenture.
Initial
Class Class Principal Minimum
Designation Note Interest Rate Amount Denominations
-------------------------------- -------------------------- ----------------------- ----------------------
[Class AF-1A]..................... Variable (1) $ __________ $ 25,000
[Class AF-1B]..................... Variable (1) $ __________ $ 25,000
[Class AF-2]...................... Variable (1) $ __________ $ 25,000
[Class AF-3]...................... Variable (1) $ __________ $ 25,000
[Class AF-4]...................... Variable (1) $ __________ $ 25,000
[Class AF-5A]..................... Variable (1) $ __________ $ 25,000
[Class AF-5B]..................... Variable (1) $ __________ $ 25,000
[Class AF-6]...................... Variable (1) $ __________ $ 25,000
[Class MF-1]...................... Variable (1) $ __________ $ 100,000
[Class MF-2]...................... Variable (1) $ __________ $ 100,000
[Class MF-3]...................... Variable (1) $ __________ $ 100,000
[Class MF-4]...................... Variable (1) $ __________ $ 100,000
[Class MF-5]...................... Variable (1) $ __________ $ 100,000
[Class MF-6]...................... Variable (1) $ __________ $ 100,000
[Class MF-7]...................... Variable (1) $ __________ $ 100,000
[Class MF-8]...................... Variable (1) $ __________ $ 100,000
[Class BF]........................ Variable (1) $ __________ $ 100,000
[Class 2-AV-1].................... Variable (1) $ __________ $ 25,000
[Class 2-AV-1].................... Variable (1) $ __________ $ 25,000
[Class 2-AV-2].................... Variable (1) $ __________ $ 25,000
[Class 3-AV-1].................... Variable (1) $ __________ $ 25,000
[Class 3-AV-2].................... Variable (1) $ __________ $ 25,000
[Class 3-AV-3].................... Variable (1) $ __________ $ 25,000
[Class 3-AV-4].................... Variable (1) $ __________ $ 25,000
[Class MV-1]...................... Variable (1) $ __________ $ 100,000
[Class MV-2]...................... Variable (1) $ __________ $ 100,000
[Class MV-3]...................... Variable (1) $ __________ $ 100,000
[Class MV-4]...................... Variable (1) $ __________ $ 100,000
[Class MV-5]...................... Variable (1) $ __________ $ 100,000
[Class MV-6]...................... Variable (1) $ __________ $ 100,000
[Class MV-7]...................... Variable (1) $ __________ $ 100,000
[Class MV-8]...................... Variable (1) $ __________ $ 100,000
[Class BV]........................ Variable (1) $ __________ $ 100,000
---------------
(1) See the definition of "Note Interest Rate" herein.
3
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accounts: Any or all of the Custodial Accounts, the Escrow Accounts, the
Collection Account, the Interest Rate Cap Account and any other accounts
created or maintained by the Trust Administrator or the Servicer pursuant to
this Agreement.
Accountant: A Person engaged in the practice of accounting who (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.
Accrual Period: With respect to any Payment Date and the Notes, the
period beginning on the immediately preceding Payment Date (or, in the case of
the first Payment Date, beginning on the Closing Date) and ending on the day
immediately preceding the related Payment Date.
Additional Designated Information: As defined in Section 11.02.
Adjustable Rate Notes: The [Class AF-1A] Notes, the [Group AV] Notes
and the Adjustable Rate Subordinate Notes.
Adjustable Rate Cumulative Loss Trigger Event: With respect to a Payment
Date on or after the Adjustable Rate Stepdown Date, an Adjustable Rate
Cumulative Loss Trigger Event occurs if (x) the aggregate amount of Realized
Losses on the Mortgage Loans in [Pool 2] and [Pool 3] from the Cut-off Date
for each such Mortgage Loan to (and including) the last day of the related Due
Period (reduced by the aggregate amount of any Recoveries related to the
Mortgage Loans in [Pool 2] and [Pool 3] received through the last day of that
Due Period) exceeds (y) the applicable percentage, for such Payment Date, of
the sum of the aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans in [Pool 2] and [Pool 3], as set forth below:
4
Payment Date Percentage
------------ ----------
_____ 200_ -- _____ 200_........................ _____% with respect to ______
200_, plus an additional 1/12th of
____% for each month thereafter
through ______ 200_
_____ 200_ -- _____ 200_........................ _____% with respect to ______
200_, plus an additional 1/12th of
____% for each month thereafter
through ______ 200_
_____ 200_ -- _____ 200_........................ _____% with respect to ______
200_, plus an additional 1/12th of
____% for each month thereafter
through ______ 200_
_____ 200_ and thereafter...................... ____%
Adjustable Rate Delinquency Trigger Event: With respect to any
Payment Date on or after the Adjustable Rate Stepdown Date, an Adjustable Rate
Delinquency Trigger Event exists if the Rolling [Sixty-Day] Delinquency Rate
for outstanding Mortgage Loans in [Pool 2] and [Pool 3] equals or exceeds the
product of (x) the Adjustable Rate Senior Enhancement Percentage for such
Payment Date and (y) the applicable percentage listed below for the most
senior class of outstanding [Group AV] Notes and Adjustable Rate Subordinate
Notes:
Class Percentage
[Group AV]........................ _____%
[Class MV-1]...................... _____%
[Class MV-2]...................... _____%
[Class MV-3]...................... _____%
[Class MV-4]...................... _____%
[Class MV-5]...................... _____%
[Class MV-6]...................... _____%
[Class MV-7]...................... _____%
[Class MV-8]...................... _____%
[Class BV]........................ _____%
Adjustable Rate Excess Overcollateralization Amount: With respect to any
Payment Date, an amount equal to the excess, if any, of the Adjustable Rate
Overcollateralized Amount for such Payment Date over the Adjustable Rate
Overcollateralization Target Amount for such Payment Date.
Adjustable Rate Pool Excess Cashflow: With respect to any Payment Date
the sum of (i) the amount remaining after the distribution of interest to
Noteholders for such Payment Date pursuant to Section 6.02(c), (ii) the amount
remaining after the distribution of principal to
5
Noteholders for such Payment Date, pursuant to Section 6.02(e) and (iii) the
Adjustable Rate Overcollateralization Reduction Amount for such Payment Date,
if any.
Adjustable Rate OC Floor: For any Payment Date, an amount equal to ____%
of the sum of the aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans in [Pool 2] and [Pool 3] the [Pool 2] Pre-Funded Amount and the
[Pool 3] Pre-Funded Amount.
Adjustable Rate Overcollateralization Deficiency Amount: With respect to
any Payment Date, the amount, if any, by which the Adjustable Rate
Overcollateralization Target Amount exceeds the Adjustable Rate
Overcollateralized Amount on such Payment Date (after giving effect to
distribution of the Principal Distribution Amount (other than the portion
thereof consisting of the Extra Principal Distribution Amount) for [Pool 2]
and [Pool 3] on such Payment Date).
Adjustable Rate Overcollateralization Reduction Amount: With respect to
any Payment Date, an amount equal to the lesser of (i) the Adjustable Rate
Excess Overcollateralization Amount for such Payment Date and (ii) the
aggregate Principal Remittance Amount for [Pool 2] and [Pool 3] for such
Payment Date.
Adjustable Rate Overcollateralization Target Amount: With respect to any
Payment Date (a) prior to the Adjustable Rate Stepdown Date, an amount equal
to ___% of the sum of the aggregate Cut-off Date Principal Balance of the
Initial Mortgage Loans in [Pool 2] and [Pool 3], the [Pool 2] Pre-Funded
Amount and the [Pool 3] Pre-Funded Amount, and (b) on or after the Adjustable
Rate Stepdown Date, the greater of (i) an amount equal to ____% of the
aggregate Stated Principal Balance of the Mortgage Loans in [Pool 2] and [Pool
3] for the current Payment Date and (ii) the Adjustable Rate OC Floor;
provided, however, that if an Adjustable Rate Trigger Event is in effect on
any Payment Date, the Adjustable Rate Overcollateralization Target Amount will
be the Adjustable Rate Overcollateralization Target Amount as in effect for
the prior Payment Date.
Adjustable Rate Overcollateralized Amount: With respect to any Payment
Date, the amount, if any, by which (x) the sum of the aggregate Stated
Principal Balance of the Initial Mortgage Loans in [Pool 2] and [Pool 3] and
any amount on deposit in the Pre-Funding Account in respect of [Pool 2] and
[Pool 3] for such Payment Date exceeds (y) the sum of the aggregate Note
Principal Amount of the [Group AV] Notes and the Adjustable Rate Subordinate
Notes as of such Payment Date (after giving effect to distribution of the
Principal Remittance Amounts for [Pool 2] and [Pool 3] to be made on such
Payment Date and, in the case of the Payment Date immediately following the
end of the Funding Period, any amounts to be released from the Pre-Funding
Account in respect of [Pool 2] and [Pool 3]).
Adjustable Rate Senior Enhancement Percentage: With respect to a Payment
Date on or after the Adjustable Rate Stepdown Date, the fraction (expressed as
a percentage) (1) the numerator of which is the excess of (a) the aggregate
Stated Principal Balance of the Mortgage Loans in [Pool 2] and [Pool 3] for
the preceding Payment Date over (b) (i) before the Note Principal Amounts of
the [Group AV] Notes have been reduced to zero, the sum of the Note Principal
Amounts of the [Group AV] Notes, or (ii) after such time, the Note Principal
Amount of the most senior Class of Adjustable Rate Subordinate Notes
outstanding, as of the Business
6
Day immediately preceding the Payment Date, and (2) the denominator of which
is the aggregate Stated Principal Balance of the Mortgage Loans in [Pool 2]
and [Pool 3] for the preceding Payment Date.
Adjustable Rate Stepdown Date: The later to occur of (x) the Payment
Date in ______ 200_ and (y) the first Payment Date on which the aggregate Note
Principal Amount of the [Group AV] Notes (after calculating anticipated
distributions on such Payment Date) is less than or equal to ____% of the
aggregate Stated Principal Balance of the Mortgage Loans in [Pool 2] and [Pool
3] for such Payment Date.
Adjustable Rate Subordinate Class Principal Distribution Amount: With
respect to any Payment Date and any Class of Adjustable Rate Subordinate
Notes, the excess of (1) the sum of (a) the aggregate Note Principal Amount of
the [Group AV] Notes (after taking into account distribution of the [Group AV]
Principal Distribution Amount for such Payment Date), (b) the aggregate Note
Principal Amount of any Class(es) of Adjustable Rate Subordinate Notes that
are senior to the subject Class (in each case, after taking into account
distribution of the Adjustable Rate Subordinate Class Principal Distribution
Amount(s) for such senior Class(es) of Notes for such Payment Date), and (c)
the Note Principal Amount of the subject Class of Adjustable Rate Subordinate
Notes immediately prior to such Payment Date over (2) the lesser of (a) the
product of (x) [100]% minus the Stepdown Target Subordination Percentage for
the subject Class of Notes and (y) the aggregate Stated Principal Balance of
the Mortgage Loans in [Pool 2] and [Pool 3] for such Payment Date and (b) the
aggregate Stated Principal Balance of the Mortgage Loans in [Pool 2] and [Pool
3] for such Payment Date minus the Adjustable Rate OC Floor; provided,
however, that if such Class of Adjustable Rate Subordinate Notes is the only
Class of Adjustable Rate Subordinate Notes outstanding on such Payment Date,
that Class will be entitled to receive the entire remaining Principal
Distribution Amount for [Pool 2] and [Pool 3] until the Note Principal Amount
thereof is reduced to zero.
Adjustable Rate Subordinate Notes: The [Class MF-1], [Class MF-2],
[Class MF-3], [Class MF-4], [Class MF-5], [Class MF-6], [Class MF-7], [Class
MF-8] and [Class BV] Notes.
Adjustable Rate Trigger Event: With respect to any Payment Date on or
after the Adjustable Rate Stepdown Date, either an Adjustable Rate Delinquency
Trigger Event with respect to that Payment Date or an Adjustable Rate
Cumulative Loss Trigger Event with respect to that Payment Date.
Advance: With respect to each Servicer Remittance Date and each Mortgage
Loan, an amount equal to the Scheduled Payment (with the interest portion of
such Scheduled Payment adjusted to the Mortgage Loan Remittance Rate, in the
case of the Servicer, or to the Net Mortgage Rate, in the case of the Master
Servicer) that was due on the Mortgage Loan on the Due Date in the related
Collection Period, and that (i) was delinquent at the close of business on the
related Determination Date and (ii) was not the subject of a previous Advance,
but only to the extent that such amount is expected, in the reasonable
judgment of the Servicer or Master Servicer, as applicable, to be recoverable
from collections or other recoveries in respect of such Mortgage Loan.
Advance Facility: As defined in Section 4.11(a) hereof.
7
Advance Facility Notice: As defined in Section 4.11(a) hereof.
Advancing Person: As defined in Section 4.11(a) hereof.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Collateral Balance: As of any date of determination, an amount
equal to the Aggregate Loan Balance plus the amount on deposit in the
Pre-Funded Account.
Aggregate Loan Balance: As of any date of determination, an amount equal
to the aggregate of the Stated Principal Balances of the Mortgage Loans as of
such date.
Agreement: This Sale and Servicing Agreement and all amendments and
supplements hereto.
Ancillary Income: All income derived from the Mortgage Loans, excluding
Servicing Fees, Master Servicing Fees and Prepayment Premiums attributable to
the Mortgage Loans and other amounts treated as payment proceeds of the
Mortgage Loans, including but not limited to, late charges, fees received with
respect to checks or bank drafts returned by the related bank for
non-sufficient funds, assumption fees, optional insurance administrative fees
and all other incidental fees and charges.
Applied Realized Loss Amount: With respect to any Payment Date and (i)
[Pool 1] and the Fixed Rate Subordinate Notes, the amount, if any, by which,
the aggregate Note Principal Amount of the Fixed Rate Notes (after all
distributions of principal on such Payment Date) exceeds the sum of (x) the
Stated Principal Balance of the Mortgage Loans in [Pool 1] for such Payment
Date and (y) the amount on deposit in the Pre-Funding Account in respect of
[Pool 1],, (ii) [Pool 2] and [Pool 3] and the Adjustable Rate Subordinate
Notes, the amount, if any, by which, the aggregate Note Principal Amount of
the Adjustable Rate Notes (after all distributions of principal on such
Payment Date) exceeds the sum of (x) the aggregate Stated Principal Balance of
the Mortgage Loans in [Pool 2] and [Pool 3] and (y) the amount on deposit in
the Pre-Funding Account in respect of [Pool 2] and [Pool 3] and (iii) [Pool 2]
and the [Class 2-A-2] Notes, after the Note Principal Amounts of the
Adjustable Rate Subordinate Notes have been reduced to zero, the amount, if
any, by which, the aggregate Note Principal Amount of the [Group 2-AV] Notes
(after all distributions of principal on such Payment Date) exceeds the sum of
(x) the aggregate Stated Principal Balance of the Mortgage Loans in [Pool 2]
and (y) the amount on deposit in the Pre-Funding Account in respect of [Pool
2].
Appraised Value: With respect to any Mortgage Loan, the amount set forth
in an appraisal made in connection with the origination of such Mortgage Loan
as the value of the related Mortgaged Property.
8
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the assignment of the Mortgage to the Indenture Trustee for the
benefit of Noteholders, which assignment, notice of transfer or equivalent
instrument may be in the form of one or more blanket assignments covering the
Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction, if permitted by law; provided, however, that neither the Issuer
nor the Indenture Trustee shall be responsible for determining whether any
such assignment is in recordable form.
Authorized Officer: Any Person who may execute an Officer's
Certificate on behalf of the Issuer.
Bankruptcy: As to any Person, the making of an assignment for the
benefit of creditors, the filing of a voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent, the entry of an order for relief in a
bankruptcy or insolvency proceeding, the seeking of reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief, or seeking, consenting to or acquiescing in the appointment of a
trustee, receiver or liquidator, dissolution, or termination, as the case may
be, of such Person pursuant to the provisions of either the United States
Bankruptcy Code of 1986, as amended, or any other similar state laws.
Bankruptcy Code: The United States Bankruptcy Code of 1986, as amended.
Basis Risk Shortfall: With respect to any Class of Notes and any Payment
Date, the amount by which (a) the amount of interest calculated at the Note
Interest Rate applicable to such Class for such date, determined without
regard to the applicable Net Funds Cap for such date (but with regard to the
Fixed Rate Cap) exceeds (b) the amount of interest calculated at the
applicable Net Funds Cap.
Bloomberg Screen LIBO Page: The display designated as page "BBAM" on the
Bloomberg L.P. (or such other page as may replace the BBAM page on that
service for the purpose of displaying London interbank offered rates of major
banks).
Book-Entry Notes: As defined in the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in New York, New York or, if other than New
York, the city in which the Corporate Trust Office of the Indenture Trustee is
located, or the States of California, Delaware, Maryland or Minnesota are
authorized or obligated by law or executive order to be closed.
Cap Agreement Assignment Agreement: The assignment agreement dated as of
the Closing Date among ________________________, the Issuer and the Cap
Counterparty.
Cap Counterparty: _____________________________, as counterparty under
the Interest Rate Cap Agreements.
Certificate: The Ownership Certificate.
9
Certificate Registrar: As defined in the Trust Agreement, the initial
Certificate Registrar shall be the Trust Administrator.
Certificateholder: Any registered holder of the Ownership Certificate.
Certification Party: As defined in Section 11.05.
Certifying Person: As defined in Section 11.05.
Civil Relief Act: The Servicemembers Civil Relief Act, as such may be
amended from time to time, and any similar state laws.
Class: All Notes bearing the same class designation.
Class A Notes: Collectively, the [Class AF-1A], [Class AF-1B], [Class
AF-2], [Class AF-3], [Class AF-4], [Class AF-5A], [Class AF-5B], [Class AF-6],
[Class 2-AV-1], [Class 2-AV-2]; [Class 3-AV-1], [Class 3-AV-2], [Class 3-AV-3]
and [Class 3-AV-4] Notes.
[Class AF-1A] Cap Agreement: The interest rate cap agreement transaction
evidenced by the related Confirmation (as assigned to the Trust pursuant to
the Cap Agreement Assignment Agreement), with respect to the Class [AF-1A]
Notes.
[Class AF-1A] Cap Agreement Payment Date: With respect to the [Class
AF-1A] Cap Agreement, the Business Day immediately preceding the related
Payment Date, beginning with the Payment Date in ________ 200_ and ending with
the Payment Date in ________ 200_.
[Class AF-5B] Available Funds: With respect to any Payment Date, funds
allocated from amounts available pursuant to this Agreement to make
distributions on the [Class AF-5B] Notes on such Payment Date, other than any
Insured Amounts.
[Class AF-5B] Insurer: ________________ in its capacity as insurer
under the [Class AF-5B] Policy, and any permitted successor or assign.
[Class AF-5B] Insurer Contact Person: The officer designated by the
Master Servicer to provide information to the [Class AF-5B] Insurer pursuant
to Section 6.07(i)].
[Class AF-5B] Insurer Default: As defined in Section 6.07(l).
[Class AF-5B] Policy: The irrevocable Note Guaranty Insurance Policy,
No. ______________, including any endorsements thereto, issued by ________
with respect to the [Class AF-5B] Notes, in the form attached hereto as
Exhibit [O].
[Class AF-5B] Premium: For any Payment Date is the fee payable to the
[Class AF-5B] Insurer in respect of its services as [Class AF-5B] Insurer that
accrues at the [Class AF-5B] Policy Premium Rate for the [Class AF-5B] Notes
on a balance equal to the Note Principal Amount of the [Class AF-5B] Notes
immediately prior to such Payment Date. The [Class AF-5B] Premium shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
10
[Class AF-5B] Policy Premium Rate: The "Premium Percentage" as defined
in the [Class AF-5B] Policy.
[Class AF-5B] Reimbursement Amount: As to any Payment Date, (i) all
Insured Payments paid by the [Class AF-5B] Insurer, but for which the [Class
AF-5B] Insurer has not been reimbursed prior to such Payment Date pursuant to
Section 6.02 hereof, plus (ii) interest accrued on such Insured Payments not
previously repaid, calculated at the Late Payment Rate from the date such
Insured Payments were made.
Class B Notes: Collectively, the Class [BF] and Class [BV] Notes.
Class C Notes: Collectively, the Class [CF] and Class [CV] Notes.
Class M Notes: Collectively, the [Class MF-1], [Class MF-2], [Class
MF-3], [Class MF-4], [Class MF-5], [Class MF-6], [Class MF-7], [Class MF-8],
[Class MV-1], [Class MV-2], [Class MV-3], [Class MV-4], [Class MV-5], [Class
MV-6], [Class MV-7] and [Class MV-8] Notes.
Class P Notes: Collectively, the Class [PF] and Class [PV] Notes.
Class Principal Amount: With respect to each Class of Notes, the
aggregate of the Note Principal Amounts of all Notes of such Class at the date
of determination.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act, as amended. As of the Closing
Date, the Clearing Agency shall be The Depository Trust Company.
Closing Date: _______, 200_.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Collateral: As defined in the Indenture.
Collection Account: A separate account established and maintained by
the Trust Administrator for the benefit of the Indenture Trustee pursuant to
Section 5.07.
Collection Period: With respect to any Payment Date and Mortgage Loan,
the period commencing on the second day of the month immediately preceding the
month in which such Payment Date occurs and ending on the first day of the
month in which such Payment Date occurs.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest Payment: With respect to any Payment Date, an
amount equal to the lesser of (x) the aggregate Prepayment Interest Shortfall
Amount with respect to such Payment Date and (y) the Servicing Fee payable to
the Servicer in respect of such Payment Date.
11
Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan documents.
Confirmation: Any of the Confirmations dated __________, 200_ evidencing
a transaction between the Cap Counterparty and __________________, an
affiliate of the Depositor, relating to the Interest Rate Cap Agreements.
Control: The meaning specified in Section 8-106 of the New York UCC.
Corporate Trust Office: With respect to (i) the Trust Administrator, the
principal corporate trust office of the Trust Administrator at which, at any
particular time, its corporate trust business shall be administered, which
office at the date of execution of this Agreement for purposes of transfers
and exchanges and for presentment and surrender of the Notes and for payment
thereof is located at ____________________, __________________, Attention:
__________________, and for all other purposes is located at
____________________,___________________________, Attention: ________________;
(ii) the Certificate Registrar, the principal office of the Certificate
Registrar at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Agreement is
located at the Corporate Trust Office of the Trust Administrator, or at such
other address as the Certificate Registrar may designate from time to time by
notice to the Noteholders and the Trust, or the principal corporate trust
office of any successor Certificate Registrar at the address designated by
such successor Certificate Registrar by notice to the Noteholders and the
Trust; and (iii) the Indenture Trustee, the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Agreement is
located at _____________________, Attention: ___________________, or at such
other address as the Indenture Trustee may designate from time to time by
notice to the Noteholders and the Trust, or the principal corporate trust
office of any successor Indenture Trustee at the address designated by such
successor Indenture Trustee by notice to the Noteholders and the Trust.
Credit Comeback Excess Cashflow: With respect to any Payment Date, any
amounts in the Credit Comeback Excess Account available for such Payment Date.
Credit Comeback Excess Amount: With respect to the Credit Comeback Loans
in [Pool 1] and any Payment Date, the portion of the sum of the following
(without duplication) attributable to the excess, if any, of the actual
mortgage rate on each Credit Comeback Loan and the Mortgage Rate on such
Credit Comeback Loan: (i) all scheduled interest collected during the related
Due Period with respect to the Credit Comeback Loans, (ii) all Advances
relating to interest with respect to the Credit Comeback Loans, (iii) all
Compensating Interest with respect to the Credit Comeback Loans and (iv)
Liquidation Proceeds with respect to the Credit Comeback Loans collected
during the related Due Period (to the extent such Liquidation Proceeds relate
to interest), less all Nonrecoverable Advances relating to interest reimbursed
during the related Due Period.
12
Credit Comeback Loan: Any Mortgage Loan in [Pool 1] for which the
related Mortgage Rate is subject to reduction (not exceeding [0.375]% per
annum) for good payment history of Scheduled Payments by the related
Mortgagor.
Current Interest: With respect to any Class of Notes and any Payment
Date, will equal the aggregate amount of interest accrued at the applicable
Note Interest Rate during the related Accrual Period on the Class Principal
Amount of such Class immediately prior to such Payment Date, provided,
however, that for any Class of Subordinate Notes and for any Payment Date,
Current Interest shall be reduced by the amount specified in clause (a) of the
definition of Deferred Interest, if any, for such Class and Payment Date.
Custodial Account: The separate custodial account (other than an Escrow
Account) established and maintained by the Servicer pursuant to Section
4.02(d) of this Agreement.
Custodial Agreement: The custodial agreement relating to the custody
of certain of the Mortgage Loans, substantially in the form attached as
Exhibit D hereto, among the Custodian, the Issuer and the Indenture Trustee,
as acknowledged by the Seller, the Depositor, the Master Servicer, the Trust
Administrator and the Servicer, dated as of _______, 200_.
Custodian: The custodian appointed pursuant to the Custodial
Agreement, and any successor thereto. The initial Custodian is
------------------------------------.
Cut-off Date: In the case of any Initial Mortgage Loan, the later of (x)
_________, 200_ and (y) the date of origination of such Mortgage Loan (the
"Initial Cut-off Date"), and in the case of any Subsequent Mortgage Loan, the
later of (x) the first day of the month of the related Subsequent Transfer
Date and (y) the date of origination of such Subsequent Mortgage Loan (the
related "Subsequent Cut-off Date"). When used with respect to any Mortgage
Loan the "Cut-off Date" shall mean the related Cut-off Date.
Cut-off Date Balance: The Aggregate Loan Balance as of the Cut-off
Date.
Cut-off Date Collateral Balance: The Cut-off Date Balance.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
of the Scheduled Payment that the related Mortgagor is obligated to pay on any
Due Date as a result of any proceeding under Bankruptcy law or any similar
proceeding.
Deferred Interest: For any Class of Subordinate Notes and any Payment
Date, the sum of (a) the aggregate amount of interest accrued at the
applicable Note Interest Rate during the related Accrual Period on the
Principal Deficiency Amount for the Class, (b) any amounts due pursuant to
clause (a) for such Class for prior Payment Dates that remain unpaid and (c)
interest accrued during the Accrual Period related to such Payment Date on the
amount in clause (b) at the Note Interest Rate applicable to such Class.
Deficiency Amount: With respect to:
13
(a) any Payment Date prior to the Last Scheduled Payment Date, the
sum of (i) the excess, if any, of the Current Interest on the [Class
AF-5B] Notes net of any interest shortfalls resulting from Prepayment
Interest Shortfalls and any interest shortfalls resulting from the
application of the Civil Relief Act, or similar state or local laws,
over [Class AF-5B] Available Funds for such Payment Date, and (ii) for
any Payment Date after the Note Principal Amount of the Fixed Rate
Subordinate Notes has been reduced to zero, the excess, if any, of (A)
the Note Principal Amount of the [Class AF-5B] Notes over (B) the sum of
the aggregate Stated Principal Balance of the [Pool 1] Mortgage Loans,
in each case taking into account all distributions to be made on such
Payment Date;
(b) the Last Scheduled Payment Date, an amount equal to the sum of
(i) the excess, if any, of the Current Interest on the [Class AF-5B]
Notes net of any interest shortfalls resulting from Prepayment Interest
Shortfalls and any interest shortfalls resulting from the application of
the Relief Act, or similar state or local laws over the [Class AF-5B]
Available Funds for such Payment Date and (ii) the Note Principal Amount
of the [Class AF-5B] Notes on such Last Scheduled Payment Date (after
taking into account all distributions to be made to the [Class AF-5B]
Notes on such Payment Date); and
(c) any date on which the redemption of the Notes has been
directed or consented to by the [Class AF-5B] Insurer, the excess of (i)
the amount required to pay the outstanding Note Principal Amount of the
[Class AF-5B] Notes in full, together with accrued and unpaid interest
thereon through the date of payment of the [Class AF-5B] Notes and (ii)
the [Class AF-5B] Available Funds for that Payment Date.
Definitive Notes: As defined in the Indenture.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased from the
Trust Estate pursuant to the terms hereof or as to which one or more
Qualifying Substitute Mortgage Loans are substituted therefor.
Delinquency Rate: With respect to any calendar month, the fraction,
expressed as a percentage, the numerator of which is the aggregate outstanding
principal balance of all Mortgage Loans 60 or more days Delinquent (including
all foreclosures, bankruptcies and REO Properties) as of the close of business
on the last day of such month, and the denominator of which is the Aggregate
Collateral Balance as of the close of business on the last day of such month.
Delinquent: For reporting purposes, a Mortgage Loan is "delinquent" when
any payment contractually due thereon has not been made by the close of
business on the Due Date therefor. Such Mortgage Loan is "30 days Delinquent"
if such payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which such
payment was first due, or, if there is no such corresponding day (e.g., as
when a 30-day month follows a 31-day month in which a payment was due on the
31st day of such month), then on the last day of such immediately succeeding
month. Similarly for "60 days Delinquent" and
14
the second immediately succeeding month and "90 days Delinquent" and the third
immediately succeeding month.
Depositor: CWHEQ, Inc., a Delaware corporation having its principal
place of business in California, or its successors in interest.
Depository Agreement: The agreement dated _______, 200_, among the
Issuer and The Depository Trust Company, as the initial Clearing Agency,
relating to the Book-Entry Notes.
Determination Date: With respect to each Payment Date, the 15th day of
the month in which such Payment Date occurs, or, if such 15th day is not a
Business Day, the next succeeding Business Day.
Due Date: The day of the calendar month on which the Scheduled Payment
is due on a Mortgage Loan, exclusive of any days of grace. Pursuant to Section
4.03(d), with respect to any Mortgage Loans for which payment from the
Mortgagor is due on a day other than the first day of the month, such Mortgage
Loans will be treated as if the Scheduled Payment is due on the first day of
the immediately succeeding month (other than with respect to the calculation
of the repurchase price).
Due Period: [With respect to any Payment Date, the period beginning on
the second day of the calendar month preceding the calendar month in which
such Payment Date occurs and ending on the first day of the month in which
such Payment Date occurs].
▇▇▇▇▇: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company that
complies with the definition of Eligible Institution or (ii) an account or
accounts the deposits in which are insured by the FDIC to the limits
established by such corporation, provided that any such deposits not so
insured shall be maintained in an account at a depository institution or trust
company whose commercial paper or other short term debt obligations (or, in
the case of a depository institution or trust company which is the principal
subsidiary of a holding company, the commercial paper or other short term debt
or deposit obligations of such holding company or depository institution, as
the case may be) have been rated by each Rating Agency in its highest
short-term rating category, or (iii) a segregated trust account or accounts
(which shall be a "special deposit account") maintained with the Trust
Administrator or any other federal or state chartered depository institution
or trust company, acting in its fiduciary capacity, in a manner acceptable to
the Rating Agencies. Eligible Accounts may bear interest.
Eligible Institution: Any of the following:
(i) An institution whose:
(A) commercial paper, short-term debt obligations, or other
short-term deposits are rated at least "A-1+" or long-term
unsecured debt obligations are rated at least "AA-" by S&P
(or assigned comparable ratings by the
15
other Rating Agencies), if the amounts on deposit are to be
held in the account for no more than 365 days; or
(B) commercial paper, short-term debt obligations, demand
deposits, or other short-term deposits are rated at least
"A-2" by S&P (or assigned comparable ratings by the other
Rating Agencies), if the amounts on deposit are to be held
in the account for no more than 30 days and are not
intended to be used as credit enhancement. Upon the loss
of the required rating set forth in this clause (ii), the
accounts shall be transferred immediately to accounts which
have the required rating. Furthermore, commingling by the
Servicer is acceptable at the A-2 rating level if the
Servicer is a bank, thrift or depository and provided the
Servicer has the capability to immediately segregate funds
and commence remittance to an Eligible Account upon a
downgrade; or
(ii) the corporate trust department of a federal depositor institution
or state-chartered depositor institution subject to regulations
regarding fiduciary funds on deposit similar to Title 12 of the
U.S. Code of Federal Regulation Section 9.10(b), which, in either
case, has corporate trust powers and is acting in its fiduciary
capacity.
Eligible Investments: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest 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 ("Direct Obligations");
(ii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository
institution or trust company (including U.S. subsidiaries of
foreign depositories and the Indenture Trustee or the Trust
Administrator or any agent of the Indenture Trustee or the Trust
Administrator, acting in its respective commercial capacity)
incorporated or organized under the laws of the United States of
America or any state thereof and subject to supervision and
examination by federal or state banking authorities, so long as at
the time of investment or the contractual commitment providing for
such investment the commercial paper or other short term debt
obligations of such depository institution or trust company (or,
in the case of a depository institution or trust company which is
the principal subsidiary of a holding company, the commercial
paper or other short term debt or deposit obligations of such
holding company or deposit institution, as the case may be) have
been rated by each Rating Agency in its highest short-term rating
category or one of its two highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by GNMA, ▇▇▇▇▇▇ ▇▇▇ or FHLMC with any
registered broker/dealer subject to Securities Investors'
Protection Corporation jurisdiction or any
16
commercial bank insured by the FDIC, if such broker/dealer or bank
has an uninsured, unsecured and unguaranteed obligation rated by
each Rating Agency in its highest short-term rating category;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of
America or any state thereof which have a credit rating from each
Rating Agency, at the time of investment or the contractual
commitment providing for such investment, at least equal to one of
the two highest long term credit rating categories of each Rating
Agency; provided, however, that securities issued by any
particular corporation will not be Eligible Investments to the
extent that investment therein will cause the then outstanding
principal amount of securities issued by such corporation and held
as part of the Trust Estate to exceed [20]% of the sum of the
Aggregate Loan Balance and the aggregate principal amount of all
Eligible Investments in the Collection Account; provided, further,
that such securities will not be Eligible Investments if they are
published as being under review with negative implications from
any Rating Agency;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest bearing obligations payable on demand or
on a specified date not more than 180 days after the date of
issuance thereof) rated by each Rating Agency in its highest
short-term rating category;
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct ownership interests
in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities
(which obligations are backed by the full faith and credit of the
United States of America) held by a custodian in safekeeping on
behalf of the holders of such receipts; and
(viii) any other demand, money market, common trust fund or time deposit
or obligation, or interest bearing or other security or investment
(including those managed or advised by the Indenture Trustee, the
Master Servicer, the Trust Administrator, or any Affiliate
thereof), (A) rated in the highest rating category by each Rating
Agency or (B) that would not adversely affect the then current
rating assigned by each Rating Agency to any of the Notes. Such
investments in this subsection (viii) may include money market
mutual funds or common trust estates, including any fund for which
____________________ (the "Bank") in its capacity other than as
the Master Servicer, the Trust Administrator or an affiliate
thereof serves as an investment advisor, administrator,
shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (x) the Bank, the Indenture Trustee, the
Master Servicer or any affiliate thereof charges and collects fees
and expenses from such funds for services rendered, (y) the Bank,
the Indenture Trustee, the Trust Administrator, the Master
Servicer or any affiliate thereof charges and collects fees and
expenses for services rendered pursuant to this Agreement, and (z)
services performed for such funds and pursuant to this
17
Agreement may converge at any time. The Bank or an affiliate
thereof is specifically authorized to charge and collect from the
Issuer such fees as are collected from all investors in such funds
for services rendered to such funds (but not to exceed investment
earnings thereon);
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than [120]% of the yield to
maturity at par of such underlying obligations, provided that any such
investment will be a "permitted investment" within the meaning of Section
860G(a)(5) of the Code.
Entitlement Order: The meaning specified in Section 8-102(a)(8) of the
New York UCC (i.e., generally, orders directing the transfer or redemption of
any Financial Asset).
Environmental Problem Property: A Mortgaged Property or REO Property
that is in violation of any environmental law, rule or regulation.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Errors and Omissions Insurance: Errors and Omissions Insurance to be
maintained by the Servicer in accordance with Section 4.02.
Errors and Omission Insurance Policy: Any Errors and Omission Insurance
policy required to be obtained by the Servicer satisfying the requirements of
this Agreement.
Escrow Account: The separate escrow account (other than a Custodial
Account) established and maintained by the Servicer pursuant to Section
4.02(f) of this Agreement.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
document.
Excess [Class AF-1A] Cap Amount: As defined in Section 6.06(c).
Excess [Class 2AV] Cap Amount: As defined in Section 6.06(d).
Excess [Class 3AV] Cap Amount: As defined in Section 6.06(e)
Excess Subordinate Cap Amount: As defined in Section 6.06(f).
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
18
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form 10-K
required to be filed by the Depositor with respect to the Trust Fund under the
Exchange Act.
Extra Principal Distribution Amount: With respect to any Payment Date
and (A) [Pool 1], the lesser of (1) the Fixed Rate Overcollateralization
Deficiency Amount and (2) the sum of the Fixed Rate Pool Excess Cashflow and
the Credit Comeback Excess Amount available for payment thereof and (B) each
of [Pool 2] and [Pool 3], the lesser of (1) the Adjustable Rate
Overcollateralization Deficiency Amount and (2) the Adjustable Rate Pool
Excess Cashflow available for payment thereof, to be allocated between [Pool
2] and [Pool 3], pro rata, based on the Principal Remittance Amount for each
such Pool for such Payment Date.
▇▇▇▇▇▇ ▇▇▇ or FNMA: ▇▇▇▇▇▇ Mae, a federally chartered and privately
owned corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
FHA: The Federal Housing Administration, an agency within HUD.
FHA Approved Mortgagee: Those institutions which are approved by FHA
to act as servicer and mortgagee of record pursuant to FHA Regulations.
FHA Regulations: Regulations promulgated by HUD under the National
Housing Act, codified in Title 24 of the Code of Federal Regulations, and
other HUD issuances relating to FHA Loans, including the related handbooks,
circulars, notices and mortgagee letters.
Fidelity Bond: Any fidelity bond to be maintained by the Servicer in
accordance with Section 4.02(m).
Financial Asset: The meaning specified in Section 8-102(a) of the New
York UCC.
Fixed Rate Cap: With respect to any Payment Date, a per annum rate
equal to ___%.
Fixed Rate Notes: The [Class AF-1B], [Class AF-2], [Class AF-3],
[Class AF-4], [Class AF-5A], [Class AF-5B], [Class AF-6] and [Class BF] Notes.
Fixed Rate Cumulative Loss Trigger Event: With respect to a Payment Date
on or after the Fixed Rate Stepdown Date, a Fixed Rate Cumulative Loss Trigger
Event occurs if (x) the aggregate amount of Realized Losses on the Mortgage
Loans in [Pool 1] from the Cut-off Date for each such Mortgage Loan to (and
including) the last day of the related Due Period (reduced by the aggregate
amount of any Recoveries related to [Pool 1] received through the last day of
that Due Period) exceeds (y) the applicable percentage, for such Payment Date,
of the sum of the aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans in [Pool 1] and the [Pool 1] Pre-Funded Amount, as set forth
below:
Payment Date Percentage
------------ ----------
19
Payment Date Percentage
------------ ----------
_____ 200_ -- _____ 200_........................ _____% with respect to ______
200_, plus an additional 1/12th of
____% for each month thereafter
through ______ 200_
_____ 200_ -- _____ 200_........................ _____% with respect to ______
200_, plus an additional 1/12th of
____% for each month thereafter
through ______ 200_
_____ 200_ -- _____ 200_........................ _____% with respect to ______
200_, plus an additional 1/12th of
____% for each month thereafter
through ______ 200_
_____ 200_ and thereafter...................... ____%
Fixed Rate Delinquency Trigger Event: With respect to any Payment Date
on or after the Fixed Rate Stepdown Date, a Fixed Rate Delinquency Trigger
Event exists if the Rolling [Sixty-Day] Delinquency Rate for outstanding
Mortgage Loans in [Pool 1] equals or exceeds the product of (x) the Fixed Rate
Senior Enhancement Percentage for such Payment Date and (y) the applicable
percentage listed below for the most senior class of outstanding [Group AF]
Notes and Fixed Rate Subordinate Notes:
Class Percentage
[Group AF]............ _______%
[Class MF-1].......... _______%
[Class MF-2].......... _______%
[Class MF-3].......... _______%
[Class MF-4].......... _______%
[Class MF-5].......... _______%
[Class MF-6].......... _______%
[Class MF-7].......... _______%
[Class MF-8].......... _______%
[Class BF]............ _______%
Fixed Rate Excess Overcollateralization Amount: With respect to any
Payment Date, an amount equal to the excess, if any, of the Fixed Rate
Overcollateralized Amount for such Payment Date over the Fixed Rate
Overcollateralization Target Amount for such Payment Date.
Fixed Rate Pool Excess Cashflow: With respect to any Payment Date the
sum of (i) the amount remaining after the distribution of interest to
Noteholders and the payment of the Class [AF 5B] Premium and any Class [AF 5B]
Reimbursement Amount to the [Class AF-5B] Insurer, in each case for such
Payment Date pursuant to Section 6.02(b), and (ii) the amount remaining after
the distribution of principal to Noteholders and the payment of any unpaid
Class [AF 5B]
20
Premium and any unpaid Class [AF 5B\ Reimbursement Amount to the [Class AF-5B]
Insurer, in each case for such Payment Date pursuant to Section 6.02(d) and
(iii) the Fixed Rate Overcollateralization Reduction Amount for such Payment
Date, if any.
Fixed Rate OC Floor: An amount equal to ____% of the aggregate Cut-off
Date Principal Balance of the Initial Mortgage Loans in [Pool 1] and the [Pool
1] Pre-Funded Amount.
Fixed Rate Overcollateralization Deficiency Amount: With respect to any
Payment Date, the amount, if any, by which the Fixed Rate
Overcollateralization Target Amount exceeds the Fixed Rate Overcollateralized
Amount on such Payment Date (after giving effect to distributions in respect
of the Principal Remittance Amount for [Pool 1] on such Payment Date).
Fixed Rate Overcollateralization Reduction Amount: With respect to any
Payment Date, an amount equal to the lesser of (i) the Fixed Rate Excess
Overcollateralization Amount for such Payment Date and (ii) the Principal
Remittance Amount for [Pool 1] for such Payment Date.
Fixed Rate Overcollateralization Target Amount: With respect to any
Payment Date (a) prior to the Fixed Rate Stepdown Date, an amount equal to
___% of the sum of the aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans in [Pool 1] and the [Pool 1] Pre-Funded Amount (b) on or after
the Fixed Rate Stepdown Date, the greater of (i) an amount equal to ____% of
the aggregate Stated Principal Balance of the Mortgage Loans in [Pool 1] for
the current Payment Date and (ii) the Fixed Rate OC Floor; provided, however,
that if a Fixed Rate Trigger Event is in effect on any Payment Date, the Fixed
Rate Overcollateralization Target Amount will be the Fixed Rate
Overcollateralization Target Amount as in effect for the prior Payment Date.
Fixed Rate Overcollateralized Amount: With respect to any Payment Date,
the amount, if any, by which (x) the aggregate Stated Principal Balance of the
Initial Mortgage Loans in [Pool 1] for such Payment Date and any amount on
deposit in the Pre-Funding Account in respect of [Pool 1] exceeds (y) the
aggregate Note Principal Amount of the [Group AF] Notes and the Fixed Rate
Subordinate Notes as of such Payment Date (after giving effect to
distributions of the Principal Remittance Amount for [Pool 1] to be made on
such Payment Date and, in the case of the Payment Date immediately following
the end of the Funding Period, any amounts to be released from the Pre-Funding
Account in respect of [Pool 1]).
Fixed Rate Senior Enhancement Percentage: With respect to a Payment Date
on or after the Fixed Rate Stepdown Date, the fraction (expressed as a
percentage) (1) the numerator of which is the excess of (a) the aggregate
Stated Principal Balance of the Mortgage Loans in [Pool 1] for the preceding
Payment Date over (b) (i) before the Note Principal Amounts of the [Group AF]
Notes have been reduced to zero, the sum of the Note Principal Amounts of the
[Group AF] Notes, or (ii) after such time, the Note Principal Amount of the
most senior Class of Fixed Rate Subordinate Notes outstanding, as of the
related Master Servicer Advance Date, and (2) the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans in [Pool 1] for the
preceding Payment Date.
Fixed Rate Subordinate Class Principal Distribution Amount: With respect
to any Payment Date and any Class of Fixed Rate Subordinate Notes the excess
of (1) the sum of (a) the
21
aggregate Note Principal Amount of the [Group AF] Notes (after taking into
account distribution of the [Group AF] Principal Distribution Amount for such
Payment Date), (b) the aggregate Note Principal Amount of any Class(es) of
Fixed Rate Subordinate Notes that are senior to the subject Class (in each
case, after taking into account distribution of the Fixed Rate Subordinate
Class Principal Distribution Amount(s) for such senior Class(es) of Notes for
such Payment Date), and (c) the Note Principal Amount of such Class of Fixed
Rate Subordinate Notes immediately prior to the subject Payment Date over (2)
the lesser of (a) the product of (x) 100% minus the Stepdown Target
Subordination Percentage for the subject Class of Notes and (y) the aggregate
Stated Principal Balance of the Mortgage Loans in [Pool 1] for such Payment
Date and (b) the aggregate Stated Principal Balance of the Mortgage Loans in
[Pool 1] for such Payment Date minus the Fixed Rate OC Floor; provided,
however, that if such Class of Fixed Rate Subordinate Notes is the only Class
of Fixed Rate Subordinate Notes outstanding on such Payment Date, that Class
will be entitled to receive the entire remaining Principal Distribution Amount
for [Pool 1] until the Note Principal Amount thereof is reduced to zero.
Fixed Rate Stepdown Date: The later to occur of (x) the Payment Date in
______ 200_ and (y) the first Payment Date on which the aggregate Note
Principal Amount of the [Group AF] Notes (after calculating anticipated
distributions on such Payment Date) is less than or equal to ______% of the
aggregate Stated Principal Balance of the Mortgage Loans in [Pool 1] for such
Payment Date.
Fixed Rate Subordinate Notes: The [Class MF-1], [Class MF-2], [Class
MF-3], [Class MF-4], [Class MF-5], [Class MF-6], [Class MF-7], [Class MF-8]
and [Class BF] Notes.
Fixed Rate Trigger Event: With respect to any Payment Date on or after
the Fixed Rate Stepdown Date, consists of either a Fixed Rate Delinquency
Trigger Event with respect to that Payment Date or a Fixed Rate Cumulative
Loss Trigger Event with respect to that Payment Date.
Form 10-D Disclosure Item: With respect to any Person, any material
litigation or governmental proceedings pending against such Person, or against
any of the Trust Fund, the Depositor, the Trust Administrator, the Indenture
Trustee, the Owner Trustee, the Servicer, the Master Servicer or any
Subservicer, if such Person has actual knowledge thereof.
Form 10-K Disclosure Item: With respect to any Person, (a) any Form 10-D
Disclosure Item and (b) any affiliations or relationships between such Person
and any Item 1119 Party.
▇▇▇▇▇▇▇ Mac or FHLMC: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under
Title III of the Emergency Home Finance Act of 1970, as amended, or any
successor thereto.
Funding Period: The period from the Closing Date to and including the
earlier to occur of (x) the date the amount in the Pre-Funding Account is
less than $[25,000] and (y) ________ ___, 200_.
▇▇▇▇▇▇ Mae or GNMA: The Government National Mortgage Association, a
wholly owned corporate instrumentality of the United States within HUD.
22
[Group 2-AV] Cap Agreement: The interest rate cap agreement transaction
evidenced by the related Confirmation (as assigned to the Trust pursuant to
the Cap Agreement Assignment Agreement), with respect to the [Class 2-AV-1]
and [Class 2-AV-2] Notes.
[Group 2-AV] Cap Agreement Payment Date: With respect to the [Group AV]
Cap Agreement, the Business Day immediately preceding the related Payment
Date, beginning with the Payment Date in __________ 200_ and ending with the
Payment Date in _______200_.
[Group 2-AV] Notes: The [Class 2-AV-1] and [Class 2-AV-2] Notes.
[Group 2-AV] Principal Distribution Amount: With respect to any Payment
Date, the product of (x) the [Group AV] Principal Distribution Target Amount
and (y) a fraction, the numerator of which is the [Group 2-AV] Principal
Distribution Target Amount and the denominator of which is the sum of the
[Group 2-AV] Principal Distribution Target Amount and [Group 3-AV] Principal
Distribution Target Amount.
[Group 2-AV] Principal Distribution Target Amount: With respect to any
Payment Date, the excess of (1) the aggregate Note Principal Amount of the
[Group 2-AV] Notes immediately prior to such Payment Date, over (2) the lesser
of (x) _____% of the aggregate Stated Principal Balance of the Mortgage Loans
in [Pool 2] for such Payment Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans in [Pool 2] for such Payment Date minus ___% of
the aggregate Stated Principal Balance of the Mortgage Loans in [Pool 2] and
the original [Pool 2] Pre-Funded Amount as of the Cut-off Date.
[Group 3-AV] Cap Agreement: The interest rate cap agreement transaction
evidenced by the related Confirmation (as assigned to the Trust pursuant to
the Cap Agreement Assignment Agreement), with respect to the [Class 3-AV-1],
[Class 3-AV-2], [Class 3-AV-3] and [Class 3-AV-4] Notes.
[Group 3-AV] Cap Agreement Payment Date: With respect to the [Group AV]
Cap Agreement, the Business Day immediately preceding the related Payment
Date, beginning with the Payment Date in __________ 200_ and ending with the
Payment Date in _______200_.
[Group 3-AV] Notes: The [Class 3-AV-1], [Class 3-AV-2], [Class 3-AV-3]
and [Class 3-AV-4] Notes.
[Group 3-AV] Principal Distribution Amount: With respect to any Payment
Date, the product of (x) the [Group AV] Principal Distribution Target Amount
and (y) a fraction, the numerator of which is the [Group 3-AV] Principal
Distribution Target Amount and the denominator of which is the sum of the
[Group 2-AV] Principal Distribution Target Amount and the [Group 3-AV]
Principal Distribution Target Amount.
[Group 3-AV] Principal Distribution Target Amount: With respect to any
Payment Date, the excess of (1) the aggregate Note Principal Amount of the
[Group 3-AV] Notes immediately prior to such Payment Date, over (2) the lesser
of (x) ____% of the aggregate Stated Principal Balance of the Mortgage Loans
in [Pool 3] for such Payment Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans in [Pool 3] for such Payment Date minus ___% of
the
23
sum of the aggregate Stated Principal Balance of the Mortgage Loans in [Pool
3] and the original [Pool 3] Pre-Funded Amount as of the Cut-off Date.
[Group AF] Notes: The [Class AF-1A], [Class AF-1B], [Class AF-2], [Class
AF-3], [Class AF-4], [Class AF-5A], [Class AF-5B] and [Class AF-6] Notes.
[Group AF] Principal Distribution Amount: With respect to any Payment
Date, the excess of (1) the aggregate Note Principal Amount of the [Group AF]
Notes immediately prior to such Payment Date, over (2) the lesser of (x) ____%
of the aggregate Stated Principal Balance of the Mortgage Loans in [Pool 1]
for such Payment Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans in [Pool 1] and the original [Pool 1] Pre-Funded Amount as of
the Cut-off Date for such Payment Date minus the Fixed Rate OC Floor.
[Group AV] Notes: The [Group 2-AV] and [Group 3-AV] Notes
Guidelines: As defined in Section 4.02(u).
Holder or Noteholder: The registered holder of any Note or Ownership
Certificate as recorded on the books of the Note Registrar or the Certificate
Registrar except that, solely for the purposes of taking any action or giving
any consent pursuant to this Agreement, any Note registered in the name of the
Depositor, the Master Servicer, the Servicer, the Seller, the Trust
Administrator or the Indenture Trustee or any Affiliate thereof (unless any
such Person owns [100]% of a Class) shall be deemed not to be outstanding in
determining whether the requisite percentage necessary to effect any such
consent has been obtained, except that, in determining whether the Indenture
Trustee and Trust Administrator shall be protected in relying upon any such
consent, only Notes and an Ownership Certificate which a Responsible Officer
thereof has actual knowledge to be so held shall be disregarded. The Indenture
Trustee and Trust Administrator may request and conclusively rely on
certifications by the Depositor in determining whether any Note or Ownership
Certificate is registered to an Affiliate of the Depositor.
HUD: The United States Department of Housing and Urban Development, or
any successor thereto and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.
Indenture: The Indenture dated as of _______, 200_, among the Issuer,
the Trust Administrator and the Indenture Trustee, as such may be amended or
supplemented from time to time.
Indenture Event of Default: As defined in Section 5.01 of the Indenture.
Indenture Trustee: ____________________________________, not in its
individual capacity but solely as Indenture Trustee, or any successor in
interest.
Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and
Exchange Commission's Regulation S-X. When used with respect to any other
Person, a Person who (a) is in fact independent of another specified Person
and any Affiliate of such other Person, (b) does not have
24
any material direct financial interest in such other Person or any Affiliate
of such other Person, and (c) is not connected with such other Person or any
Affiliate of such other Person as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions.
Index: The index specified in the related Mortgage Note for
calculation of the Mortgage Rate thereof.
Insurance Policy: Any primary mortgage insurance policy, any standard
hazard insurance policy, flood insurance policy, earthquake insurance policy
or title insurance policy relating to the Mortgage Loans or the Mortgaged
Properties, to be in effect as of the Closing Date or thereafter during the
term of this Agreement.
Insurance Proceeds: With respect to each Mortgage Loan (other than by
the [Class AF-5B] Insurer under the [Class AF-5B] Policy), proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property, if applicable, including the proceeds of any hazard or flood
insurance policy reduced by expenses incurred by the Servicer in connection
with procuring such proceeds, applied to the restoration and repair of the
related mortgaged property or to be paid to the borrower pursuant to the
mortgage note or state law.
Insured Payments: With respect to any Payment Date, the aggregate amount
actually paid by the [Class AF-5B] Insurer to the Trust Administrator in
respect of (i) Insured Amounts for a Payment Date and (ii) Preference Amounts
for any given Business Day.
Interest Carry Forward Amount: With respect to each Class of
interest-bearing Notes and each Payment Date, the excess of (i) the Current
Interest for such Class with respect to prior Payment Dates over (ii) the
amount actually distributed to such Class with respect to interest on such
prior Payment Dates.
Interest Margin: For each Class of Notes and any Payment Date, the
applicable percentage set forth for such class in the following table:
Interest Interest
Class Margin (1) Margin (2)
--------------------------- ------------ -------------
[AF-1A]...................... ____% ____%
[AF-1B]...................... ____% ____%
[AF-2]....................... ____% ____%
[AF-3]....................... ____% ____%
[AF-4]....................... ____% ____%
[AF-5A]...................... ____% ____%
[AF-5B]...................... ____% ____%
[AF-6]....................... ____% ____%
[MF-1]....................... ____% ____%
[MF-2]....................... ____% ____%
[MF-3]....................... ____% ____%
[MF-4]....................... ____% ____%
[MF-5]....................... ____% ____%
[MF-6]....................... ____% ____%
[MF-7]....................... ____% ____%
[MF-8]....................... ____% ____%
25
[BF]......................... ____% ____%
[2-AV-1]..................... ____% ____%
[2-AV-2]..................... ____% ____%
[3-AV-1]..................... ____% ____%
[3-AV-2]..................... ____% ____%
[3-AV-3]..................... ____% ____%
[3-AV-4]..................... ____% ____%
[MV-1]....................... ____% ____%
[MV-2]....................... ____% ____%
[MV-3]....................... ____% ____%
[MV-4]....................... ____% ____%
[MV-5]....................... ____% ____%
[MV-6]....................... ____% ____%
[MV-7]....................... ____% ____%
[MV-8]....................... ____% ____%
[BV]......................... ____% ____%
---------------------------
(1) For any Payment Date occurring prior to the Stepup Date.
(2) For any Payment Date occurring on or after the Stepup Date.
Interest Rate Cap Account: A separate account established and maintained
by the Trust Administrator for the benefit of the Noteholders pursuant to
Section 6.06.
Interest Rate Cap Agreement: The [Class AF-1A] Cap Agreement, the [Group
2-AV] Cap Agreement, the [Group 3-AV] Cap Agreement or the Subordinate Cap
Agreement, as applicable.
Interest Rate Cap Agreement Payment Date: A [Class AF-1A] Cap Agreement
Payment Date, [Group 2-AV] Cap Agreement Payment Date, [Group 3-AV] Cap
Agreement Payment Date or Subordinate Cap Agreement Payment Date, as the case
may be.
Interest Rate Cap Receipt: With respect to any Interest Rate Cap
Agreement Payment Date, any amount received by the Trust Administrator from
the Cap Counterparty under any Interest Rate Cap Agreement.
Interest Remittance Amount: With respect to each Pool and any Payment
Date, (a) the sum of, without duplication, (1) all interest collected (other
than the interest portion of Payaheads) or advanced in respect of Scheduled
Payments on the Mortgage Loans in such Pool during the related Collection
Period by the Servicer, the Master Servicer or the Indenture Trustee (solely
in its capacity as successor Master Servicer), minus, (x) to the extent
provided under Sections 4.02(e)(3) and (4) and Sections 5.08(i) and (ii)
herein, previously unreimbursed Advances due to the Servicer, the Master
Servicer or the Indenture Trustee (solely in its capacity as successor Master
Servicer), to the extent allocable to interest and the allocable portion of
previously unreimbursed Servicing Advances with respect to the Mortgage Loans
in such Pool during the related Prepayment Period, (y) the related Servicing
Fee and the Master Servicing Fee with respect to such Mortgage Loans in such
Pool and (z) all Prepayment Premiums received with respect to such Mortgage
Loans during the related Prepayment Period, (2) any Compensating Interest
Payments or payments in respect of Prepayment Interest Shortfalls paid by the
Servicer or the Master Servicer pursuant to Section 5.21 with respect to the
related
26
Prepayment Period with respect to the Mortgage Loans in such Pool, (3) the
portion of any Purchase Price or Substitution Amount paid with respect to the
Mortgage Loans in such Pool during the related Prepayment Period allocable to
interest, and (4) all Net Liquidation Proceeds, Insurance Proceeds and any
other recoveries collected with respect to the Mortgage Loans in such Pool
during the related Prepayment Period, to the extent allocable to interest, as
reduced by (b) such Pool's pro rata share of any costs, expenses, fees or
liabilities due to the Master Servicer, the Servicer, the Indenture Trustee,
the Custodian, the Owner Trustee or the Trust Administrator to the extent
provided in this Agreement, the Trust Agreement, the Indenture and the
Custodial Agreement.
Intervening Assignments: The original intervening assignments of the
Mortgage, notices of transfer or equivalent instrument.
Issuer: The Delaware statutory trust known as the "______ Mortgage
Investment Trust 200_-__."
Issuer Order or Issuer Request: A written order or request signed in the
name of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee and the Trust Administrator.
Item 1119 Party: The Depositor, the Seller, the Master Servicer, the
Servicer, any Subservicer, the Indenture Trustee, the Trust Administrator, the
Owner Trustee, any originator identified in the Prospectus Supplement, the Cap
Counterparty and any other material transaction party, as identified in
Exhibit I hereto, as updated pursuant to Section 11.04.
Last Scheduled Payment Date: With respect to the [Class AF-5B] Notes,
the Payment Date occurring in __________ 20__.
LIBOR: (a) With respect to the first Accrual Period, the per annum rate
of ____%. With respect to each subsequent Accrual Period, a per annum rate
determined on the LIBOR Determination Date in the following manner by the
Trust Administrator on the basis of the "Interest Settlement Rate" set by the
British Bankers' Association (the "BBA") for one-month United States dollar
deposits, as such rates appear on the Telerate Page 3750, as of 11:00 a.m.
(London time) on such LIBOR Determination Date.
(b) If on such a LIBOR Determination Date, the BBA's Interest
Settlement Rate does not appear on the Telerate Page 3750 as of 11:00 a.m.
(London time), or if the Telerate Page 3750 is not available on such date, the
Trust Administrator will determine such rate on the basis of the offered rates
of the Reference Banks for one-month United States dollar deposits, as such
rates appear on the Reuters Screen LIBO Page or the Bloomberg Screen LIBO
Page, in either case as of 11:00 a.m. (London time) on such LIBOR
Determination Date.
(c) If LIBOR is determined under clause (b) above, on each LIBOR
Determination Date, LIBOR for the related Accrual Period for the Notes will be
established by the Trust Administrator as follows:
(1) If on such LIBOR Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the related Accrual
Period for the Notes shall
27
be the arithmetic mean of such offered quotations (rounded upwards if
necessary to the nearest whole multiple of [0.03125]%).
(2) If on such LIBOR Determination Date fewer than two Reference
Banks provide such offered quotations, LIBOR for the related Accrual
Period shall be the higher of (x) LIBOR as determined on the previous
LIBOR Determination Date and (y) the Reserve Interest Rate.
(d) The establishment of LIBOR by the Trust Administrator and the
Trust Administrator's subsequent calculation of the Note Interest Rate
applicable to each Class of Notes for the relevant Accrual Period, in the
absence of manifest error, will be final and binding.
LIBOR Business Day: Any day on which banks in London, England and The
City of New York are open for conducting transactions in foreign currency and
exchange.
LIBOR Determination Date: The second LIBOR Business Day immediately
preceding the commencement of each Accrual Period for any Notes.
Limited Exchange Act Reporting Obligations: The obligations of the
Master Servicer under Section 4.08 and Section 5.24 with respect to notice and
information to be provided to the Depositor and Article XI (except Section
11.07(a)(1) and (2)).
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Master Servicer or the Servicer, as applicable, has determined that all
amounts that it expects to recover from or on account of such Mortgage Loan
have been recovered (exclusive of any possibility of a deficiency judgment).
Liquidation Expenses: Expenses that are incurred by the Master Servicer
or the Servicer, as applicable, in connection with the liquidation of any
defaulted Mortgage Loan and are not recoverable under the applicable primary
mortgage insurance policy, if any, including, without limitation, foreclosure
and rehabilitation expenses, legal expenses and unreimbursed amounts, if any,
expended pursuant to Section 4.02(c), 4.02(k) or 4.02(p).
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale, payment in full, discounted
payoff or otherwise, or the sale of the related REO Property, if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.
Loan Number and Borrower Identification Mortgage Loan Schedule: With
respect to any Subsequent Transfer Date, the Loan Number and Borrower
Identification Mortgage Loan Schedule delivered in connection with such
Subsequent Transfer Date pursuant to Section 2.01(f). Each Loan Number and
Borrower Identification Mortgage Loan Schedule shall contain the information
specified in the definition of "Mortgage Loan Schedule" with respect to the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, and each
Loan Number and Borrower Identification Mortgage Loan Schedule shall be deemed
to be included in the Mortgage Loan Schedule.
28
Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio of the
principal balance of such Mortgage Loan at origination, or such other date as
is specified, to the Original Value of the related Mortgaged Property.
Majority Noteholders: Until such time as the sum of the Class Principal
Amounts of all Classes of Notes has been reduced to zero, the holder or
holders of in excess of [50]% of the aggregate Class Principal Amount of all
Classes of Notes (accordingly, the holder of the Ownership Certificate shall
be excluded from any rights or actions of the Majority Noteholders during such
period); and thereafter, the holder of the Ownership Certificate.
Master Servicer: ____________________, or any successor in interest, or
if any successor master servicer shall be appointed as herein provided, then
such successor master servicer.
Master Servicer Event of Default: Any one of the conditions or
circumstances enumerated in Section 8.01(a).
Master Servicing Fee: As to any Payment Date and each Mortgage Loan, an
amount equal to the product of (i) one-twelfth of the Master Servicing Fee
Rate and (ii) the Stated Principal Balance of such Mortgage Loan as of the
first day of the related Collection Period.
Master Servicing Fee Rate: ______%.
Material Defect: With respect to any Mortgage Loan, as defined in
Section 2.02(c) hereof.
Maturity Date: With respect to any Class of Notes, the Payment Date in
____ 20__.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of
MERS, as nominee for the holder from time to time of the Mortgage Note.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor in interest.
Mortgage: A mortgage, deed of trust or other instrument encumbering a
fee simple interest in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01(g)
pertaining to a particular Mortgage Loan required to be delivered to the
Indenture Trustee (or the Custodian) pursuant to this Agreement.
Mortgage Loan: A mortgage loan that is conveyed to the Issuer pursuant
to this Agreement on the Closing Date (an "Initial Mortgage Loan") or a
mortgage loan that is conveyed to the Issuer pursuant to a Subsequent Transfer
Agreement on a Subsequent Transfer Date (a "Subsequent Mortgage Loan"), which
mortgage loan includes, without limitation, the
29
mortgage loan documents, the Scheduled Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, any related
REO Property, REO Disposition Proceeds, and all other rights, benefits,
proceeds and obligations arising from or in connection with such mortgage
loan. The Initial Mortgage Loans subject to this Agreement are identified on
the Mortgage Loan Schedule annexed hereto as Schedule A and have an aggregate
Stated Principal Balance as of the Cut-off Date of $_________________. Any
Subsequent Mortgage Loan conveyed pursuant to a Subsequent Transfer Agreement
shall be added to the Mortgage Loan Schedule as of the Subsequent Transfer
Date.
Mortgage Loan Purchase Agreement: The mortgage loan purchase and
assignment agreement dated as of _______, 200_, for the sale of the Mortgage
Loans by Seller to the Depositor.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
Mortgage Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A,
which shall identify each Mortgage Loan, as such schedule may be amended from
time to time to reflect the addition of Mortgage Loans to, or the deletion of
Mortgage Loans from, the Trust Estate. Such schedule shall set forth, among
other things, the following information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number; (ii) the Mortgagor's name; (iii) the
street address of the Mortgaged Property including the city, state and zip
code; (iv) the original principal amount of the Mortgage Loan; (v) the
Mortgage Rate at origination; (vi) the Index; (vii) the first Mortgage Rate
adjustment date; (viii) the monthly payment of principal and interest at
origination; (ix) the Servicing Fee Rate; (x) the Master Servicer Fee Rate;
and (xi) whether such Mortgage Loan is subject to a Prepayment Premium for
voluntary prepayments by the Mortgagor, the term during which such Prepayment
Premiums are imposed and the method of calculation of the Prepayment Premium.
The Servicer shall be responsible for providing the Indenture Trustee, the
Custodian and the Master Servicer with all amendments to the Mortgage Loan
Schedule.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgaged Property: The underlying real property securing a Mortgage
Loan.
Mortgage Rate: As to any Mortgage Loan, the per annum rate at which
interest accrues on such Mortgage Loan, as determined under the related
Mortgage Note as reduced by the applications of the Civil Relief Act.
Mortgagor: The obligor on a Mortgage Note.
NAS Factor: For any Payment Date set forth below, the percentage set
forth in the following table:
Payment Date Percentage
---------------------------------------------- ------------------
_____ 200_ - _______ 200_....................... __%
_____ 200_ - _______ 200_....................... __%
30
_____ 200_ - _______ 200_....................... __%
_____ 200_ - _______ 200_....................... __%
_____ 200_ and thereafter....................... __%
NAS Principal Distribution Amount: For any Payment Date, an amount equal
to the product of (i) the [Class AF-6] Portion for such Payment Date, (ii) any
amounts distributed to the [Group AF] Notes pursuant to Section 6.02 for such
Payment Date and (iii) the NAS Factor for such Payment Date.
Net Funds Cap: With respect to any Payment Date, an annual rate equal
to:
(i) in the case of the [Group AF] Notes, the weighted average of the Net
Mortgage Rates of the Mortgage Loans in [Pool 1] as of the first day of the
related Collection Period, adjusted to reflect the accrual of interest on an
actual/360 basis;
(ii) in the case of the [Group 2-AV] Notes, the weighted average of the
Net Mortgage Rates of the Mortgage Loans in [Pool 2] as of the first day of
the related Collection Period, adjusted to reflect the accrual of interest on
an actual/360 basis;
(iii) in the case of the [Group 3-AV] Notes, the weighted average of the
Net Mortgage Rates of the Mortgage Loans in [Pool 3] as of the first day of
the related Collection Period, adjusted to reflect the accrual of interest on
an actual/360 basis;
(iv) in the case of each class of Fixed Rate Subordinate Notes, the
weighted average of the Net Mortgage Rates of the Mortgage Loans in [Pool 1]
as of the first day of the related Collection Period, weighted on the basis of
the excess of the Pool Balance for [Pool 1] as of the first day of the related
Collection Period over the aggregate of the Class Principal Amounts of the
[Group AF] Notes immediately prior to that Payment Date, and adjusted to
reflect the accrual of interest on an actual/360 basis; and
(v) in the case of each class of Adjustable Rate Subordinate Notes, the
weighted average of (a) the weighted average of the Net Mortgage Rates of the
Mortgage Loans in [Pool 2] as of the first day of the related Collection
Period and (b) the weighted average of the Net Mortgage Rates of the Mortgage
Loans in [Pool 3] as of the first day of the related Collection Period,
weighted on the basis of the excess of (x) in the case of clause (iii)(a), the
excess of the Pool Balance for [Pool 2] as of the first day of the related
Collection Period over the aggregate of the Class Principal Amounts of the
[Group 2-AV] Notes immediately prior to that Payment Date and (y) in the case
of clause (iii)(b), the excess of the Pool Balance for [Pool 3] as of the
first day of the related Collection Period over the Class Principal Amount of
the [Group 3-AV] Notes immediately prior to that Payment Date, and adjusted to
reflect the accrual of interest on an actual/360 basis.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
the related Liquidation Proceeds, Insurance Proceeds and Condemnation Proceeds
received and retained in connection with the liquidation of such Mortgage Loan
net of (i) Liquidation Expenses and (ii) any related unreimbursed Advances and
Servicing Advances, if any.
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Net Mortgage Rate: With respect to any Mortgage Loan, the Mortgage Rate
thereof reduced by sum of the Servicing Fee Rate and the Master Servicing Fee
Rate.
Net Rate Carryover: With respect to any Class of interest bearing Notes
and any Payment Date, the sum of (A) the excess of (i) the amount of interest
that such Class would otherwise have accrued for such Payment Date had the
Note Interest Rate for such Class and the related Accrual Period not been
determined based on the applicable Net Funds Cap, over (ii) the amount of
interest accrued on such Class at the applicable Net Funds Cap for such
Payment Date and (B) the Net Rate Carryover for such Class for all previous
Payment Dates not previously paid pursuant to Section 6.02, together with
interest thereon at the then-applicable Note Interest Rate for such Class,
without giving effect to the applicable Net Funds Cap.
New York UCC: The Uniform Commercial Code as in effect in the State of
New York.
Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage
Loan.
Nonrecoverable Advance: Any Servicing Advance or Advance previously made
or proposed to be made in respect of a Mortgage Loan by the Servicer which, in
the reasonable discretion of the Servicer will not or, in the case of a
proposed Servicing Advance or Advance, would not, ultimately be recoverable by
the Servicer from the related Mortgagor, related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds or
otherwise. The determination by the Servicer that all or a portion of a
Servicing Advance or Advance would be a Nonrecoverable Advance shall be
evidenced by an Officer's Certificate delivered to the Master Servicer setting
forth such determination and a reasonable explanation thereof.
Note: Any [Class AF-1A], [Class AF-1B], [Class AF-2], [Class AF-3],
[Class AF-4], [Class AF-5A], [Class AF-5B], [Class AF-6], [Class MF-1], [Class
MF-2], [Class MF-3], [Class MF-4], [Class MF-5], [Class MF-6], [Class MF-7],
[Class MF-8], [Class BF], [Class 2-AV-1], [Class 2-AV-2], [Class 3-AV-1],
[Class 3-AV-2], [Class 3-AV-3], [Class 3-AV-4], [Class MV-1], [Class MV-2],
[Class MV-3], [Class MV-4], [Class MV-5], [Class MV-6], [Class MV-7], [Class
MV-8], [Class BV], [Class PF], [Class PV], [Class CF] or [Class CV] Note.
Note Interest Rate: With respect to each Class of Notes on any Payment
Date, the least of (1) LIBOR plus the Interest Margin for such Class and such
Payment Date, (2) the applicable Net Funds Cap for such Payment Date and (3)
the Fixed Rate Cap.
Note Principal Amount: With respect to any Note, the initial principal
amount thereof on the Closing Date, less the amount of all principal payments
previously paid with respect to such Note.
Note Register and Note Registrar: As defined in the Indenture.
Officer's Certificate: A certificate signed by the Chairman of the
Board, any Vice Chairman, the President, any Senior Vice President, any Vice
President or any Assistant Vice President of a Person.
32
Operative Agreements: The Trust Agreement, the Certificate of Trust of
the Issuer, this Agreement, the Mortgage Loan Purchase Agreement, the
Indenture, the Custodial Agreement, the Depository Agreement, each Interest
Rate Cap Agreement, the Cap Agreement Assignment Agreement and each other
document contemplated by any of the foregoing to which the Depositor, the
Seller, the Master Servicer, the Servicer, the Owner Trustee, the Trust
Administrator, the Indenture Trustee, the Custodian or the Issuer is a party.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable
in form and substance to the Seller, the Trust Administrator, the Indenture
Trustee and/or the Master Servicer, as applicable, and who may be in house or
outside counsel to the Seller, the Servicer, the Depositor, the Master
Servicer, the Trust Administrator or the Indenture Trustee but which must be
Independent outside counsel with respect to any such opinion of counsel
concerning federal income tax or ERISA matters.
Original Value: The lesser of (a) the Appraised Value of a Mortgaged
Property at the time the related Mortgage Loan was originated and (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price paid for the Mortgaged Property by the Mortgagor
at the time the related Mortgage Loan was originated.
Overcollateralization Amount: With respect to any Payment Date will be
equal to the amount, if any, by which (x) the Aggregate Collateral Balance for
such Payment Date exceeds (y) the aggregate Class Principal Amount of the
Notes, in each case after giving effect to payments on such Payment Date.
Overcollateralization Deficiency Amount: With respect to any Payment
Date, the excess, if any, of the Targeted Overcollateralization Amount for
that Payment Date over the Overcollateralization Amount for that Payment Date.
Ownership Certificate: An equity certificate representing a 100%
undivided beneficial ownership interest in the Trust, substantially in the
form attached as part of Exhibit A to the Trust Agreement.
Owner Trustee: _____________________, a ____________________, and any
successor in interest, not in its individual capacity, but solely as owner
trustee under the Trust Agreement.
Owner Trustee Fee: The annual fee payable to the Owner Trustee by the
Trust Administrator pursuant to the Fee Letter Agreement specified in Section
7.03 of the Trust Agreement during the term of this Agreement.
Payahead: With respect to any Mortgage Loan and any Due Date therefor,
any Scheduled Payment received by the Servicer during any Collection Period in
addition to the Scheduled Payment due on such Due Date, intended by the
related Mortgagor to be applied on a subsequent Due Date or Due Dates.
Paying Agent: As defined in the Indenture. The initial Paying Agent
shall be the Trust Administrator.
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Payment Date: The [25th] day of each month or, if such [25th] day is
not a Business Day, the next succeeding Business Day, commencing in ________
200_.
Percentage Interest: The Percentage Interest evidenced thereby shall
equal (i) with respect to the Ownership Certificate, the Percentage Interest
on the face of such certificate; or (ii) with respect to any Note, the initial
Note Principal Amount thereof, divided by the initial Class Principal Amount
of all Notes of the same Class.
Performance Certification: As defined in Section 11.05.
Person: Any individual, corporation, partnership, joint venture,
association, joint stock company, limited liability company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Plan: An employee benefit plan or other retirement arrangement which is
subject to Section 406 of ERISA and/or Section 4975 of the Code or any entity
whose underlying assets include such plan's or arrangement's assets by reason
of their investment in the entity.
Plan Asset Regulations: The Department of Labor regulations set forth
in 29 C.F.R. 2510.3 101.
Pool: [Pool 1], [Pool 2] or [Pool 3] as applicable.
[Pool 1]: The portion of the Mortgage Pool identified as [Pool 1].
[Pool 1] Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as [Pool 1] Mortgage Loans
on the Closing Date, which shall equal $_________________.
[Pool 1] Senior Notes: The [Class AF-1A], [Class AF-1B], [Class AF-2],
[Class AF-3], [Class AF-4], [Class AF-5A], [Class AF-5B] and [Class AF-6]
Notes.
[Pool 2]: The portion of the Mortgage Pool identified as [Pool 2].
[Pool 2] Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as [Pool 2] Mortgage Loans
on the Closing Date, which shall equal $___________________.
[Pool 2] Senior Notes: The [Class 2-AV-1] and [Class 2-AV-2] Notes.
[Pool 2] Sequential Trigger Event: With respect to any Payment Date (i)
prior to the Payment Date in ______ 200_, if (x) the aggregate amount of
Realized Losses on the Mortgage Loans in [Pool 2] from the Cut-off Date for
each such Mortgage Loan to (and including) the last day of the related Due
Period (reduced by the aggregate amount of any Recoveries related to the
Mortgage Loans in [Pool 2] received through the last day of that Due Period)
exceeds (y) ______% of the sum of the aggregate Cut-off Date Principal Balance
of the Initial Mortgage Loans in [Pool 2] and the [Pool 2] Pre-Funded Amount
or (ii) on or after the Payment Date in ______ 200_, if an Adjustable Rate
Trigger Event is in effect.
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[Pool 3]: The portion of the Mortgage Pool identified as [Pool 3].
[Pool 3] Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as [Pool 3] Mortgage Loans
on the Closing Date, which shall equal $__________________.
[Pool 3] Senior Notes: The [Class 3-AV-1], [Class 3-AV-2], [Class
3-AV-3] and [Class 3-AV-4] Notes.
Pool Balance: With respect to each Pool and any Payment Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans in such Pool.
Prepayment Interest Excess Amount: For any Servicer Remittance Date and
any Principal Prepayment received during the portion of the related Prepayment
Period occurring from and including the first day through the fifteenth day of
the calendar month in which such Servicer Remittance Date occurs, an amount
equal to interest (to the extent received) due in connection with such
Principal Prepayment.
Preference Amount: Any payment of principal or interest on a [Class
AF-5B] Note which has become Due for Payment and which was made to a Holder by
or on behalf of the Trust Fund, which has been deemed a preferential transfer
and was previously recovered from the Holder pursuant to the United States
Bankruptcy Code in accordance with a final, non-appealable order of a court of
competent jurisdiction.
Preference Claim: As defined in Section 6.07(h).
Pre-Funded Amount: The amount deposited in the Pre-Funding Account on
the Closing Date, which shall equal $________________.
Pre-Funding Account: The separate Eligible Account created and
maintained by the Trust Administrator pursuant to this Agreement in the name
of the Trust Administrator for the benefit of the Noteholders and designated
"_______________________, in trust for registered holders of ___________,
Asset-Backed Notes, Series 200_-__." Funds in the Pre-Funding Account shall be
held in trust for the Noteholders for the uses and purposes set forth in this
Agreement.
Prepayment Interest Shortfall Amount: With respect to any voluntary
Principal Prepayment in full or in part by the Mortgagor on any Mortgage Loan
that is received during the period from the first day of the Prepayment Period
through the last day of the calendar month preceding the related Payment Date,
the amount, if any, by which one month's interest at the Mortgage Rate minus
the Servicing Fee, in the case of the Servicer, or at the Net Mortgage Rate,
in the case of the Master Servicer, for such Mortgage Loan on the amount of
such Principal Prepayment exceeds the amount of interest received from such
Mortgagor in respect of such Principal Prepayment.
Prepayment Period: With respect to any Payment Date, the period
beginning from and including the sixteenth day of the month preceding the
month in which such Payment Date
35
occurs (or, in the case of the initial prepayment period, beginning on the
Cut-off Date) to and including the fifteenth day of the month in which such
Payment Date occurs.
Prepayment Premiums: Any prepayment fees and penalties to be paid by the
Mortgagor on a Mortgage Loan in the case of a full or partial voluntary
prepayment of such Mortgage Loan during the related Prepayment Period.
Prime Rate: The prime rate of the United States money center commercial
banks as published in The Wall Street Journal, Northeast Edition.
Principal Deficiency Amount: With respect to any class of Subordinate
Notes and any Payment Date, the lesser of (a) the excess, if any, of (1) the
Total Principal Deficiency Amount over (2) the aggregate of the Principal
Deficiency Amounts for the classes of Subordinate Notes, if any, that have a
lower priority of payment than the subject class and (b) the Class Principal
Amount of the subject class of Notes immediately prior to such Payment Date.
Principal Distribution Amount: With respect to each Payment Date and a
Pool, the sum of (i) the Principal Remittance Amount for such Pool for such
Payment Date, (ii) the Extra Principal Distribution Amount for such Pool for
such Payment Date and (iii) with respect to the Payment Date immediately
following the end of the Funding Period, the amount, if any, remaining in the
Pre-Funding Account at the end of the Funding Period (net of any investment
income therefrom) allocable to such Pool.
Principal Payment Amount: With respect to each Pool for any Payment
Date, an amount equal to the Principal Remittance Amount for such Pool for
such date minus the Aggregate Overcollateralization Release Amount
attributable to such Pool for such Payment Date.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan, including any payment or other recovery of principal in
connection with the repurchase of a Mortgage Loan by the Seller, the Servicer
or any other Person received in advance of such Mortgage Loan's scheduled Due
Date.
Principal Remittance Amount: With respect to any Payment Date and for
each Pool, (a) the sum of (i) all principal collected (other than the
principal portion of Payaheads) or advanced in respect of Scheduled Payments
on the Mortgage Loans in such Pool during the related Collection Period
whether by the Servicer, the Master Servicer or any successor Master Servicer
(less unreimbursed Advances due to the Master Servicer, the Servicer or the
Indenture Trustee as successor Master Servicer, or any other successor Master
Servicer, with respect to such Pool, and any unreimbursed Servicing Advances,
in each case, to the extent allocable to principal and to the extent provided
under Sections 4.02(e)(3) and (4) and Sections 5.08(i) and (ii)), (ii) all
Principal Prepayments in full or in part received during the related
Prepayment Period on the Mortgage Loans in such Pool, (iii) the Stated
Principal Balance of each Mortgage Loan in such Pool that was purchased from
the Trust Estate during the related Prepayment Period, (iv) the portion of any
Substitution Amount paid with respect to any Deleted Mortgage Loan relating to
a Mortgage Loan in such Pool during the related Prepayment Period allocable to
principal, (v) all Net Liquidation Proceeds, Insurance Proceeds, REO
Disposition Proceeds and other Recoveries collected with respect to such
Mortgage Loans in such Pool during the related Prepayment
36
Period, to the extent allocable to principal and (vi) all other unscheduled
collections and recoveries in respect of principal during the related
Prepayment Period, as reduced by (b) such Pool's pro rata share of: other
costs, expenses, fees or liabilities reimbursable to the Indenture Trustee,
the Owner Trustee, the Custodian, the Trust Administrator, the Master Servicer
and the Servicer to the extent provided in this Agreement, the Trust
Agreement, the Indenture and the Custodial Agreement and to the extent not
reimbursed from the Interest Remittance Amount, or otherwise.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Property Charges: As defined in Section 4.02(i).
Prospectus: The Prospectus Supplement, together with the accompanying
prospectus dated _________, 200_.
Prospectus Supplement: The prospectus supplement dated _____, 200_
relating to the Notes.
Purchase Price: With respect to the purchase of a Mortgage Loan or
related REO Property pursuant to this Agreement, an amount equal to the sum of
(a) 100% of the unpaid principal balance of such Mortgage Loan, (b) accrued
interest thereon at the applicable Mortgage Rate, from the date as to which
interest was last paid to (but not including) the Due Date in the Collection
Period during which such Mortgage Loan or REO Property is being so purchased;
(c) if applicable, the fair market value of the REO Property and all other
property being purchased; (d) any unreimbursed Servicing Advances with respect
to such Mortgage Loan; and (e) any costs and damages incurred by the Trust
Estate associated with any violation of applicable federal, state or local
anti-predatory or anti-abusive lending laws with respect to the related
Mortgage Loan. The Master Servicer and the Servicer shall be reimbursed from
the Purchase Price for any Mortgage Loan or related REO Property for any
Advances made or other amounts advanced with respect to such Mortgage Loan
that are reimbursable to the Master Servicer or the Servicer under this
Agreement, together with any accrued and unpaid Servicing Fee and Master
Servicing Fee with respect to such Mortgage Loan.
Qualified GIC: A guaranteed investment contract or surety bond providing
for the investment of funds in the Collection Account and insuring a minimum,
fixed or floating rate of return on investments of such funds, which contract
or surety bond shall:
(i) be an obligation of an insurance company or other corporation
whose long term debt is rated by each Rating Agency in one of its two
highest rating categories or, if such insurance company has no long term
debt, whose claims paying ability is rated by each Rating Agency in one
of its two highest rating categories, and whose short-term debt is rated
by each Rating Agency in its highest rating category;
(ii) provide that the Trust Administrator on behalf of the
Indenture Trustee may exercise all of the rights under such contract or
surety bond without the necessity of taking any action by any other
Person;
37
(iii) provide that if at any time the then current credit standing
of the obligor under such guaranteed investment contract is such that
continued investment pursuant to such contract of funds would result in
a downgrading of any rating of the Notes, the Trust Administrator shall
terminate such contract without penalty and be entitled to the return of
all funds previously invested thereunder, together with accrued interest
thereon at the interest rate provided under such contract to the date of
delivery of such funds to the Trust Administrator;
(iv) provide that the Indenture Trustee's interest therein shall
be transferable to any successor trustee hereunder; and
(v) provide that the funds reinvested thereunder and accrued
interest thereon be returnable to the Collection Account not later than
the Business Day prior to any Payment Date.
Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the related Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided and whose claims paying ability
is rated by each Rating Agency in its highest rating category or whose
selection as an insurer will not adversely affect the rating of the Notes.
[Qualified REIT Subsidiary: A direct or indirect 100% owned subsidiary
of a REIT that satisfies the requirements of Section 856(i) of the Code.]
Qualifying Substitute Mortgage Loan: In the case of a Mortgage Loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this
Agreement, a Mortgage Loan that, on the date of such substitution, (i) has an
outstanding Stated Principal Balance (or in the case of a substitution of more
than one mortgage loan for a Deleted Mortgage Loan, an aggregate Stated
Principal Balance), after application of all Scheduled Payments due during or
prior to the month of substitution, not in excess of, and not more than [5]%
less than, the outstanding Stated Principal Balance of the Deleted Mortgage
Loan as of the Due Date in the calendar month during which the substitution
occurs, (ii) has a Mortgage Rate not less than, and not more than [0.50]%
higher than, the Mortgage Rate on the Deleted Mortgage Loan, (iii) if
applicable, has a maximum Mortgage Rate not less than the maximum Mortgage
Rate on the Deleted Mortgage Loan, (iv) has a minimum Mortgage Rate not less
than the minimum Mortgage Rate of the Deleted Mortgage Loan, (v) has a gross
margin equal to or greater than the gross margin of the Deleted Mortgage Loan,
(vi) (a) has a next adjustment date not later than the next adjustment date on
the Deleted Mortgage Loan, (b) has an initial periodic rate cap not less than
the Deleted Mortgage Loan and (c) has a subsequent periodic rate cap not less
than the Deleted Mortgage Loan, (vii) has the same Due Date as the Deleted
Mortgage Loan, (viii) has a remaining stated term to maturity not longer than
18 months and not more than 18 months shorter than the remaining stated term
to maturity of the related Deleted Mortgage Loan, (ix) is current as of the
date of substitution, (x) has a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (xi) has been underwritten by the Seller in
accordance with the same underwriting criteria and guidelines as the Deleted
Mortgage Loan, (xii) has a risk grading determined by the Seller at least
equal to the risk grading assigned on the Deleted Mortgage Loan, (xiii) is
secured by the same property type
38
as the Deleted Mortgage Loan, (xiv) conforms to each representation and
warranty applicable to the Deleted Mortgage Loan made in the Mortgage Loan
Purchase Agreement, (xv) has the same first lien position as the Deleted
Mortgage Loan, (xvi) is covered by a primary mortgage insurance policy if the
Deleted Mortgage Loan was so covered, (xvii) contains provisions covering the
payment of Prepayment Premium by the Mortgager for early prepayment of the
Mortgage Loan at least as favorable to the Trust as the Deleted Mortgage Loan,
(xviii) has a maturity date not later than the maturity date of the latest
maturing Mortgage Loan in the Mortgage Pool as of the Closing Date, (xix) has
the same Index as the Deleted Mortgage Loan, (xx) if originated on or after
November 27, 2003, is not a "high cost" loan subject to the New Jersey Home
Ownership Security Act of 2003 and (xxi) if originated on or after January 1,
2004 is not a "high-cost" loan subject to the New Mexico Home Loan Protection
Act. In the event that one or more mortgage loans are substituted for one or
more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall
be determined on the basis of aggregate Stated Principal Balances, the
Mortgage Rates described in clause (ii) hereof shall be determined on the
basis of weighted average Mortgage Rates, the risk gradings described in
clause (xii) hereof shall be satisfied as to each such mortgage loan, the
terms described in clause (viii) hereof shall be determined on the basis of
weighted average remaining term to maturity, the Loan-to-Value Ratios
described in clause (x) hereof shall be satisfied as to each such mortgage
loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xiv) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate,
as the case may be.
Rating Agency: Each of ▇▇▇▇▇'▇ and S&P.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
equal to (i) the unpaid principal balance of such Mortgage Loan as of the date
of liquidation, minus (ii) Liquidation Proceeds received, to the extent
allocable to principal, net of amounts that are reimbursable therefrom to the
Master Servicer or the Servicer with respect to such Mortgage Loan (other than
Advances of principal) including Liquidation Expenses. In determining whether
a Realized Loss is a Realized Loss of principal, Liquidation Proceeds shall be
allocated, first, to payment of Liquidation Expenses, then to accrued unpaid
interest and finally to reduce the principal balance of the Mortgage Loan.
Record Date: With respect to each Payment Date and each Class of Notes,
the Business Day prior to the related Payment Date, and with respect to any
Class of Definitive Notes, the last Business Day of the month immediately
preceding the month in which the Payment Date occurs (or, in the case of the
first Payment Date, the Closing Date).
Recovery: With respect to any Liquidated Mortgage Loan, an amount
received in respect of principal on such Mortgage Loan which has previously
been allocated as a Realized Loss to a Class or Classes of Notes net of
reimbursable expenses.
Redemption Date: The first Payment Date on which _____________________
is permitted to exercise its right to purchase the assets of the Trust
pursuant to Section 9.02 hereof.
Reference Banks: Leading banks selected by the Trust Administrator and
engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (1) with an
39
established place of business in London, (2) whose quotations appear on the
Reuters Screen LIBO Page or the Bloomberg Screen LIBO Page on the
Determination Date in question, (3) which have been designated as such by the
Trust Administrator and (4) not controlling, controlled by, or under common
control with, the Depositor, the Indenture Trustee, the Trust Administrator,
the Master Servicer, the Servicer, the Seller or any successor servicer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
REIT: A real estate investment trust within the meaning of section 856
of the Code.
Relevant UCC: The Uniform Commercial Code as in effect in the applicable
jurisdiction.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.02(p).
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed in lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Reportable Event: Any event required to be reported on Form 8-K, and in
any event, the following:
(a) entry into a definitive agreement related to the Trust Fund, the
Notes or the Mortgage Loans, or an amendment to an Operative Agreement, even
if the Depositor is not a party to such agreement (e.g., a servicing agreement
with a servicer contemplated by Item 1108(a)(3) of Regulation AB);
(b) termination of an Operative Agreement (other than by expiration of
the agreement on its stated termination date or as a result of all parties
completing their obligations under such agreement), even if the Depositor is
not a party to such agreement (e.g., a servicing agreement with a servicer
contemplated by Item 1108(a)(3) of Regulation AB);
(c) with respect to the Master Servicer only, if the Master Servicer
becomes aware of any bankruptcy or receivership with respect to the Seller,
the Depositor, the Master Servicer, the Servicer, any Subservicer, the Trust
Administrator, the Indenture Trustee, the Cap Counterparty, any enhancement or
support provider contemplated by Items 1114(b) or 1115 of Regulation AB, or
any other material party contemplated by Item 1101(d)(1) of Regulation AB;
(d) with respect to the Trust Administrator, the Master Servicer and
the Depositor only, the occurrence of an early amortization, performance
trigger or other event, including an event of default under this Agreement;
40
(e) any amendment to this Agreement;
(f) the resignation, removal, replacement, substitution of the Master
Servicer, the Servicer, any Subservicer, the Trust Administrator or the
Indenture Trustee;
(g) with respect to the Master Servicer and the Servicer only, if the
Master Servicer or the Servicer becomes aware that (i) any material
enhancement or support specified in Item 1114(a)(1) through (3) of Regulation
AB or Item 1115 of Regulation AB that was previously applicable regarding one
or more classes of the Notes has terminated other than by expiration of the
contract on its stated termination date or as a result of all parties
completing their obligations under such agreement; (ii) any material
enhancement specified in Item 1114(a)(1) through (3) of Regulation AB or Item
1115 of Regulation AB has been added with respect to one or more classes of
the Notes; or (iii) any existing material enhancement or support specified in
Item 1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB
with respect to one or more classes of the Notes has been materially amended
or modified; and
(h) with respect to the Trust Administrator, the Servicer, the Master
Servicer and the Depositor only, a required distribution to Holders of the
Notes is not made as of the required Payment Date under this Agreement.
Reporting Subcontractor: With respect to the Servicer, the Master
Servicer, the [Indenture Trustee], or the Trust Administrator, any
Subcontractor determined by such Person pursuant to Section 11.08(b) to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB. References to a Reporting Subcontractor shall refer only to the
Subcontractor of such Person and shall not refer to Subcontractors generally.
Reserve Interest Rate: The rate per annum that the Trust Administrator
determines to be either (1) the arithmetic mean (rounded upwards if necessary
to the nearest whole multiple of [0.03125]%) of the one-month United States
dollar lending rates which New York City banks selected by the Trust
Administrator are quoting on the relevant LIBOR Determination Date to the
principal London offices of leading banks in the London interbank market or,
(2) in the event that the Trust Administrator can determine no such arithmetic
mean, the lowest one-month United States dollar lending rate which New York
City banks selected by the Trust Administrator are quoting on such LIBOR
Determination Date to leading European banks.
Responsible Officer: Any vice president, any assistant vice president,
any assistant secretary, any associate, any assistant treasurer, or any other
officer of the Indenture Trustee or the Trust Administrator, as applicable,
customarily performing functions similar to those performed by any of the
above-designated officers and, in each case, having direct responsibility for
the administration of the Operative Agreements and also, with respect to a
particular matter, any other officer to whom such matter is referred because
of such officer's knowledge of and familiarity with the particular subject.
Reuters Screen LIBO Page: The display designated as page "LIBOR01" on
the Reuters Monitor Money Rates Service (or such other page as may replace the
LIBOR01 page on that service for the purpose of displaying London interbank
offered rates of major banks).
41
Rolling [Sixty-Day] Delinquency Rate: With respect to any Payment Date
on or after the Stepdown Date and any Pool or Pools, the average of the
[Sixty-Day] Delinquency Rates for such Pool or Pools and such Payment Date and
the two immediately preceding Payment Dates
Rolling Three Month Delinquency Rate: With respect to any Payment Date,
the average of the Delinquency Rates for each of the three (or one and two, in
the case of the first and second Payment Dates, respectively) immediately
preceding calendar months.
S&P: Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, Inc., or any successor in interest.
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification: As defined in Section 11.05.
Scheduled Payment: Each scheduled payment of principal and interest (or
of interest only, if applicable) to be paid by the Mortgagor on a Mortgage
Loan, as reduced (except where otherwise specified herein) by the amount of
any related Debt Service Reduction or pursuant to the Civil Relief Act
(excluding all amounts of principal and interest that were due on or before
the Cut-off Date whenever received) and, in the case of an REO Property, an
amount equivalent to the Scheduled Payment that would have been due on the
related Mortgage Loan if such Mortgage Loan had remained in existence.
Securities Act: The Securities Act of 1933, as amended
Securities Intermediary: The Person acting as Securities Intermediary
under this Agreement (which is ____________________), its successor in
interest, and any successor Securities Intermediary appointed pursuant to
Section 6.04.
Security Entitlement: The meaning specified in Section 8-102(a)(17) of
the New York UCC.
Seller: ____________________________.
[Seller Shortfall Interest Requirement: With respect to the Business
Day immediately preceding the Payment Date in each of ________ 200_, ________
200_ and ________ 200_, is the sum of:
(a) the product of: (1) the excess of the aggregate Stated Principal
Balances for such Payment Date of the Mortgage Loans (including the Subsequent
Mortgage Loans, if any) owned by the Trust Fund at the beginning of the
related Due Period, over the aggregate Stated Principal Balance for such
Payment Date have a scheduled payment of interest due in the related Due
Period, and (2) a fraction, the numerator of which is the weighted average Net
Mortgage Rate of such Mortgage Loans (including such Subsequent Mortgage
Loans, if any) (weighted on the basis of the Stated Principal Balances thereof
for such Payment Date) and the denominator of which is 12; and
(b) the lesser of:
42
(i) the product of: (1) the amount on deposit in the Pre-Funding
Account at the beginning of the related Due Period, and (2) a fraction, the
numerator of which is the weighted average Net Mortgage Rate of the Mortgage
Loans (including Subsequent Mortgage Loans, if any) owned by the Trust Fund at
the beginning of the related Due Period (weighted on the basis of the Stated
Principal Balances thereof for such Payment Date) and the denominator of which
is 12; and
(ii) the excess of (x) the sum of the amount of Current Interest
and Interest Carry Forward Amount due and payable on the interest-bearing
Notes and the [Class AF-5B] Premium, in each case for such Payment Date, over
(y) Interest Remittance Amount otherwise available to pay Current Interest and
the Interest Carry Forward Amount on the interest-bearing Notes for such
Payment Date (after giving effect to the addition of any amounts in clause (a)
of this definition of Seller Shortfall Interest Requirement to Interest
Remittance Amount for such Payment Date).
Senior Enhancement Percentage: For any Payment Date, the fraction,
expressed as a percentage, the numerator of which is the sum of the aggregate
Class Principal Amounts of the Subordinate Notes and the Overcollateralization
Amount (which, for purposes of this definition only, shall not be less than
zero) in each case after giving effect to payments on such Payment Date and
the denominator of which is the Aggregate Collateral Balance for such Payment
Date.
Senior Note: Any [Class AF-1A], [Class AF-1B], [Class AF-2], [Class
AF-3], [Class AF-4], [Class AF-5A], [Class AF-5B], [Class AF-6], [Class
2-AV-1], [Class 2-AV-2], [Class 3-AV-1], [Class 3-AV-2], [Class 3-AV-3] or
[Class 3-AV-4] Note.
Servicer: _________________________, or its successor in interest or
assigns or any successor to the Servicer under this Agreement as herein
provided.
Servicer Event of Default: Any one of the conditions or circumstances
enumerated in Section 4.07 with respect to the Servicer.
Servicer Remittance Date: The Business Day prior to each Payment Date,
commencing in _________ 200_.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Advances (including reasonable
attorneys' fees and disbursements) incurred in the performance by the Servicer
of its servicing obligations, including, but not limited to, the cost of (a)
the preservation, inspection, restoration and protection of the Mortgaged
Property, (b) any enforcement or administrative or judicial proceedings,
including foreclosures, (c) the management and liquidation of the Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage, (d) taxes, assessments, water rates, sewer rents and other charges
which are or may become a lien upon the Mortgaged Property and fire and hazard
insurance coverage and (e) any losses sustained by the Servicer with respect
to the liquidation of the Mortgaged Property. Notwithstanding anything to the
contrary herein, in the event the Servicer determines in its reasonable
judgment that a Servicing Advance is a Nonrecoverable Advance, the Servicer
shall be under no obligation to make such Servicing Advance.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB.
43
Servicing Fee: As to any Payment Date and each Mortgage Loan, an amount
equal to the product of (a) one-twelfth of the Servicing Fee Rate and (b) the
Stated Principal Balance of such Mortgage Loan as of the first day of the
related Collection Period.
Servicing Fee Rate: With respect to each Mortgage Loan, ___% per annum.
Servicing File: The items pertaining to a particular Mortgage Loan
including, but not limited to, the computer files, data disks, books, records,
data tapes, notes, and all additional documents generated as a result of or
utilized in originating and/or servicing each Mortgage Loan, which are held in
trust for the Indenture Trustee by the Servicer.
Servicing Officer: Any officer of the Servicer involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Master Servicer upon request, as such list may from time to time be amended.
Servicing Standard: The servicing and administration of the Mortgage
Loans for which the Servicer is responsible hereunder (a) in the same manner
in which, and with the same care, skill, prudence and diligence with which,
the Servicer generally services and administers similar mortgage loans with
similar mortgagors (i) for other third parties, giving due consideration to
customary and usual standards of practice of prudent institutional residential
mortgage lenders servicing their own loans or (ii) held in the Servicer's own
portfolio, (b) with a view to the maximization of the recovery on such
Mortgage Loans on a net present value basis and the best interests of the
Trust or any Person to which the Mortgage Loans may be transferred by the
Trust, (c) without regard to (i) any relationship that the Servicer or any
affiliate thereof may have with the related Mortgagor or any other party to
the transactions, (ii) the right of the Servicer to receive compensation or
other fees for its services rendered pursuant to this Agreement, (iii) the
obligation of the Servicer to make Servicing Advances, (iv) the ownership,
servicing or management by the Servicer or any affiliate thereof for others of
any other mortgage loans or mortgaged properties, and (v) any debt the
Servicer or any affiliate of the Servicer has extended to any mortgagor or any
affiliate of such mortgagor and (d) in accordance with the applicable state,
local and federal laws, rules and regulations.
Stated Principal Balance: With respect to any Payment Date, either (a)
in the case of any Mortgage Loan, the principal balance of such Mortgage Loan
at the close of business on the Cut-off Date after giving effect to principal
payments due on or before the Cut-off Date, whether or not received, less an
amount equal to principal payments due after the Cut-off Date and on or before
the Due Date in the related Collection Period, whether or not received from
the Mortgagor or advanced by any Servicer or the Master Servicer, and all
amounts allocable to unscheduled principal payments (including Principal
Prepayments, Liquidation Proceeds, Insurance Proceeds and condemnation
proceeds, in each case to the extent identified and applied prior to or during
the related Prepayment Period), provided that the Stated Principal Balance of
any Liquidated Mortgage Loan shall be zero and (b) in the case of any REO
Property, the Stated Principal Balance of the related Mortgage Loan on the Due
Date immediately preceding the date of acquisition of such REO Property by or
on behalf of the Indenture Trustee (reduced by any amount applied as a
reduction of principal on the related Mortgage Loan).
44
Stepdown Date: The later to occur of (1) the Payment Date in ________
200_ and (2) the first Payment Date on which on which the Senior Enhancement
Percentage (calculated for this purpose after giving effect to payments or
other recoveries in respect of the Mortgage Loans during the related
Collection Period, but before giving effect to payments on any Notes on such
Payment Date) is greater than or equal to _____%.
Stepdown Target Subordination Percentage: For any Class of Subordinate
Notes, the respective percentage indicated in the following table:
Stepdown Target
Subordination
Percentage
-----------------------
[MF-1] ____%
[MF-2] ____%
[MF-3] ____%
[MF-4] ____%
[MF-5] ____%
[MF-6] ____%
[MF-7] ____%
[MF-8] ____%
[BF] ____%
[MV-1] ____%
[MV-2] ____%
[MV-3] ____%
[MV-4] ____%
[MV-5] ____%
[MV-6] ____%
[MV-7] ____%
[MV-8] ____%
[BV] ____%
Stepup Date: The first Payment Date after the Payment Date on which the
Aggregate Collateral Balance is less than or equal to _____% of the sum of the
Aggregate Collateral Balance as of the Cut-off Date.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood
by participants in the mortgage-backed securities market) of Mortgage Loans
but performs one or more discrete functions identified in Item 1122(d) of
Regulation AB with respect to the Mortgage Loans under the direction or
authority of the Servicer, the Master Servicer, a Subservicer, the Trust
Administrator or the Indenture Trustee, as the case may be.
Subordinate Cap Agreement: The interest rate cap agreement transaction
evidenced by the related Confirmation (as assigned to the Trust pursuant to
the Cap Agreement Assignment Agreement), with respect to the Subordinate
Notes.
45
Subordinate Cap Agreement Payment Date: With respect to the
Subordinate Cap Agreement, the Business Day immediately preceding the related
Payment Date, beginning with the Payment Date in _________ 200_ and ending
with the Payment Date in __________ 200_.
Subordinate Note: Any [Class MF-1], [Class MF-2], [Class MF-3], [Class
MF-4], [Class MF-5], [Class MF-6], [Class MF-7], [Class MF-8], [Class BF],
[Class MV-1], [Class MV-2], [Class MV-3], [Class MV-4], [Class MV-5], [Class
MV-6], [Class MV-7], [Class MV-8] or [Class BV] Note.
Subordinate Priority: As defined in clause 6.02(d)(i).
Subsequent Deposit: With respect to any Subsequent Transfer Date, an
amount equal to the aggregate of all amounts in respect of (i) principal of
the related Subsequent Mortgage Loans due after the related Subsequent Cut-off
Date and received by the Master Servicer on or before such Subsequent Transfer
Date and not applied in computing the Cut-off Date Principal Balance thereof
and (ii) interest on the such Subsequent Mortgage Loans due after such
Subsequent Cut-off Date and received by the Master Servicer on or before the
Subsequent Transfer Date.
Subsequent Cut-off Date: As defined in the definition of Cut-off Date.
Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the Trustee on a
Subsequent Transfer Date, and listed on the related Loan Number and Borrower
Identification Mortgage Loan Schedule delivered pursuant to Section 2.01(f).
When used with respect to a single Subsequent Transfer Date, "Subsequent
Mortgage Loan" shall mean a Subsequent Mortgage Loan conveyed to the Trust
Administrator on such Subsequent Transfer Date.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit [P] hereto, executed and delivered by the
Issuer, the Depositor, the Master Servicer and the Trust Administrator as
provided in Section 2.01(d).
[Subsequent Transfer Date: For any Subsequent Transfer Agreement, the
"Subsequent Transfer Date" identified in such Subsequent Transfer Agreement;
provided, however, the Subsequent Transfer Date for any Subsequent Transfer
Agreement must be a Business Day and may not be a date earlier than the date
on which the Subsequent Transfer Agreement is executed and delivered by the
parties thereto pursuant to Section 2.01(d).]
[Subsequent Transfer Date Purchase Amount: With respect to any
Subsequent Transfer Date, the "Subsequent Transfer Date Purchase Amount"
identified in the related Subsequent Transfer Agreement which shall be an
estimate of the aggregate Stated Principal Balances of the Subsequent Mortgage
Loans identified in such Subsequent Transfer Agreement.]
[Subsequent Transfer Date Transfer Amount: With respect to any
Subsequent Transfer Date, an amount equal to the lesser of (i) the aggregate
Stated Principal Balances as of the related Subsequent Cut-off Dates of the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, as listed
on the related Loan Number and Borrower Identification Mortgage Loan Schedule
delivered pursuant to Section 2.01(f) and (ii) the amount on deposit in the
Pre-Funding Account.]
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Subservicer: Any servicer subservicing any Mortgage Loans pursuant to a
subservicing agreement. Such subservicing arrangement and the terms of the
related subservicing agreement must provide for the servicing of such Mortgage
Loans in a manner consistent with the servicing arrangements contemplated
hereunder.
Substitution Amount: The amount, if any, by which the Stated Principal
Balance of a Deleted Mortgage Loan exceeds the Stated Principal Balance of the
related Qualifying Substitute Mortgage Loan, or aggregate Stated Principal
Balance, if applicable, plus unpaid interest thereon, any related unpaid
Advances or Servicing Advances (including any interest on such unpaid Advances
or Servicing Advances), unpaid Servicing Fees and unpaid Master Servicing Fees
and the amount of any costs and damages incurred by the Trust Fund associated
with a violation of any applicable federal, state or local predatory or
abusive lending law in connection with the origination of such Deleted
Mortgage Loan.
Target Amount: With respect to any Payment Date, an amount equal to the
Aggregate Collateral Balance as of such Payment Date minus the Targeted
Overcollateralization Amount for such Payment Date.
Telerate Page 3750: The display currently so designated as "Page 3750"
on the Moneyline Telerate Service (or such other page selected by the Master
Servicer as may replace Page 3750 on that service for the purpose of
displaying daily comparable rates on prices).
Termination Price: The sum, as calculated by the Servicer, of (a) 100%
of the aggregate outstanding principal balance of the Mortgage Loans, plus
accrued interest thereon at the applicable Mortgage Rate, (b) any costs and
damages incurred by the Trust associated with a violation of any applicable
federal, state or local predatory or abusive lending law, (c) the fair market
value of the REO Property and all other property being purchased, (d) any
unreimbursed Servicing Advances, (e) any Basis Risk Shortfall and Unpaid Basis
Risk Shortfall amounts and (f) all other amounts to be paid or reimbursed to
the Master Servicer, the Trust Administrator, the Indenture Trustee, the Owner
Trustee and the Custodian.
Title Insurance Policy: A title insurance policy maintained with respect
to a Mortgage Loan.
Total Remittance Amount: With respect to any Payment Date, the sum of
(i) the Interest Remittance Amount for all Pools for such Payment Date and
(ii) Principal Remittance Amount for all Pools for such Payment Date.
Total Principal Deficiency Amount: With respect to any Payment Date, the
excess, if any, of the aggregate Class Principal Amount of the Notes after
giving effect to payments on such Payment Date over the Aggregate Collateral
Balance as of the last day of the related Collection Period.
Trust or Trust Fund: The Issuer.
Trust Account Property: The Trust Account, all amounts and investments
held from time to time in the Trust Account (whether in the form of deposit
accounts, physical property, book-
47
entry securities, uncertificated securities, securities entitlements,
investment property or otherwise) and all proceeds of the foregoing.
Trust Account: The Collection Account.
Trust Agreement: The trust agreement dated _______, 200_, between the
Depositor and the Owner Trustee, as amended and restated on _______, 200_,
among the Depositor, the Trust Administrator and the Owner Trustee, as such
may be amended or supplemented from time to time.
Trust Estate: The assets of the Issuer and pledged by the Issuer to the
Indenture Trustee under the Indenture, which assets consist of all accounts,
accounts receivable, contract rights, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of deposit,
goods, notes, drafts, letters of credit, advices of credit, investment
property, uncertificated securities and rights to payment of any and every
kind consisting of, arising from or relating to any of the following: (a) the
Mortgage Loans listed in the Mortgage Loan Schedule, and principal due and
payable after the Cut-off Date, but not including interest and principal due
and payable on any Mortgage Loans on or before the Cut-off Date, together with
the Mortgage Files relating to such Mortgage Loans; (b) any Insurance
Proceeds, REO Property, Liquidation Proceeds, REO Disposition Proceeds and
other recoveries (in each case, subject to clause (a) above), (c) the
Collection Account, any Custodial Account, any Escrow Account, the Interest
Rate Cap Account and all amounts deposited therein pursuant to the applicable
provisions of this Agreement, (d) any Insurance Policies, (e) the rights of
the Depositor under the Mortgage Loan Purchase Agreement, (f) the rights of
the Trust under each Interest Rate Cap Agreement and (g) all income, revenues,
issues, products, revisions, substitutions, replacements, profits, rents and
all cash and non-cash proceeds of the foregoing.
UCC: The Uniform Commercial Code as enacted in the relevant
jurisdiction.
Underwriters: _________________________________.
Unpaid Basis Risk Shortfall: With respect to any Payment Date and any
Class of Notes, the aggregate of all Basis Risk Shortfalls with respect to
such Class remaining unpaid from all previous Payment Dates, plus interest
accrued thereon at the applicable Note Interest Rate (calculated without
giving effect to the applicable Net Funds Cap).
Unpaid Realized Loss Amount: For the [Class 2-AV-2] Notes and any Class
of Subordinate Certificates and any Payment Date, (x) the portion of the
aggregate Applied Realized Loss Amount previously allocated to that Class
remaining unpaid from prior Payment Dates minus (y) any increase in the Note
Principal Amount of that Class due to the allocation of Recoveries to the Note
Principal Amount of that Class [P]ursuant to Section 6.02.
Voting Interests: The portion of the voting rights of all the Notes that
is allocated to any Note for purposes of the voting provisions of this
Agreement. At all times during the term of this Agreement, [99]% of all voting
rights will be allocated among the holders of the Notes as provided below. The
portion of such voting rights allocated to any Class of Notes will be based on
the fraction, expressed as a percentage, the numerator of which is the Class
Principal Amount of such Class as of the date of determination and the
denominator of which is the aggregate Class
48
Principal Amount of the Notes as of such date. At all times during the term of
the Indenture and this Agreement, the holders of the Ownership Certificate
will be allocated [1]% of the voting rights for so long as the Class remains
outstanding. The voting rights allocation to any Class of Notes or the
Ownership Certificate will be allocated among all holders of each such Class
or Ownership Certificate in proportion to their respective Note Principal
Amounts of such Notes or Percentage Interests of the Ownership Certificate.
Section 1.02. Calculations With Respect to the Mortgage Loans.
Calculations required to be made pursuant to this Agreement with respect to
any Mortgage Loan in the Trust Estate shall be made based upon current
information as to the terms of the Mortgage Loans and reports of payments
received from the Mortgagor on such Mortgage Loans provided by the Servicer to
the Master Servicer. Payments to be made by the Trust Administrator shall be
based on information provided by the Master Servicer. The Trust Administrator
shall not be required to recompute, verify or recalculate the information
supplied to it by the Master Servicer or the Servicer.
Section 1.03. Calculations With Respect to Accrued Interest. Accrued
interest, if any, on any Note shall be calculated based upon a 360-day year
and the actual number of days in each Accrual Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
Section 2.01. Creation and Declaration of Trust Estate; Conveyance of
Mortgage Loans.
(a) Mortgage Loans. As of the Closing Date, in consideration of the
Issuer's delivery of the Notes and the Ownership Certificate to the Depositor
or its designee, and concurrently with the execution and delivery of this
Agreement, the Depositor does hereby transfer, assign, set over, deposit with
and otherwise convey to the Issuer, without recourse, subject to Section 3.01,
in trust, all the right, title and interest of the Depositor in and to the
Mortgage Loans. Such conveyance includes, without limitation, the right to all
payments of principal and interest received on or with respect to the Mortgage
Loans on and after the Cut-off Date (other than payments of principal and
interest due on or before such date), and all such payments due after such
date but received prior to such date and intended by the related Mortgagors to
be applied after such date together with all of the Depositor's right, title
and interest in any REO Property and the proceeds thereof, the Depositor's
rights under any Insurance Policies related to the Mortgage Loans, the
Depositor's security interest in any collateral pledged to secure the Mortgage
Loans, including the Mortgaged Properties and any proceeds of the foregoing,
to have and to hold, in trust; and the Indenture Trustee declares that,
subject to the review provided for in Section 2.02, it has received and shall
hold the Trust Estate, as Indenture Trustee, in trust, for the benefit and use
of the Noteholders and for the purposes and subject to the terms and
conditions set forth in this Agreement, and, concurrently with such receipt,
the Issuer has issued and delivered the Notes and the Ownership Certificate to
or upon the order of the Depositor, in exchange for the Mortgage Loans and the
other property of the Trust Estate.
49
Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Issuer all of its rights and interest
under the Mortgage Loan Purchase Agreement but without delegation of any of
its obligations thereunder. The Issuer hereby accepts such assignment, and
shall be entitled to exercise all the rights of the Depositor under the
Mortgage Loan Purchase Agreement as if, for such purpose, it were the
Depositor. Upon the issuance of the Notes, ownership in the Trust Estate shall
be vested in the Issuer, subject to the lien created by the Indenture in favor
of the Indenture Trustee, for the benefit of the Noteholders. The foregoing
sale, transfer, assignment, set-over, deposit and conveyance does not and is
not intended to result in creation or assumption by the Indenture Trustee of
any obligation of the Depositor, the Seller, or any other Person in connection
with the Mortgage Loans or any other agreement or instrument relating thereto
except as specifically set forth herein.
The Depositor further agrees to cause ________________________ to assign
all of its right, title and interest in and to the interest rate corridor
transaction evidenced by each Confirmation to the Issuer, and all such right,
title and interest shall be deemed to have been assigned by
________________________ to the Depositor and by the Depositor to the Issuer.
(b) Subject to the execution and delivery of the related Subsequent
Transfer Agreement as provided by Section 2.01(d) and the terms and conditions
of this Agreement, the Depositor sells, transfers, assigns, sets over and
otherwise conveys to the Issuer, without recourse, on each Subsequent Transfer
Date, all the right, title and interest of the Depositor in and to the related
Subsequent Mortgage Loans, including all interest and principal received and
receivable by the Depositor on or with respect to such Subsequent Mortgage
Loans after the related Subsequent Cut-off Date (to the extent not applied in
computing the Cut-off Date Principal Balance thereof) or deposited into the
Collection Account by the Master Servicer on behalf of such Seller as part of
any related Subsequent Deposit as provided in this Agreement, other than
principal due on such Subsequent Mortgage Loans on or prior to the related
Subsequent Cut-off Date and interest accruing prior to the related Subsequent
Cut-off Date.
Immediately upon the conveyance of the Subsequent Mortgage Loans
referred to in the preceding paragraph, the Depositor sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for benefit of the
Noteholders and the [Class AF-5B] Insurer, without recourse, all right title
and interest in the Subsequent Mortgage Loans.
(c) The Depositor has entered into this Agreement in consideration for
the purchase of the Mortgage Loans by the Issuer and has agreed to take the
actions specified herein.
(d) On any Business Day during the Funding Period designated by the
[Depositor] to the Issuer, the Depositor and trust Administrator shall
complete, execute and deliver a Subsequent Transfer Agreement. After the
execution and delivery of such Subsequent Transfer Agreement, on the
Subsequent Transfer Date, the Trust Administrator shall set aside in the
Pre-Funding Account an amount equal to the related Subsequent Transfer Date
Purchase Amount.
(e) The transfer of Subsequent Mortgage Loans on the Subsequent
Transfer Date is subject to the satisfaction of each of the following
conditions:
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(1) the Trust Administrator and the Underwriters will be provided
Opinions of Counsel addressed to the Rating Agencies as with respect to
the sale of the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date (such opinions being substantially similar to the opinions
delivered on the Closing Date to the Rating Agencies with respect to the
sale of the Initial Mortgage Loans on the Closing Date), to be delivered
as provided in Section 2.01(f);
(2) the execution and delivery of such Subsequent Transfer
Agreement or conveyance of the related Subsequent Mortgage Loans does
not result in a reduction or withdrawal of the any ratings assigned to
the Notes by the Ratings Agencies (without regard to the [Class AF-5B]
Policy, in the case of the [Class AF-5B] Notes);
(3) the Depositor shall deliver to the Trust Administrator an
Officer's Certificate confirming the satisfaction of each of the
conditions set forth in this Section 2.01(e) required to be satisfied by
such Subsequent Transfer Date;
(4) each Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date satisfies the representations and warranties applicable to
it under this Agreement, provided, however, that with respect to a
breach of a representation and warranty with respect to a Subsequent
Mortgage Loan set forth in this clause (4), the obligation under this
Agreement of the applicable Seller, to cure, repurchase or replace such
Subsequent Mortgage Loan shall constitute the sole remedy against such
Seller respecting such breach available to Noteholders, the Depositor or
the Trust Administrator;
(5) the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date were selected in a manner reasonably believed not to be
adverse to the interests of the Noteholders;
(6) no Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date was [30] or more days delinquent;
(7) following the conveyance of the Subsequent Mortgage Loans on
such Subsequent Transfer Date, the characteristics of each Pool will not
vary by more than the amount specified below (other than the percentage
of Mortgage Loans secured by Mortgaged Properties located in the State
of California, which will not exceed [50]% of the Mortgage Pool and the
percentage of mortgage loans in the Credit Grade Categories of "C" or
below, which will not exceed [10]% of the Mortgage Loans in each Pool)
from the characteristics listed below; provided that for the purpose of
making such calculations, the characteristics for any Initial Mortgage
Loan made will be taken as of the Initial Cut-off Date and the
characteristics for any Subsequent Mortgage Loans will be taken as of
the Subsequent Cut-off Date; and
[Pool 1]
Permitted
Variance or
Characteristic Value Range
-------------------------- ---------------- -----------------
Average Stated Principal Balance...................... $______ __%
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Weighted Average Mortgage Rate........................ _____% ____%
Weighted Average Original Loan-to-Value Ratio......... _____% _%
Weighted Average Remaining Term to Maturity........... ___ months _ months
Weighted Average Credit Bureau Risk Score............. ___ points _ points
[Pool 2]
Permitted
Variance or
Characteristic Value Range
-------------------------- ---------------- -----------------
Average Stated Principal Balance...................... $______ ____%
Weighted Average Mortgage Rate........................ _____% ____%
Weighted Average Original Loan-to-Value Ratio......... _____% ____%
Weighted Average Remaining Term to Maturity........... ___ months _ months
Weighted Average Credit Bureau Risk Score............. ___ points _ points
[Pool 3]
Permitted
Variance or
Characteristic Value Range
-------------------------- ---------------- -----------------
Average Stated Principal Balance...................... $______ ____%
Weighted Average Mortgage Rate........................ _____% ____%
Weighted Average Original Loan-to-Value Ratio......... _____% ____%
Weighted Average Remaining Term to Maturity........... ___ months _ months
Weighted Average Credit Bureau Risk Score............. ___ points _ points
(8) none of the Sellers or the Depositor is insolvent and neither
of the Sellers nor the Depositor will be rendered insolvent by the
conveyance of Subsequent Mortgage Loans on such Subsequent Transfer
Date.
The Trustee shall not be required to investigate or otherwise verify
compliance with these conditions, except for its own receipt of documents
specified above, and shall be entitled to rely on the required Officer's
Certificate.
(f) Within [six] Business Days after each Subsequent Transfer Date, upon
(1) delivery to the Trustee by the Depositor of the Opinions of Counsel
referred to in Section 2.01(e)(1) and (e)(9), (2) delivery to the Trustee by
the [Depositor] (on behalf of each Seller) of a Loan Number and Borrower
Identification Mortgage Loan Schedule reflecting the Subsequent Mortgage Loans
conveyed on such Subsequent Transfer Date and the Mortgage Pool into which
each Subsequent Mortgage Loan was conveyed, (3) deposit in the Collection
Account by the Master Servicer on behalf of the Sellers of the applicable
Subsequent Deposit, and (4) delivery to the Trust Administrator by the
Depositor of an Officer's Certificate confirming the satisfaction of each of
the conditions precedent set forth in this Section 2.01(f), the Trustee shall
pay the Depositor the Subsequent Transfer Date Transfer Amount from such funds
that were set aside in the Pre-Funding Account pursuant to Section 2.01(d).
The positive difference, if any, between the Subsequent Transfer Date Transfer
Amount and the Subsequent Transfer Date Purchase Amount shall be re-invested
by the Trust Administrator in the Pre-Funding Account.
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The Trustee shall not be required to investigate or otherwise verify
compliance with the conditions set forth in the preceding paragraph, except
for its own receipt of documents specified above, and shall be entitled to
rely on the required Officer's Certificate.
Within [thirty] days after each Subsequent Transfer Date, the Depositor
shall deliver to the Trustee a letter of a nationally recognized firm of
independent public accountants stating whether or not the Subsequent Mortgage
Loans conveyed on such Subsequent Transfer Date conform to the characteristics
described in Section 2.01(e)(6) and (7).
(g) In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, or cause to be delivered to and deposited
with, the Indenture Trustee, and/or the Custodian acting on the Indenture
Trustee's behalf, the following documents or instruments with respect to each
Mortgage Loan (each a "Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed either (A) in blank or
(B) in the form of the Form of Endorsement set forth in Exhibit A-4
hereto (or Exhibit B-6 to the Custodial Agreement), or with respect to
any lost Mortgage Note, an original Lost Note Affidavit, in the form set
forth in Exhibit C hereto (or Exhibit B-5 to the Custodial Agreement),
stating that the original Mortgage Note was lost, misplaced or
destroyed, together with a copy of the related Mortgage Note;
(ii) the original of any guarantee executed in connection with the
Mortgage Note, assigned to the Indenture Trustee;
(iii) the original Mortgage with evidence of recording thereon,
and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording
thereon or, if such Mortgage or power of attorney has been submitted for
recording but has not been returned from the applicable public recording
office, has been lost or is not otherwise available, a copy of such
Mortgage or power of attorney, as the case may be, certified by an
Officer's Certificate of the Depositor to be a true and complete copy of
the original submitted for recording;
(iv) with respect to each Non-MERS Mortgage Loan, an original
Assignment of Mortgage, in form and substance acceptable for recording.
The Mortgage shall be assigned either (A) in blank, without recourse, or
(B) so long as ____________________________________ is the Indenture
Trustee, to "____________________________________, as Indenture Trustee
of the ______ Mortgage Investment Trust 200_-__", without recourse or
(C) to the order of the Indenture Trustee;
(v) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments or, in the case of an
intervening assignment that has been lost, a written Opinion of Counsel
for the Seller that such original intervening assignment is not required
to enforce the Indenture Trustee's interest in the Mortgage Loans;
(vi) the original or a certified copy of lender's title insurance
policy (or, in lieu thereof, a commitment to issue such title insurance
policy, with an original or a certified
53
copy of such title insurance policy to follow as soon after the Closing
Date as reasonably practicable) or attorney's opinion of title and
abstract of title;
(vii) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, or as to any such
agreement which cannot be delivered prior to the Closing Date because of
a delay caused by the public recording office where such assumption,
modification or substitution agreement has been delivered for
recordation, a photocopy of such assumption, modification or
substitution agreement, pending delivery of the original thereof,
together with an Officer's Certificate of the Depositor certifying that
the copy of such assumption, modification or substitution agreement
delivered to the Custodian is a true copy and that the original of such
agreement has been forwarded to the public recording office; and
(viii) the original of any security agreement or equivalent
instrument executed in connection with the Mortgage or as to any
security agreement or equivalent instrument that cannot be delivered on
or prior to the Closing Date because of a delay caused by the public
recording office where such document has been delivered for recordation,
a photocopy of such document, pending delivery of the original thereof,
together with an Officer's Certificate of the Depositor certifying that
the copy of such security agreement, chattel mortgage or their
equivalent delivered to the Custodian is a true copy and that the
original of such document has been forwarded to the public recording
office.
The Depositor and the Seller acknowledge and agree that the form of
endorsement attached hereto as Exhibit A-4 is intended to effect the transfer
to the Indenture Trustee, for the benefit of the Noteholders, of the Mortgage
Notes and the Mortgages.
(h) Assignments of Mortgage with respect to each Non-MERS Mortgage Loan
shall be recorded; provided, however, that such Assignments need not be
recorded if, on or prior to the Closing Date, the Seller delivers an Opinion
of Counsel (which must be Independent counsel) acceptable to the Rating
Agencies, to the effect that recording in such states is not required to
protect the Indenture Trustee's interest in the related Non-MERS Mortgage
Loans.
(i) In instances where a Title Insurance Policy is required to be
delivered to the Indenture Trustee or the Custodian on behalf of the Indenture
Trustee under clause (b)(vi) above and is not so delivered, the Seller will
provide a copy of such Title Insurance Policy to the Indenture Trustee, or to
the Custodian on behalf of the Indenture Trustee, as promptly as practicable
after the execution and delivery hereof, but in any case within [180] days of
the Closing Date.
(j) For Mortgage Loans (if any) that 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, herewith delivers to the Indenture Trustee, or
to the Custodian on behalf of the Indenture Trustee, an Officer's Certificate
which shall include a statement to the effect that all amounts received in
connection with such prepayment that are required to be deposited in the
Collection Account pursuant to Section 5.07 have been so deposited. All
original documents that are not delivered to the Indenture Trustee or the
Custodian on behalf of the Indenture Trustee shall be held by the Servicer in
trust for the benefit of the Indenture Trustee and the Noteholders.
54
Section 2.02. Acceptance of Trust Estate; Review of Documentation.
(a) Subject to the provisions of Section 2.01, the Issuer acknowledges
receipt of the assets transferred by the Depositor of the assets included in
the Trust Estate and has directed that the documents referred to in Section
2.01 and all other assets included in the definition of "Trust Estate" be
delivered to the Indenture Trustee (or the Custodian) on its behalf.
The Indenture Trustee, by execution and delivery hereof, acknowledges
receipt by it or by the applicable Custodian on its behalf of the Mortgage
Files pertaining to the Mortgage Loans listed on the Mortgage Loan Schedule,
subject to review thereof by the Indenture Trustee, or by the Custodian on
behalf of the Indenture Trustee, under this Section 2.02. The Indenture
Trustee, or the Custodian on behalf of the Indenture Trustee, will execute and
deliver to the Depositor, the Master Servicer, the Servicer (and the Indenture
Trustee if delivered by the Custodian) on the Closing Date an Initial
Certification in the form annexed hereto as Exhibit A-1 (or in the form
annexed to the Custodial Agreement as Exhibit B-1, as applicable).
(b) Within [45] days after the Closing Date with respect to the Initial
Mortgage Loans and within [90] days after the Subsequent Transfer Date with
respect to the Subsequent Mortgage Loans, the Indenture Trustee or the
Custodian on behalf of the Indenture Trustee, will, for the benefit of
Noteholders, review each Mortgage File to ascertain that all required
documents set forth in Section 2.01 have been received and appear on their
face to contain the requisite signatures by or on behalf of the respective
parties thereto, and shall deliver to the Depositor, the Master Servicer and
the Servicer (and the Indenture Trustee if delivered by the Custodian) an
Interim Certification in the form annexed hereto as Exhibit A-2 (or in the
form annexed to the Custodial Agreement as Exhibit B-2, as applicable) to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan prepaid in full or any specifically identified
in such certification as not covered by such certification), (i) all of the
applicable documents specified in Section 2.01(b) are in its possession and
(ii) such documents have been reviewed by it and appear to relate to such
Mortgage Loan. The Indenture Trustee, or the Custodian on behalf of the
Indenture Trustee, shall determine whether such documents are executed and
endorsed, but shall be under no duty or obligation to inspect, review or
examine any such documents, instruments, certificates or other papers to
determine that the same are valid, binding, legally effective, properly
endorsed, genuine, enforceable or appropriate for the represented purpose or
that they have actually been recorded or are in recordable form or that they
are other than what they purport to be on their face. Neither the Indenture
Trustee nor the Custodian shall have any responsibility for verifying the
genuineness or the legal effectiveness of or authority for any signatures of
or on behalf of any party or endorser or for the perfection or priority of any
document.
(c) If in the course of the review described in paragraph (b) above the
Indenture Trustee or the Custodian discovers any document or documents
constituting a part of a Mortgage File that is missing, does not appear
regular on its face (i.e., is mutilated, damaged, defaced, torn or otherwise
physically altered) or appears to be unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule, as applicable (each, a "Material
Defect"), the Indenture Trustee, or the Custodian on behalf of the Indenture
Trustee, discovering such Material Defect shall identify the Mortgage Loan to
which such Material Defect relates in the Interim Certification delivered to
the Depositor and the Master Servicer. Within [90] days of its receipt of such
notice, the Seller
55
shall be required to cure such Material Defect (and, in such event, the Seller
shall provide the Indenture Trustee with an Officer's Certificate confirming
that such cure has been effected). If the Seller does not so cure such
Material Defect, if a loss has been incurred with respect to such Mortgage
Loan that would, if such Mortgage Loan were not purchased from the Trust
Estate, constitute a Realized Loss, and such loss is attributable to the
failure of the Seller to cure such Material Defect, the Seller shall
repurchase the related Mortgage Loan from the Trust Estate at the Purchase
Price. A loss shall be deemed to be attributable to the failure of the Seller
to cure a Material Defect if, as determined by the Seller acting in good
faith, absent such Material Defect, such loss would not have been incurred.
The Seller may, in lieu of repurchasing a Mortgage Loan pursuant to this
Section 2.02, substitute for such Mortgage Loan a Qualifying Substitute
Mortgage Loan subject to the provisions of Section 3.03. The failure of the
Indenture Trustee or the Custodian to deliver the Interim Certification within
[45] days after the Closing Date or [90] days after the Subsequent transfer
Date shall not affect or relieve the Seller of its obligation to repurchase
any Mortgage Loan pursuant to this Section 2.02 or any other Section of this
Agreement requiring the repurchase of Mortgage Loans from the Trust Estate.
(d) Within [180] days following the Closing Date with respect to the
Initial Mortgage Loans and within [180] days following the Subsequent Transfer
Date with respect to the Subsequent Mortgage Loans, the Indenture Trustee, or
the Custodian, shall deliver to the Depositor, the Master Servicer and the
Servicer (and the Indenture Trustee if delivered by the Custodian) a Final
Certification substantially in the form attached as Exhibit A-3 (or in the
form annexed to the Custodial Agreement as Exhibit B-3, as applicable)
evidencing the completeness of the Mortgage Files in its possession or
control, with any exceptions noted thereto.
(e) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Estate, the Indenture Trustee, the Custodian or the
Noteholders of any unsatisfied duty, claim or other liability on any Mortgage
Loan or to any Mortgagor.
(f) Notwithstanding anything to the contrary contained herein, each of
the parties hereto acknowledges that the Custodian shall perform the
applicable review of the Mortgage Loans and respective certifications thereof
as provided in the Custodial Agreement.
(g) Upon execution of this Agreement, the Depositor hereby delivers to
the Indenture Trustee and the Indenture Trustee acknowledges a receipt of the
Mortgage Loan Purchase Agreement.
(h) For purposes of the determinations required to be made by the
Indenture Trustee or the Custodian pursuant to paragraphs (a) through (d) of
this Section 2.02, the Indenture Trustee or the Custodian, as applicable,
shall be entitled to conclusively rely upon the diskette, tape or other
electronic media provided by or on behalf of the Seller with respect to the
Mortgage Loans as to whether (i) any guarantee was executed in connection with
any Mortgage Loan, (ii) any assumption, modification or substitution agreement
was executed in connection with any Mortgage Loan, (iii) primary mortgage
guaranty insurance is required with respect to any Mortgage Loan or (iv) any
security agreement or equivalent instrument was executed in connection with
any Mortgage Loan.
Section 2.03. Grant Clause.
56
(a) It is intended that the conveyance by the Depositor to the Issuer of
the Mortgage Loans, as provided for in Section 2.01, be construed as a sale by
the Depositor to the Issuer of the Mortgage Loans and other assets in the
Trust Estate for the benefit of the Noteholders. Further, it is not intended
that any such conveyance be deemed to be a pledge of the Mortgage Loans by the
Depositor to the Issuer to secure a debt or other obligation of the Depositor.
However, in the event that the Mortgage Loans are held to be property of the
Depositor or if for any reason this Agreement is held or deemed to create a
security interest in the Mortgage Loans and other assets in the Trust Estate,
then it is intended that (a) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York UCC
(or the Relevant UCC if not the New York UCC); (b) the conveyances provided
for in Section 2.01 shall be deemed to be (1) a grant by the Depositor to the
Issuer of a security interest in all of the Depositor's right (including the
power to convey title thereto), title and interest, whether now owned or
hereafter acquired, in and to (A) the Mortgage Loans, including the Mortgage
Notes, the Mortgages, any related insurance policies and all other documents
in the related Mortgage Files, (B) all amounts payable pursuant to the
Mortgage Loans in accordance with the terms thereof and (C) any and all
general intangibles consisting of, arising from or relating to any of the
foregoing, and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all Liquidation Proceeds, all Insurance Proceeds, all
amounts from time to time held or invested in the Collection Account, whether
in the form of cash, instruments, securities or other property and (2) an
assignment by the Depositor to the Issuer of any security interest in any and
all of the Depositor's right (including the power to convey title thereto),
title and interest, whether now owned or hereafter acquired, in and to the
property described in the foregoing clauses (1)(A) through (C); (c) the
possession by the Indenture Trustee or any other agent of the Issuer 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," or possession by a purchaser or a person designated by
such secured party, for purposes of perfecting the security interest pursuant
to the New York UCC and any other Relevant UCC (including, without limitation,
Section 9-313, 8-313 or 8-321 thereof); 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 Issuer for the purpose of perfecting
such security interest under applicable law.
(b) The Depositor and, at the Depositor's direction, the Issuer shall,
to the extent consistent with this Agreement, take such reasonable actions as
may be necessary to ensure that, if this Agreement were deemed to create a
security interest in the Mortgage Loans and the other property of the Trust
Estate, 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 this Agreement. Without limiting the generality of the
foregoing, the Depositor shall prepare and file any UCC financing statements
that are necessary to perfect the Indenture Trustee's security interest in or
lien on the Mortgage Loans, as evidenced by an Officer's Certificate of the
Depositor, and furnish a copy of each such filed financing statement to the
Trust Administrator. The Trust Administrator shall prepare and file, at the
expense of the Issuer, all filings necessary to maintain the effectiveness of
any original filings necessary under the Relevant UCC to perfect the Indenture
Trustee's security interest in or lien on the Mortgage Loans, including
without limitation (x) continuation statements, and (y) to the extent that a
Responsible Officer of the
57
Trust Administrator has received written notice of such change or transfer,
such other statements as may be occasioned by (1) any change of name of the
Seller, the Depositor or the Issuer, (2) any change of location of the place
of business or the chief executive office of the Seller or the Depositor or
(3) any transfer of any interest of the Seller or the Depositor in any
Mortgage Loan.
Neither the Depositor nor the Issuer shall organize under the law of any
jurisdiction other than the State under which each is organized as of the
Closing Date (whether changing its jurisdiction of organization or organizing
under an additional jurisdiction) without giving [30] days' prior written
notice of such action to its immediate and mediate transferee, including the
Indenture Trustee. Before effecting such change, each of the Depositor or the
Issuer proposing to change its jurisdiction of organization shall prepare and
file in the appropriate filing office any financing statements or other
statements necessary to continue the perfection of the interests of its
immediate and mediate transferees, including the Indenture Trustee, in the
Mortgage Loans. In connection with the transactions contemplated by this
Agreement and the Indenture, each of the Depositor and the Issuer authorizes
its immediate or mediate transferee to file in any filing office any initial
financing statements, any amendments to financing statements, any continuation
statements, or any other statements or filings described in this Section
2.03(b).
(c) The Depositor shall not take any action inconsistent with the sale
by the Depositor of all of its right, title and interest in and to the Trust
Estate and shall indicate or shall cause to be indicated in its records and
records held on its behalf that ownership of each Mortgage Loan and the other
property of the Issuer is held by the Issuer. In addition, the Depositor shall
respond to any inquiries from third parties with respect to ownership of a
Mortgage Loan or any other property of the Trust Estate by stating that it is
not the owner of such Mortgage Loan and that ownership of such Mortgage Loan
or other property of the Trust Estate is held by the Issuer on behalf of the
Noteholders.
Section 2.04. Option to Contribute Derivative Instrument.
At any time on or after the Closing Date, the Seller shall have the
right to contribute to, and deposit into, the Trust a derivative contract or
comparable instrument (a "Derivative Instrument"). The Derivative Instrument
may have a notional amount in excess of the sum of the beneficial interests in
the Trust. Any such instrument shall constitute a fully prepaid agreement. The
Trust Administrator shall have no tax reporting duties with respect to any
such Derivative Instrument.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the Depositor and the
Seller.
(a) The Depositor hereby represents and warrants to the Issuer, the
Indenture Trustee for the benefit of Noteholders, the Trust Administrator, the
Master Servicer, the Seller and the Servicer as of the Closing Date or such
other date as is specified, that:
(i) This Agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as
58
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights in general and
except as such enforceability may be limited by general principles of
equity (whether considered in a proceeding at law or in equity);
(ii) Immediately prior to the transfer by the Depositor to the
Trust Estate of each Mortgage Loan, the Depositor had good and equitable
title to each Mortgage Loan (insofar as such title was conveyed to it by
the Seller) subject to no prior lien, claim, participation interest,
mortgage, security interest, pledge, charge or other encumbrance or
other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title and interest in the Initial Mortgage Loans to the Trust
Estate;
(iv) As of the Subsequent Transfer Date, the Depositor has
transferred all right, title and interest in the Subsequent Mortgage
Loans to the Trust Estate
(v) The Depositor has not transferred the Mortgage Loans to the
Trust Estate with any intent to hinder, delay or defraud any of its
creditors;
(vi) The Depositor has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with full power and authority to own its assets and conduct
its business as presently being conducted; and
(b) The Seller hereby represents and warrants to the Issuer, the
Indenture Trustee for the benefit of Noteholders, the Trust Administrator, the
Master Servicer and the Depositor as of the Closing Date or such other date as
is specified, that:
(i) the Seller is a ______________, duly organized validly
existing and in good standing under the laws of the _____________, and
has the corporate power to own its assets and to transact the business
in which it is currently engaged. The Seller is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or
any properties owned or leased by it requires such qualification and in
which the failure so to qualify would have a material adverse effect on
the business, properties, assets, or condition (financial or other) of
the Seller;
(ii) the Seller has the corporate power and authority to make,
execute, deliver and perform this Agreement and all of the transactions
contemplated under the Agreement, and has taken all necessary corporate
action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute
the legal, valid and binding obligation of the Seller enforceable in
accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies;
(iii) the Seller is not required to obtain the consent of any
other party or any consent, license, approval or authorization from, or
registration or declaration with, any
59
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization,
or registration or declaration, as shall have been obtained or filed, as
the case may be, prior to the Closing Date;
(iv) the execution, delivery and performance of this Agreement by
the Seller will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the Seller
or any provision of the articles of incorporation or bylaws of the
Seller, or constitute a material breach of any mortgage, indenture,
contract or other agreement to which the Seller is a party or by which
the Seller may be bound;
(v) no litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the
knowledge of the Seller threatened, against the Seller or any of its
properties or with respect to this Agreement which in the opinion of the
Seller has a reasonable likelihood of resulting in a material adverse
effect on the transactions contemplated by this Agreement; and
(vi) [the Seller has been organized in conformity with the
requirements for qualification as a REIT; the Seller has filed an
election to be treated as a REIT for federal income tax purposes; and
the Seller currently qualifies as, and it proposes to operate in a
manner that will enable it to continue to qualify as, a REIT.]
(c) The Seller hereby represents and warrants to the Issuer, the
Indenture Trustee for the benefit of Noteholders, the Trust Administrator, the
Master Servicer and the Depositor as of the Closing Date with respect to the
Initial Mortgage Loans and the Subsequent Transfer Date with respect to the
Subsequent Transfer Date or such other date as is specified, with respect to
the Mortgage Loans, the representations and warranties set forth in Schedule
II of the Mortgage Loan Purchase Agreement.
(d) To the extent that any fact, condition or event with respect to a
Mortgage Loan constitutes a breach of a representation or warranty of the
Seller under subsection (c) above or the Mortgage Loan Purchase Agreement, the
only right or remedy of the Indenture Trustee or any Certificateholder
hereunder shall be their rights to enforce the obligations of the Seller under
any applicable representation or warranty made by it. The Indenture Trustee on
behalf of the Issuer acknowledges that the Depositor shall have no obligation
or liability with respect to any breach of any representation or warranty with
respect to the Mortgage Loans (except as set forth in Section 3.01(a)(ii))
under any circumstances.
Section 3.02. Discovery of Breach. It is understood and agreed that the
representations and warranties (i) of the Depositor set forth in Section
3.01(a), (ii) of the Seller set forth in Section 3.01(b) and (c) and (iii) of
the Servicer pursuant to Section 4.05 of this Agreement, shall each survive
delivery of the Mortgage Files and the Assignment of Mortgage of each Mortgage
Loan to the Indenture Trustee and shall continue throughout the term of this
Agreement. With respect to the representations and warranties which are made
to the best of the Seller's knowledge, if it is discovered by the Depositor,
the Seller, the Trust Administrator, the Indenture Trustee, the Master
Servicer, the Underwriters or the Servicer that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects
60
the value of the Mortgage Loans or the interests of the Noteholders or the
Indenture Trustee therein, notwithstanding such Seller's lack of knowledge
with respect to the substance of such representation or warranty, remedies for
breach will apply to such inaccuracy. Any breach of the representation and
warranty set forth in clauses (g), (ss), (tt) and (vv) of Schedule II of the
Mortgage Loan Purchase Agreement shall be deemed to materially and adversely
affect the interest of the Trust in that Mortgage Loan, notwithstanding the
Seller's lack of knowledge with respect to the substance of such
representation and warranty. Upon discovery by any of the Depositor, the
Master Servicer, the Trust Administrator or the Indenture Trustee of a breach
of any of such representations and warranties made by the Seller that
adversely and materially affects the value of the related Mortgage Loan, the
party discovering such breach shall give prompt written notice to the other
parties. Within [60] days of the discovery by the Seller of a breach of any
representation or warranty given to the Indenture Trustee by the Seller or the
Seller's receipt of written notice of such a breach, the Seller shall either
(a) cure such breach in all material respects, (b) repurchase such Mortgage
Loan or any property acquired in respect thereof from the Indenture Trustee at
the Purchase Price or (c) substitute a Qualifying Substitute Mortgage Loan for
the affected Mortgage Loan.
Section 3.03. Repurchase, Purchase or Substitution of Mortgage Loans.
(a) With respect to any Mortgage Loan repurchased by the Seller pursuant
to Section 3.02(b) of this Agreement, the principal portion of the funds in
respect of such repurchase of a Mortgage Loan will be considered a Principal
Prepayment and the Purchase Price shall be deposited in the Collection
Account. Upon receipt by the Trust Administrator of the full amount of the
Purchase Price for a Deleted Mortgage Loan and notification thereof has been
made to the Indenture Trustee, or upon receipt of notification from the
Custodian that it had received the Mortgage File for a Qualifying Substitute
Mortgage Loan substituted for a Deleted Mortgage Loan (and any applicable
Substitution Amount), the Indenture Trustee shall release or cause to be
released and reassign to the Depositor or the Seller, as applicable, the
related Mortgage File for the Deleted Mortgage Loan and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as shall be necessary to vest in such
party or its designee or assignee title to any Deleted Mortgage Loan released
pursuant hereto, free and clear of all security interests, liens and other
encumbrances created by this Agreement and the Indenture, which instruments
shall be prepared by the Servicer and the Indenture Trustee shall have no
further responsibility with respect to the Mortgage File relating to such
Deleted Mortgage Loan.
(b) With respect to each Qualifying Substitute Mortgage Loan to be
delivered to the Indenture Trustee (or its custodian) in exchange for a
Deleted Mortgage Loan: (i) the Depositor or the Seller, as applicable, must
deliver to the Indenture Trustee (or a Custodian) the Mortgage File for the
Qualifying Substitute Mortgage Loan containing the documents set forth in
Section 2.01(b) along with a written certification certifying as to the
delivery of such Mortgage File and containing the granting language set forth
in Section 2.01(a); and (ii) the Seller and the Depositor will be deemed to
have made, with respect to such Qualifying Substitute Mortgage Loan, each of
the representations and warranties made by it with respect to the related
Deleted Mortgage Loan. As soon as practicable after the delivery of any
Qualifying Substitute Mortgage Loan hereunder, the Indenture Trustee, at the
expense of the Depositor and at the direction and with the cooperation of the
Servicer shall (i) with respect to a Qualifying Substitute Mortgage Loan that
is
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a Non-MERS Mortgage Loan, cause the Assignment of Mortgage to be recorded by
the Servicer if required pursuant to Section 2.01(c), or (ii) with respect to
a Qualifying Substitute Mortgage Loan that is a MERS Mortgage Loan, cause to
be taken such actions as are necessary to cause the Indenture Trustee (on
behalf of the Issuer) to be clearly identified as the owner of each such
Mortgage Loan on the records of MERS if required pursuant to Section 2.01(c).
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE
MORTGAGE LOANS BY THE SERVICER
Section 4.01. Seller's Engagement of Servicer to Perform Servicing
Responsibilities.
(a) Contract for Servicing; Possession of Servicing Files. The Seller,
as the owner of the servicing rights, by execution and delivery of this
Agreement, does hereby contract with the Servicer for the servicing of the
Mortgage Loans for the benefit of the Issuer and the Indenture Trustee. The
Servicer shall maintain a Servicing File with respect to each Mortgage Loan in
order to service such Mortgage Loans pursuant to this Agreement and each
Servicing File delivered to the Servicer shall be held in trust by the
Servicer for the benefit of the Issuer and the Indenture Trustee; provided,
however, that the Servicer shall not have any liability for any Servicing
Files (or portions thereof) not delivered by the Seller. The Servicer's
possession of any portion of the Mortgage Loan documents shall be at the will
of the Indenture Trustee for the sole purpose of facilitating servicing of the
related Mortgage Loan pursuant to this Agreement, and such retention and
possession by the Servicer shall be in a custodial capacity only. The
ownership of each Mortgage Note, Mortgage, and the contents of the Servicing
File shall be vested in the Indenture Trustee and the ownership of all records
and documents with respect to the related Mortgage Loan prepared by or which
come into the possession of the Servicer shall immediately vest in the
Indenture Trustee and shall be retained and maintained, in trust, by the
Servicer at the will of the Indenture Trustee in such custodial capacity only.
The Servicing File retained by the Servicer pursuant to this Agreement shall
be identified in accordance with the Servicer's file tracking system to
reflect the ownership of the related Mortgage Loan by the Indenture Trustee.
The Servicer shall release from its custody the contents of any Servicing File
retained by it only in accordance with this Agreement.
(b) Books and Records. All rights arising out of the Mortgage Loans
shall be vested in the Indenture Trustee, subject to the Servicer's rights to
service and administer the Mortgage Loans hereunder in accordance with the
terms of this Agreement. All funds received on or in connection with a
Mortgage Loan, other than the Master Servicing Fee, the Servicing Fee and
other compensation and reimbursement to which the Servicer and the Master
Servicer are entitled as set forth herein, including but not limited to
Section 4.04(c), Section 5.07(e) and Section 5.21 shall be received and held
by them in trust for the benefit of the Indenture Trustee pursuant to the
terms of this Agreement.
The Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with Section 4.02(a) within one week
of their execution; provided, however, that the Servicer shall provide the
Custodian with a Servicer certified true copy of any such document
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submitted for recordation within one week of its execution, and shall provide
the original of any document submitted for recordation or a copy of such
document certified by the appropriate public recording office to be a true and
complete copy of the original within [120] days of its submission for
recordation.
Section 4.02. Servicing of the Mortgage Loans.
(a) Servicer to Service. The Servicer, acting directly or through one or
more sub-servicers as provided in Section 4.09 shall service and administer
the Mortgage Loans from and after the Closing Date and, except where prior
consent or approval of the Master Servicer is required under this Agreement,
shall have full power and authority, acting alone, to do any and all things in
connection with such servicing and administration which the Servicer may deem
necessary or desirable, consistent with the terms of this Agreement and with
the Servicing Standard.
Consistent with the terms of this Agreement, the Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor, including (i) waiving any late payment charge and
(ii) extending the due dates for payments due on a Mortgage Note for a period
not greater than [120] days; provided, however, that the maturity of any
Mortgage Loan shall not be extended past the date on which the final payment
is due on the latest maturing Mortgage Loan as of the Cut-off Date. Such
waiver, modification, postponement or indulgence may be made if in the
Servicer's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of the
Issuer, the Indenture Trustee and the Noteholders; provided, however, that
unless the Servicer has obtained the prior written consent of the Master
Servicer, the Servicer shall not permit any modification with respect to any
Mortgage Loan that would change the Mortgage Rate, defer or forgive the
payment of principal or interest, reduce or increase the outstanding principal
balance (except for actual payments of principal) or change the final maturity
date on such Mortgage Loan, other than as provided in clauses (i) and (ii) of
the immediately preceding sentence. In the event of any such modification
which permits the deferral of interest or principal payments on any Mortgage
Loan, the Servicer shall, on the Business Day immediately preceding the
Servicer Remittance Date in any month in which any such principal or interest
payment has been deferred, make an Advance in accordance with Section 4.03(c)
in an amount equal to the difference between (a) such month's principal and
one month's interest at the Mortgage Loan Remittance Rate on the unpaid
principal balance of such Mortgage Loan and (b) the amount paid by the
Mortgagor. The Servicer shall be entitled to reimbursement for such advances
to the same extent as for all other Advances made pursuant to Section 4.03.
Without limiting the generality of the foregoing, the Servicer shall continue,
and is hereby authorized and empowered, to execute and deliver on behalf of
itself, the Issuer and the Indenture Trustee, all instruments of satisfaction
or cancellation, or of partial or full release, discharge and all other
comparable instruments, with respect to the Mortgage Loans and with respect to
the Mortgaged Properties. The Indenture Trustee shall execute and deliver to
the Servicer powers of attorney (on the standard form used by the Indenture
Trustee) and other documents, furnished to it by the Servicer and reasonably
satisfactory to the Indenture Trustee, necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties under this
Agreement; provided that the Indenture Trustee shall not be liable for the
actions of the Servicer under any such
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powers of attorney. Promptly after the execution of any assumption,
modification, consolidation or extension of any Mortgage Loan, the Servicer
shall forward to the Master Servicer copies of any documents evidencing such
assumption, modification, consolidation or extension.
In servicing and administering the Mortgage Loans, the Servicer
shall adhere to the Servicing Standard. Notwithstanding the appointment of any
sub-servicer pursuant to Section 4.09, the Servicer shall remain liable for
the performance of all of the servicing obligations and responsibilities under
this Agreement.
(b) Servicer Discretion. In managing the liquidation of defaulted
Mortgage Loans, the Servicer will have sole discretion, subject to the terms
of this Agreement, to sell defaulted Mortgage Loans; provided, however, that
the Servicer shall not take any action that is inconsistent with or prejudices
the interests of the Noteholders in any Mortgage Loan or the rights and
interests of the Depositor, the Indenture Trustee and the Noteholders under
this Agreement.
(c) Collection and Liquidation of Mortgage Loans. Continuously from the
Closing Date, until the date each Mortgage Loan ceases to be subject to this
Agreement, the Servicer shall proceed diligently to collect all payments due
under each of the Mortgage Loans when the same shall become due and payable
and shall take special care in ascertaining and estimating Escrow Payments and
all other charges that will become due and payable with respect to the
Mortgage Loans and each related Mortgaged Property, to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges
as and when they become due and payable.
The Servicer shall use its best efforts, consistent with the
Servicing Standard to foreclose upon or otherwise comparably convert the
ownership of such Mortgaged Properties as come into and continue in default
and as to which no satisfactory arrangements can be made for collection of
delinquent payments pursuant to Section 4.02(a). The Servicer shall use its
best efforts to realize upon defaulted Mortgage Loans in such a manner as will
maximize the receipt of principal and interest by the Trust, taking into
account, among other things, the timing of foreclosure proceedings. The
foregoing is subject to the provisions that, in any case in which Mortgaged
Property shall have suffered damage, the Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its discretion (i) that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan to the Issuer after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds
from the related Mortgaged Property. In the event that any payment due under
any Mortgage Loan and not otherwise postponed, deferred or waived pursuant to
Section 4.02 is not paid when the same becomes due and payable, or in the
event the Mortgagor fails to perform any other covenant or obligation under
the Mortgage Loan and such failure continues beyond any applicable grace
period, the Servicer shall take such action as (1) shall be consistent with
the Servicing Standard and (2) the Servicer shall determine prudently to be in
the best interest of the Issuer, the Indenture Trustee and the Noteholders. In
the event that any payment due under any Mortgage Loan is not otherwise
postponed, deferred or waived pursuant to Section 4.02(a) and remains
delinquent for a period of [105] days or any other default continues for a
period of [105] days beyond the expiration of any grace or cure period, the
Servicer shall commence foreclosure
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proceedings. The Servicer shall notify the Master Servicer in writing of the
commencement of foreclosure proceedings on a monthly basis no later than the
[fifth] Business Day of each month (which notification may be included within
the monthly reports submitted to the Master Servicer under Section 4.03(b)
this Agreement). In such connection, the Servicer shall be responsible for all
costs and expenses incurred by it in any such proceedings; provided, however,
that it shall be entitled to reimbursement thereof from the related Mortgaged
Property, as contemplated in Sections 4.02(e) and 4.02(p) or as otherwise
provided in Section 4.02(e)(4).
Notwithstanding the generality of the preceding paragraph, the
Servicer shall take such actions generally in accordance with the Servicer's
established default timeline and in accordance with the Servicing Standard
with respect to each Mortgage Loan and Mortgagor for which there is a
delinquency until such time as the related Mortgagor is current with all
payments due under the Mortgage Loan.
(d) Establishment of and Deposits to Custodial Account.
(i) The Servicer shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans separate and apart from any of
its own funds and general assets and shall initially establish and
maintain one or more Custodial Accounts, in the form of time deposit or
demand accounts, each of which accounts shall be titled
"_________________________ in trust for
____________________________________, as Indenture Trustee, for ______
Mortgage Investment Trust 200_-__ Asset-Backed Notes, Series 200_-__"
and referred to herein as a "Custodial Account." Each Custodial Account
shall be an Eligible Account. Any funds deposited in the Custodial
Account may be invested in Eligible Investments subject to the
provisions of Section 4.02(j) hereof. Funds deposited in the Custodial
Account may be drawn on by the Servicer in accordance with Section
4.02(e) hereof. The creation of any Custodial Account shall be evidenced
by a letter agreement in the form of Exhibit E hereto. A copy of such
certification or letter agreement shall be furnished to the Indenture
Trustee, the Master Servicer and, upon request, to any subsequent owner
of the Mortgage Loans. The Servicer shall deposit or cause to be
deposited into the Custodial Account, no later than the Business Day
following the Closing Date, any amounts received with respect to the
Mortgage Loans representing Scheduled Payments on the Mortgage Loans due
after the Cut-off Date and unscheduled payments received on or after the
Cut-off Date and on or before the Closing Date.
(ii) The Servicer shall deposit in the Custodial Account on a
daily basis, but not more than [two] Business Days after receipt by the
Servicer and retain therein, the following collections received by the
Servicer and payments made by the Servicer after the related Cut-off
Date (other than scheduled payments of principal and interest due on or
before the related Cut-off Date), as applicable:
(1) all payments on account of principal on
the Mortgage Loans, including all Principal
Prepayments and all Prepayment Premiums;
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(2) all payments on account of interest on the
Mortgage Loans adjusted to the Mortgage Loan
Remittance Rate;
(3) all Liquidation Proceeds (net of
Liquidation Expenses);
(4) all Insurance Proceeds including amounts
required to be deposited pursuant to Section 4.02(k)
(other than proceeds to be held in the Escrow
Account and applied to the restoration and repair of
the Mortgaged Property or released to the Mortgagor
in accordance with Section 4.02(k));
(5) all Condemnation Proceeds that are not
applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in
accordance with Section 4.02(o);
(6) with respect to each Principal Prepayment
in full or in part, the Prepayment Interest
Shortfall Amount, if any, for the month of payment.
Such deposit shall be made from the Servicer's own
funds, without reimbursement therefor, up to a
maximum amount per month in the aggregate of the
Servicing Fee, actually received for such month for
the Mortgage Loans;
(7) all Advances made by the Servicer pursuant
to Section 4.03(c);
(8) any amounts received from the Seller, the
Depositor or any other person giving representations
and warranties with respect to the Mortgage Loans,
in connection with the repurchase of any Mortgage
Loan;
(9) any amounts required to be deposited by
the Servicer pursuant to Section 4.02(k) in
connection with the deductible clause in any blanket
hazard insurance policy;
(10) any amounts received with respect to or
related to any REO Property or REO Disposition
Proceeds pursuant to Section 4.02(p); and
(11) any other amounts required to be
deposited in the Custodial Account pursuant to this
Agreement.
The foregoing requirements for deposit into the Custodial Account
shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of the
Servicing Fee, Prepayment Interest Excess Amounts and Ancillary Income
need not be deposited by the Servicer into the Custodial Account. Any
interest paid on funds deposited in the Custodial Account by the
depository institution maintaining such account shall accrue to the
benefit of the Servicer
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and the Servicer shall be entitled to retain and withdraw such interest
from the Custodial Account pursuant to Section 4.02(e). Additionally,
any other benefit derived from the Custodial Account associated with the
receipt, disbursement and accumulation of principal, interest, taxes,
hazard insurance, mortgage insurance, etc. shall accrue to the Servicer.
(iii) The Servicer agrees that it shall not create, incur or
subject any Mortgage Loans, or any funds that are deposited in any
Custodial Account or Escrow Account, or any funds that otherwise are or
may become due or payable to or for the benefit of the Indenture
Trustee, to any claim, lien, security interest, judgment, levy, writ of
attachment or other encumbrance, nor assert by legal action or otherwise
any claim or right of setoff against any Mortgage Loan or any funds
collected on, or in connection with, a Mortgage Loan.
(iv) The Servicer shall be responsible for reviewing and
reconciling each Custodial Account and Escrow Account in accordance with
industry standards of prudent residential mortgage loan servicers, and
shall act promptly to resolve any discrepancies in any such account. The
Servicer shall be responsible and liable for all expenses incurred by
the other parties hereto resulting from, and all consequences for, the
Servicer's failure to properly and promptly reconcile each such account.
(e) Permitted Withdrawals from Custodial Account.
The Servicer shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(1) to make payments to the Master Servicer in
the amounts and in the manner provided for in
Section 4.03(a);
(2) in the event the Servicer has elected not
to retain the Servicing Fee out of any Mortgagor
payments on account of interest or other recovery of
interest with respect to a particular Mortgage Loan
(including late collections of interest on such
Mortgage Loan, or interest portions of Insurance
Proceeds, Liquidation Proceeds or Condemnation
Proceeds) prior to the deposit of such Mortgagor
payment or recovery into the Custodial Account, to
pay to itself the related Servicing Fee from all
such Mortgagor payments on account of interest or
other such recovery for interest with respect to
that Mortgage Loan;
(3) to reimburse itself for unreimbursed
Advances and Servicing Advances, the Servicer's
right to reimburse itself pursuant to this subclause
(3) with respect to any Mortgage Loan being limited
to related Liquidation Proceeds (net of Liquidation
Expenses), Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and other amounts
received in respect of
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the related REO Property, and such other amounts as
may be collected by the Servicer from the Mortgagor
or otherwise relating to such Mortgage Loan, it
being understood that, in the case of any such
reimbursement, the Servicer's right thereto shall
be prior to the rights of the Noteholders;
(4) to reimburse itself for any previously
unreimbursed Advances or Servicing Advances that it
determines are Nonrecoverable Advances, it being
understood, in the case of each such reimbursement,
that the Servicer's right thereto shall be prior to
the rights of the Noteholders;
(5) to pay itself investment earnings on funds
deposited in the Custodial Account;
(6) to transfer funds to another Eligible
Account in accordance with Section 4.02(j) hereof;
(7) to invest funds in certain Eligible
Investments in accordance with Section 4.02(d)(i)
and Section 4.02(j) hereof;
(8) to withdraw funds deposited in error;
(9) to clear and terminate the Custodial
Account upon the termination of this Agreement; and
(10) to pay itself any Prepayment Interest
Excess Amount.
(f) Establishment of and Deposits to Escrow Account. The Servicer shall
segregate and hold all funds collected and received pursuant to a Mortgage
Loan constituting Escrow Payments separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Escrow
Accounts, in the form of time deposit or demand accounts, titled
"_________________________ in trust for ____________________________________,
as Indenture Trustee, for ______ Mortgage Investment Trust 200_-__." The
Escrow Accounts shall be established with an Eligible Institution. Nothing
herein shall require the Servicer to compel a Mortgagor to establish an Escrow
Account in violation of applicable law. Funds deposited in the Escrow Account
may be drawn on by the Servicer in accordance with Section 4.02(g). The
creation of any Escrow Account shall be evidenced by a letter agreement in the
form of Exhibit F hereto. A copy of such certification or letter agreement
shall be furnished to the Master Servicer.
The Servicer shall deposit in the Escrow Account or Accounts on a
daily basis, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement; and
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(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account only
to effect such payments as are required under this Agreement, as set forth in
Section 4.02(g). The Servicer shall be entitled to retain any interest
earnings paid on funds deposited in the Escrow Account by the depository
institution, other than interest on escrowed funds required by law to be paid
to the Mortgagor. To the extent required by law, the Servicer shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account may be non-interest bearing or the interest earnings paid thereon are
insufficient for such purposes.
(g) Permitted Withdrawals from Escrow Account. Withdrawals from the
Escrow Account or Accounts may be made by the Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments
for the related Mortgage;
(ii) to reimburse the Servicer for any Servicing Advance of an
Escrow Payment made by the Servicer with respect to a related Mortgage
Loan, but only from amounts received on the related Mortgage Loan which
represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess
of the amounts required to be escrowed under the terms of the related
Mortgage Loan;
(iv) to the extent permitted by applicable law, for transfer to
the Custodial Account and application to reduce the principal balance of
the Mortgage Loan in accordance with the terms of the related Mortgage
and Mortgage Note;
(v) for application to restoration or repair of the Mortgaged
Property in accordance with Section 4.02(o);
(vi) to pay to the Servicer, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow
Account; and
(vii) to clear and terminate the Escrow Account on the termination
of this Agreement.
The Servicer will be responsible for the administration of the
Escrow Accounts and will be obligated to make Servicing Advances to the Escrow
Account in respect of its obligations under this 4.02(g), reimbursable from
the Escrow Accounts or Custodial Account to the extent not collected from the
related Mortgagor, anything to the contrary notwithstanding, when and as
necessary to avoid the lapse of insurance coverage on the Mortgaged Property,
or which the Servicer knows, or in servicing the Mortgage Loans in accordance
with the Servicing Standard should know, is necessary to avoid the loss of the
Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien. If any such payment has not been made and the Servicer receives notice
of a tax lien with respect to the Mortgage being imposed, the Servicer
69
will advance or cause to be advanced funds (which will constitute a Servicing
Advance) necessary to discharge such lien on the Mortgaged Property in order
to prevent loss of title to the Mortgaged Property.
(h) Notification of Adjustments. With respect to each Mortgage Loan, the
Servicer shall adjust the Mortgage Rate on the related interest rate
adjustment date and shall adjust the Scheduled Payment on the related mortgage
payment adjustment date, if applicable, in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. The Servicer shall
execute and deliver any and all necessary notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Rate and Scheduled Payment adjustments. The Servicer shall promptly,
upon written request therefor, deliver to the Master Servicer such
notifications and any additional applicable data regarding such adjustments
and the methods used to calculate and implement such adjustments. Upon the
discovery by the Servicer or the receipt of notice from the Master Servicer
that the Servicer has failed to adjust a Mortgage Rate or Scheduled Payment in
accordance with the terms of the related Mortgage Note, the Servicer shall
immediately deposit in the Custodial Account from its own funds the amount of
any interest loss or deferral caused the Seller thereby.
(i) Payment of Taxes, Insurance and Other Charges.
(i) With respect to each Mortgage Loan which provides for Escrow
Payments, the Servicer shall maintain accurate records reflecting the
status of ground rents, taxes, assessments, water rates, sewer rents,
and other charges which are or may become a lien upon the Mortgaged
Property and the status of fire and hazard insurance coverage and shall
obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) ("Property Charges") and shall effect
payment thereof prior to the applicable penalty or termination date,
employing for such purpose deposits of the Mortgagor in the Escrow
Account which shall have been estimated and accumulated by the Servicer
in amounts sufficient for such purposes, as allowed under the terms of
the Mortgage. The Servicer shall effect timely payment of all such
charges (which will constitute Servicing Advances) irrespective of each
Mortgagor's faithful performance in the payment of the same or the
making of the Escrow Payments if necessary to avoid a lien or loss on
the Mortgaged Property.
(ii) To the extent that a Mortgage does not provide for Escrow
Payments, the Servicer shall make Servicing Advances from its own funds
to effect payment of all Property Charges upon receipt of notice of any
failure to pay on the part of the Mortgagor, or at such other time as
the Servicer determines to be in the best interest of the Trust;
provided, that in any event the Servicer shall pay such charges on or
before any date by which payment is necessary to preserve the lien
status of the Mortgage. The Servicer shall pay any late fee or penalty
(which will constitute Servicing Advances) which is payable due to any
delay in payment of any Property Charge and necessary to avoid a lien on
or loss on Mortgage Property.
(j) Protection of Accounts. The Servicer may transfer the Custodial
Account or the Escrow Account to a different Eligible Institution from time to
time. Such transfer shall be made only upon obtaining the consent of the
Master Servicer, which consent shall not be withheld
70
unreasonably, and the Servicer shall give notice to the Master Servicer and
the Indenture Trustee of any change in the location of the Custodial Account.
The Servicer shall bear any expenses, losses or damages sustained
by the Master Servicer or the Indenture Trustee if the Custodial Account
and/or the Escrow Account are not Eligible Accounts.
Amounts on deposit in the Custodial Account may be invested at the
option of the Servicer, but only in Eligible Investments. Any such Eligible
Investment with respect to the Custodial Account shall mature no later than
[two] Business Days prior to the Servicer Remittance Date in each month;
provided, however, that if such Eligible Investment is an obligation of an
Eligible Institution (other than the Servicer) that maintains the Custodial
Account, then such Eligible Investment may mature on the related Servicer
Remittance Date. Any such Eligible Investment shall be made in the name of the
Servicer in trust for the benefit of the Indenture Trustee. All income on or
gain realized from any such Eligible Investment shall be for the benefit of
the Servicer and may be withdrawn at any time by the Servicer. Any losses
incurred in respect of any such investment shall be deposited in the Custodial
Account by the Servicer out of its own funds immediately as realized. If, at
any time, the amount on deposit in the Custodial Account exceeds the amount of
the applicable FDIC insurance, such excess above the amount of the applicable
FDIC insurance shall be invested in Eligible Investments.
(k) Maintenance of Hazard Insurance. The Servicer shall cause to be
maintained for each Mortgage Loan hazard insurance such that all buildings
upon the related Mortgaged Property are insured by a generally acceptable
insurer acceptable under the Servicing Standard against loss by fire, hazards
of extended coverage and such other hazards as are customary in the area where
the Mortgaged Property is located, in an amount which is at least equal to the
lesser of (i) the replacement value of the improvements securing such Mortgage
Loan and (ii) the greater of (a) the outstanding principal balance of the
Mortgage Loan plus accrued interest thereon and the good faith estimate of the
Servicer of the related Liquidation Expenses to be incurred in connection
therewith and (b) an amount such that the proceeds thereof shall be sufficient
to prevent the Mortgagor or the loss payee from becoming a co-insurer. The
Servicer shall be under no obligation to require any Mortgagor to obtain
earthquake or other additional insurance and shall be under no obligation
itself to maintain any such additional insurance on property acquired in
respect of a Mortgage 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.
If upon origination of the Mortgage Loan the related Mortgaged
Property was located in an area identified in the Federal Register by the
Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available), a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
shall be in effect with a generally acceptable insurance carrier acceptable
under the Servicing Standard in an amount representing coverage equal to the
lesser of (i) the minimum amount required, under the terms of coverage, to
compensate for any damage or loss on a replacement cost basis (or the unpaid
balance of the mortgage if replacement cost coverage is not available for the
type of building insured) and (ii) the maximum amount of insurance which is
available under the Flood Disaster Protection Act of 1973, as amended. If at
any time during the term of the Mortgage Loan, the Servicer determines in
accordance with
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applicable law and pursuant to the Servicing Standard that a Mortgaged
Property is located in a special flood hazard area and is not covered by flood
insurance or is covered in an amount less than the amount required by the
Flood Disaster Protection Act of 1973, as amended, the Servicer shall notify
the related Mortgagor that the Mortgagor must obtain such flood insurance
coverage, and if said Mortgagor fails to obtain the required flood insurance
coverage within [thirty] days after such notification, the Servicer shall
immediately force place the required flood insurance on the Mortgagor's
behalf.
The Servicer shall cause to be maintained on each Mortgaged
Property such other or additional insurance as may be required pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance, or pursuant to the requirements of
any private mortgage guaranty insurer, or as may be required to conform with
the Servicing Standard.
In the event that the Master Servicer or the Servicer shall
determine that the Mortgaged Property should be insured against loss or damage
by hazards and risks not covered by the insurance required to be maintained by
the Mortgagor pursuant to the terms of the Mortgage, the Servicer shall
communicate and consult with the Mortgagor with respect to the need for such
insurance and bring to the Mortgagor's attention the desirability of
protection of the Mortgaged Property.
All policies required hereunder shall name the Servicer as loss
payee and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least [30] days' prior written notice
of any cancellation, reduction in amount or material change in coverage.
The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent; provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies are generally acceptable under the Servicing
Standard. The Servicer shall determine that such policies provide sufficient
risk coverage and amounts, that they insure the property owner, and that they
properly describe the property address. The Servicer shall notify the
Mortgagor of the expiration of any such insurance and, prior to force placing
any insurance, will permit the Mortgagor a grace period (not to exceed [60]
days) to obtain renewal coverage.
Pursuant to Section 4.02(d), any amounts collected by the Servicer
under any such policies (other than amounts to be deposited in the Escrow
Account and applied to the restoration or repair of the related Mortgaged
Property, or property acquired in liquidation of the Mortgage Loan, or to be
released to the Mortgagor, in accordance with the Servicer's normal servicing
procedures) shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.02(e).
(l) Maintenance of Mortgage Impairment Insurance. In the event that the
Servicer shall obtain and maintain a blanket policy insuring against losses
arising from fire and hazards covered under extended coverage on all of the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 4.02(k) and otherwise
complies with all other requirements of Section 4.02(k), it shall conclusively
be
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deemed to have satisfied its obligations as set forth in Section 4.02(k). Any
amounts collected by the Servicer under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.02(e). Such policy may contain a deductible clause, in
which case, in the event that there shall not have been maintained on the
related Mortgaged Property a policy complying with Section 4.02(k), and there
shall have been a loss which would have been covered by such policy, the
Servicer shall deposit in the Custodial Account at the time of such loss the
amount not otherwise payable under the blanket policy because of such
deductible clause, such amount to deposited from the Servicer's funds, without
reimbursement therefor. Upon request of the Master Servicer or the Indenture
Trustee, the Servicer shall cause to be delivered to such person a certified
true copy of such policy and a statement from the insurer thereunder that such
policy shall in no event be terminated or materially modified without [30]
days' prior written notice to the Master Servicer and the Indenture Trustee.
(m) Maintenance of Fidelity Bond and Errors and Omissions Insurance. The
Servicer shall maintain with responsible companies, at its own expense, a
blanket Fidelity Bond and an Errors and Omissions Insurance Policy, with broad
coverage on all officers, employees or other persons acting in any capacity
requiring such persons to handle funds, money, documents or papers relating to
the Mortgage Loans ("Servicer Employees"). Any such Fidelity Bond and Errors
and Omissions Insurance Policy shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Servicer Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Servicer against
losses in connection with the release or satisfaction of a Mortgage Loan
without having obtained payment in full of the indebtedness secured thereby.
No provision of this Section 4.02(m) requiring such Fidelity Bond and Errors
and Omissions Insurance Policy shall diminish or relieve the Servicer from its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such bond and insurance policy shall be at least equal to the
coverage amounts which are acceptable for the Servicer as determined by ▇▇▇▇▇▇
▇▇▇ and ▇▇▇▇▇▇▇ Mac. Upon the request of the Master Servicer or the Indenture
Trustee, the Servicer shall cause to be delivered to such party a certified
true copy of such fidelity bond and insurance policy and a statement from the
surety and the insurer that such fidelity bond and insurance policy shall in
no event be terminated or materially modified without [30] days' prior written
notice to the Master Servicer and the Indenture Trustee.
(n) Inspections. The Servicer shall inspect the Mortgaged Property as
often as deemed necessary by the Servicer to assure itself that the value of
the Mortgaged Property is being preserved. In addition, the Servicer shall
inspect the Mortgaged Property and/or take such other actions as may be
necessary or appropriate in accordance with the Servicing Standard or as may
be required by the primary mortgage guaranty insurer. The Servicer shall keep
a written report of each such inspection.
(o) Restoration of Mortgaged Property. The Servicer need not obtain the
approval of the Master Servicer or the Indenture Trustee prior to releasing
any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to the restoration or repair of the Mortgaged Property if such release is in
accordance with the Servicing Standard. At a minimum,
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the Servicer shall comply with the following conditions in connection with any
such release of Insurance Proceeds or Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
(ii) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
and
(iii) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
(p) Title, Management and Disposition of REO Property. In the event that
title to any Mortgaged Property is acquired in foreclosure or by deed in lieu
of foreclosure, the deed or certificate of sale shall be taken in the name of
the Indenture Trustee or its nominee (which shall include the Servicer) in
trust for the benefit of the Noteholders, or in the event the Indenture
Trustee is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed
or certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an Opinion of Counsel obtained by the Servicer (with
a copy delivered to the Indenture Trustee) from any attorney duly licensed to
practice law in the state where the REO Property is located. The Person or
Persons holding such title other than the Indenture Trustee shall acknowledge
in writing that such title is being held as nominee for the Indenture Trustee.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Indenture Trustee solely for the purpose of its prompt
disposition and sale. The Servicer, either itself or through an agent selected
by the Servicer, shall manage, conserve, protect and operate the REO Property
in the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. The Servicer
shall attempt to sell the same (and may temporarily rent the same for a period
not greater than one year, except as otherwise provided below) on such terms
and conditions as the Servicer deems to be in the best interest of the Issuer,
the Indenture Trustee and the Noteholders.
If the Servicer hereafter becomes aware that a Mortgaged Property
is an Environmental Problem Property, the Servicer will notify the Master
Servicer of the existence of the Environmental Problem Property. Additionally,
the Servicer shall set forth in such notice a description of such problem, a
recommendation to the Master Servicer relating to the proposed action
regarding the Environmental Problem Property, and the Servicer shall carry out
the recommendation set forth in such notice. Notwithstanding the foregoing,
the Servicer shall obtain the Master Servicer's prior written consent to any
expenditures proposed to remediate Environmental Problem Properties or to
defend any claims associated with Environmental Problem Properties if such
expenses, in the aggregate, are expected to exceed $[100,000]. Failure to
provide written notice of disapproval of the expenditure within [five]
Business Days of receipt of such request for prepaid expenditures shall be
deemed an approval of such
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expenditure. If the Servicer has received reliable instructions to the effect
that a Mortgaged Property is an Environmental Problem Property (e.g., Servicer
obtains a broker's price opinion which reveals the potential for such
problem), the Servicer will not accept a deed-in-lieu of foreclosure upon any
such Mortgaged Property without first obtaining a preliminary environmental
investigation for that Mortgaged Property.
The Servicer shall also maintain on each REO Property fire and
hazard insurance with extended coverage in amount which is at least equal to
the maximum insurable value of the improvements which are a part of such
property and, to the extent required and available under the Flood Disaster
Protection Act of 1973, as amended, flood insurance in the amount required
above, which may be in the form of a blanket policy. Any amounts collected by
the Servicer under any such policy relating to a Mortgage Loan shall be
deposited in the Custodial Account subject to withdrawal pursuant to Section
4.02(e). Such policy may contain a deductible clause, in which case, in the
event that there shall not have been maintained on the related Mortgaged
Property a policy complying with Section 4.02(k), and there shall have been a
loss which would have been covered by such policy, the Servicer shall deposit
in the Custodial Account at the time of such loss the amount not otherwise
payable under the blanket policy because of such deductible clause, such
amount to deposited from the Servicer's funds, without reimbursement therefor.
The proceeds of sale of the REO Property shall be promptly
deposited in the Custodial Account. As soon as practical thereafter the
expenses of such sale shall be paid and the Servicer shall reimburse itself
pursuant to Section 4.02(e) for any related unreimbursed Servicing Advances,
unpaid Servicing Fees and unreimbursed advances made pursuant to this Section
or Section 4.03.
The Servicer shall make Servicing Advances of all funds necessary
for the proper operation, management and maintenance of the REO Property,
including the cost of maintaining any hazard insurance pursuant to Section
4.02(k), such advances to be reimbursed from the disposition or liquidation
proceeds of the REO Property or pursuant to Section 4.02(e)(4). The Servicer
shall make monthly remittances on each Servicer Remittance Date to the Master
Servicer of the net cash flow from the REO Property (which shall equal the
revenues from such REO Property net of the expenses described in this Section
4.02(p) and of any reserves reasonably required from time to time to be
maintained to satisfy anticipated liabilities for such expenses).
(q) Real Estate Owned Reports. Together with the statement furnished
pursuant to Section 4.03(b), the Servicer shall furnish to the Master Servicer
on or before the [18th] calendar day in each month a statement with respect to
any REO Property covering the operation of such REO Property for the previous
month and the Servicer's efforts in connection with the sale of such REO
Property and any rental of such REO Property incidental to the sale thereof
for the previous month. That statement shall be accompanied by such other
information as the Master Servicer shall reasonably request.
(r) Liquidation Reports. Upon the foreclosure sale of any Mortgaged
Property or the acquisition thereof by the Indenture Trustee pursuant to a
deed in lieu of foreclosure, the Servicer
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shall submit to the Indenture Trustee and the Master Servicer a monthly
liquidation report with respect to such Mortgaged Property.
(s) Reports of Foreclosures and Abandonments of Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged Property, the
Servicer shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code.
(t) Prepayment Premiums. The Servicer or any designee of the Servicer
shall not waive any Prepayment Premium with respect to any Mortgage Loan that
contains a Prepayment Premium and that prepays during the term of the premium.
If the Servicer or its designee fails to collect the Prepayment Premium upon
any prepayment of any Mortgage Loan that contains a Prepayment Premium, the
Servicer shall pay to the Master Servicer or the Trust Administrator at such
time (by deposit to the Custodial Account) an amount equal to amount of the
Prepayment Premium that was not collected. Notwithstanding the above, the
Servicer or its designee may waive a Prepayment Premium without paying the
Issuer the amount of the Prepayment Premium if (i) the Mortgage Loan is in
default (defined as [61] days or more delinquent) and such waiver would
maximize recovery of total proceeds taking into account the value of such
Prepayment Premium and the related Mortgage Loan or (ii) if the prepayment is
not a result of a refinancing by the Servicer or any of its affiliates and the
Mortgage Loan is foreseen to be in default and such waiver would maximize
recovery of total proceeds taking into account the value of such Prepayment
Premium and the related Mortgage Loan or (iii) the collection of the
Prepayment Premium would be in violation of applicable federal, state or local
laws or would be deemed "predatory" thereunder.
(u) Compliance with Safeguarding Customer Information Requirements. The
Servicer has implemented and will maintain security measures designed to meet
the objectives of the Interagency Guidelines Establishing Standards for
Safeguarding Customer Information published in final form on February 1, 2001,
66 Fed. Reg. 8616, and the rules promulgated thereunder, as amended from time
to time (the "Guidelines").
(v) Presentment of Claims and Collection of Proceeds. The Servicer shall
prepare and present on behalf of the Indenture Trustee and the Noteholders all
claims under the Insurance Policies with respect to the Mortgage Loans, 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 Servicer in respect of such
policies or bonds shall be promptly deposited in the Custodial 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 requisite 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).
(w) Purchase of Defaulted Mortgage Loans. The Servicer, in its sole
discretion, shall have the right to elect (by written notice sent to the
Indenture Trustee and the Trust Administrator) to purchase for its own account
from the Trust Estate any Mortgage Loan that is [90] days or more Delinquent
at a price equal to the Purchase Price; provided, however, that the Servicer
may only exercise this right on or after the last day of the calendar month in
which such Mortgage Loan became [90] days Delinquent (such month, the
"Eligible Purchase Month"); provided further, that any such Mortgage Loan
which becomes current but thereafter becomes
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Delinquent may only be purchased by the Servicer pursuant to this Section
4.02(w) in any ensuing Eligible Purchase Month. The principal portion of the
funds in respect of such purchase of a Mortgage Loan will be considered a
Principal Prepayment and the Purchase Price shall be deposited in the
Collection Account. Upon receipt by the Trust Administrator of the full amount
of the Purchase Price for such Mortgage Loan and notification thereof has been
made to the Indenture Trustee, the Indenture Trustee shall release or cause to
be released and reassign to the Servicer the related Mortgage File for such
Mortgage Loan and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as
shall be necessary to vest in such party or its designee or assignee title to
any such Mortgage Loan released pursuant hereto, free and clear of all
security interests, liens and other encumbrances created by this Agreement and
the Indenture, which instruments shall be prepared by the Servicer and the
Indenture Trustee shall have no further responsibility with respect to the
Mortgage File relating to such [90] days Delinquent Mortgage Loan purchased by
the Seller.
Section 4.03. Payments To the Master Servicer.
(a) Remittances. On each Servicer Remittance Date, the Servicer shall
remit on a scheduled/scheduled basis by wire transfer of immediately available
funds to the Master Servicer (a) all amounts deposited in the Custodial
Account as of the close of business on the last day of the related Collection
Period (net of charges against or withdrawals from the Custodial Account
pursuant to Section 4.02(e)), plus (b) all Advances, if any, which the
Servicer is obligated to make pursuant to Section 4.03(c), minus (c) any
amounts attributable to Principal Prepayments, Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds or REO Disposition Proceeds received after the
applicable Prepayment Period, which amounts shall be remitted on the following
Servicer Remittance Date, together with any Compensating Interest required to
be deposited in the Custodial Account in accordance with Section
4.02(d)(ii)(6) and Section 4.04(c), and minus (d) any amounts attributable to
Scheduled Payments collected but due on a Due Date or Due Dates subsequent to
the first day of the month in which such Servicer Remittance Date occurs,
which amounts shall be remitted on the Servicer Remittance Date next
succeeding the Due Date related to such Scheduled Payment.
With respect to any remittance received by the Master Servicer
after the Servicer Remittance Date on which such remittance was due as
provided above, the Servicer shall pay to the Master Servicer interest on any
such late remittance at an annual rate equal to the Prime Rate, adjusted as of
the date of each change, plus three percentage points, but in no event greater
than the maximum amount permitted by applicable law. Such interest shall be
deposited in the Custodial Account by the Servicer on the date such late
remittance is made and shall cover the period commencing with the day
following such Servicer Remittance Date and ending with the Business Day on
which such remittance is made, both inclusive. The payment by the Servicer of
any such interest shall not be deemed an extension of time for payment or a
waiver of any Servicer Event of Default by the Servicer.
All remittances required to be made to the Master Servicer shall
be made to the following wire account or to such other account as may be
specified by the Master Servicer from time to time:
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____________________
_________________
ABA#: ___________
Account Name: ___________________
Account Number: __________
Reference: ____________________
(b) Statements to Master Servicer and Trust Administrator. On the [18th]
day of each calendar month (or, if such [18th] day is not a Business Day, then
no later than noon (Eastern Time) on the immediately preceding Business Day),
the Servicer shall furnish to the Master Servicer (i) a monthly remittance
advice in the format set forth in Exhibit G-1 hereto (including the
information in Exhibit G-1A), a monthly defaulted loan report in the format
set forth in Exhibit G-2 hereto (or in such other format mutually agreed to
between the Servicer and the Master Servicer) and, with respect to each
Mortgage Loan with respect to which a Realized Loss occurred during the
immediately preceding calendar month, a realized loss report in the format set
forth in Exhibit G-3 hereto (or in such other format mutually agreed to
between the Servicer and the Master Servicer), in each case relating to the
period ending on the last day of the preceding calendar month and (ii) all
such information required pursuant to clause (i) above on a magnetic tape or
other similar media reasonably acceptable to the Master Servicer. No later
than [two] Business Days after the end of each Prepayment Period, the Servicer
shall furnish to the Master Servicer a monthly report containing such
information regarding prepayments of Mortgage Loans during such Prepayment
Period and in a format as mutually agreed to between the Servicer and the
Master Servicer.
Such monthly remittance advice shall also be accompanied by a
supplemental report provided to the Master Servicer and the Seller which
includes on an aggregate basis for the previous calendar month (i) the amount
of any insurance claims filed, (ii) the amount of any claim payments made and
(iii) the amount of claims denied or curtailed. The Master Servicer will
convert such data into a format acceptable to the Trust Administrator and
provide monthly reports to the Trust Administrator pursuant to the Trust
Agreement.
In addition, not more than [75] days after the end of each
calendar year, commencing December 31, 200_, the Servicer shall provide (as
such information becomes reasonably available to the Servicer) to the Master
Servicer and the Trust Administrator such information concerning the Mortgage
Loans and annual remittances to the Master Servicer therefrom as is necessary
for the Trust Administrator to prepare the reports required by Section
5.09(c). Such obligation of the Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Servicer to the Master Servicer and the Trust Administrator
pursuant to any requirements of the Code as from time to time are in force.
The Servicer shall also provide to the Trust Administrator such information as
may be requested by it and required for the completion of any tax reporting
responsibility of the Trust Administrator within such reasonable time frame as
shall enable the Trust Administrator to timely file each Schedule Q (or other
applicable tax report or return) required to be filed by it.
(c) Advances by Servicer. On the Business Day immediately preceding each
Servicer Remittance Date, the Servicer shall deposit in the Custodial Account
from its own funds or from amounts held for future payment, or a combination
of both, an amount equal to all
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Advances for the related Servicer Remittance Date. Any amounts held for future
payment and so used shall be replaced by the Servicer by deposit in the
Custodial Account on or before any future Servicer Remittance Date if funds in
the Custodial Account on such Servicer Remittance Date shall be less than
remittances to the Master Servicer required to be made on such Servicer
Remittance Date. The Servicer shall keep appropriate records of such amounts
and will provide such records to the Master Servicer upon request.
The Servicer's obligation to make such Advances as to any Mortgage
Loan will continue through the last Scheduled Payment due prior to the payment
in full of the Mortgage Loan, or through the last Remittance Date prior to the
Remittance Date for the payment of all Liquidation Proceeds and other payments
or recoveries (including Insurance Proceeds and Condemnation Proceeds) with
respect to the related Mortgage Loan.
(d) Due Dates Other Than the First of the Month. Mortgage Loans having
Due Dates other than the first day of a month shall be accounted for as
described in this Section 4.03(d). Any Scheduled Payment due on a day other
than the first day of each month shall be considered due on the first day of
the month following the month in which that payment is due as if such payment
were due on the first day of that month. For example, a Scheduled Payment due
on August 15 shall be considered to be due on September 1. Any Scheduled
Payment due and collected on a Mortgage Loan after the Cut-off Date shall be
deposited in the Custodial Account. For Mortgage Loans with Due Dates on the
first day of a month, deposits to the Custodial Account begin with the
Scheduled Payment due on the first of the month following the Cut-off Date.
(e) Credit Reporting. For each Mortgage Loan, in accordance with its
current servicing practices, the Servicer will accurately and fully report its
underlying borrower credit files to each of the following credit repositories
or their successors: Equifax Credit Information Services, Inc., Trans Union,
LLC and Experian Information Solution, Inc., on a monthly basis in a timely
manner.
Section 4.04. General Servicing Procedures.
(a) Transfers of Mortgaged Property. The Servicer shall use its best
efforts to enforce any "due-on-sale" provision contained in any Mortgage or
Mortgage Note and to deny assumption by the person to whom the Mortgaged
Property has been or is about to be sold whether by absolute conveyance or by
contract of sale, and whether or not the Mortgagor remains liable on the
Mortgage and the Mortgage Note. When the Mortgaged Property has been conveyed
by the Mortgagor, the Servicer shall, to the extent it has knowledge of such
conveyance, exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause applicable thereto; provided, however,
that the Servicer shall not exercise such rights if prohibited by law from
doing so.
If the Servicer reasonably believes it is unable under applicable
law to enforce such "due-on-sale" clause, the Servicer shall enter into (i) an
assumption and modification agreement with the person to whom such property
has been conveyed pursuant to which such person becomes liable under the
Mortgage Note and the original Mortgagor remains liable thereon or (ii) in the
event the Servicer is unable under applicable law to require that the original
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Mortgagor remain liable under the Mortgage Note and the Servicer has the prior
consent of the primary mortgage guaranty insurer, a substitution of liability
agreement with the seller of the Mortgaged Property pursuant to which the
original Mortgagor is released from liability and the buyer of the Mortgaged
Property is substituted as Mortgagor and becomes liable under the Mortgage
Note. In connection with any such assumption, neither the Mortgage Rate borne
by the related Mortgage Note, the timing of principal or interest payments on
the Mortgage Loan, the term of the Mortgage Loan nor the outstanding principal
amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Servicer
shall inquire diligently into the creditworthiness of the proposed transferee,
and shall use the underwriting criteria for approving the credit of the
proposed transferee which are used by the Servicer, its affiliates or ▇▇▇▇▇▇
▇▇▇ with respect to underwriting mortgage loans of the same type as the
Mortgage Loans. If the credit of the proposed transferee does not meet such
underwriting criteria, the Servicer diligently shall, to the extent permitted
by the Mortgage or the Mortgage Note and by applicable law, accelerate the
maturity of the Mortgage Loan.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption
of a Mortgage Loan by operation of law or any assumption which the Servicer
may be restricted by law from preventing, for any reason whatsoever.
(b) Satisfaction of Mortgages and Release of Mortgage Files. Upon the
payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Servicer shall notify the Master Servicer in the monthly
remittance advice as provided in Section 4.03(b), and may request the release
of any Mortgage Loan Documents from the Custodian in accordance with the
Custodial Agreement.
If the Servicer satisfies or releases a Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage,
the Servicer shall deposit into the Custodial Account the entire outstanding
principal balance, plus all accrued interest on such Mortgage Loan, on the day
preceding the Servicer Remittance Date in the month following the date of such
release. The Servicer shall maintain the Fidelity Bond and Errors and
Omissions Insurance Policy as provided for in Section 4.02(m) insuring the
Servicer against any loss it may sustain with respect to any Mortgage Loan not
satisfied in accordance with the procedures set forth herein.
(c) Servicing Compensation. As consideration for servicing the Mortgage
Loans subject to this Agreement, the Servicer shall be paid in the aggregate
the relevant Servicing Fee for each Mortgage Loan remaining subject to this
Agreement during any month or part thereof. Such Servicing Fee shall be
payable monthly and retained by the Servicer, or as otherwise provided in
Section 4.02(e)(2). The obligation of the Issuer to pay the Servicing Fee is
limited to, and the Servicing Fee is payable from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds) of
such Scheduled Payment collected by the Servicer, or as otherwise provided in
Section 4.02(e)(2). Additional servicing compensation in the form of
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Ancillary Income shall be retained by the Servicer and is not required to be
deposited in the Custodial Account.
The Servicer shall be required to pay all expenses incurred by it
in connection with its servicing activities hereunder and shall not be
entitled to reimbursement thereof except as specifically provided for herein.
The Servicing Fee payable to or retained by the Servicer with
respect to any Collection Period shall be reduced by the aggregate Prepayment
Interest Shortfall Amount for the related Prepayment Period required to be
deposited in the Custodial Account and remitted to the Master Servicer on the
related Servicer Remittance Date. The Servicer shall be obligated to remit to
the Master Servicer on each Servicer Remittance Date the aggregate Prepayment
Interest Shortfall Amount, only up to an amount equal to in the aggregate the
Servicing Fee the Servicer is entitled to receive for such Collection Period.
(d) [Reserved]
(e) Annual Compliance Certifications.
(i) No later than March 15 of each calendar year, commencing with
the year 200_, the Servicer shall, and shall cause each Subservicer to,
at its own expense, deliver to the Depositor, the Seller, the Master
Servicer, the Indenture Trustee and the Trust Administrator a servicer's
certificate stating, as to each signer thereof, that (i) a review of the
activities of such Person during such preceding fiscal year (or
applicable portion thereof) and of performance of such Person under this
Agreement, or in the case of a Subservicer the applicable Subservicing
Agreement or primary servicing agreement, has been made under such
officers' supervision, and (ii) to the best of such officers' knowledge,
based on such review, such Person has fulfilled all its obligations
under this Agreement, or in the case of a Subservicer the applicable
Subservicing Agreement or primary servicing agreement, in all material
respects throughout such year (or applicable portion thereof), or, if
there has been a failure to fulfill any such obligation in any material
respect, specifying each such default known to such officers and the
nature and status thereof including the steps being taken by the
Servicer or Subservicer to remedy such default.
(ii) The Servicer shall indemnify and hold harmless the Issuer,
the Depositor, the Indenture Trustee, the Owner Trustee, the Trust
Administrator and the Master Servicer and their respective officers,
directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a
breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 4.04(e) for the
negligence, bad faith or willful misconduct of the Servicer in
connection therewith. If the indemnification provided for herein is
unavailable or insufficient to hold harmless any of the foregoing
parties, then the Servicer agrees that it shall contribute to the amount
paid or payable by the indemnified party or parties as a result of the
losses, claims, damages or liabilities of the indemnified party or
parties in such proportion as is appropriate to reflect the relative
fault of the indemnified party or
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parties on the one hand and the Servicer on the other in connection with
a breach of the Servicer's obligations under this Section 4.04(e) or the
Servicer's negligence, bad faith or willful misconduct in connection
therewith.
(f) Inspection. The Servicer shall provide the Indenture Trustee and the
Master Servicer, upon [five] Business Days' advance notice, during normal
business hours, access to all records maintained by the Servicer in respect of
its rights and obligations hereunder and reasonable access to officers of the
Servicer responsible for such obligations. Upon request, the Servicer shall
furnish to the Indenture Trustee and the Master Servicer its most recent
publicly available financial statements and such other information relating to
its capacity to perform its obligations under this Agreement. Notwithstanding
anything to the contrary in this Section 4.04, nothing in this Agreement shall
limit the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Servicer to provide access as provided in this Section 4.04(f) as a result of
such obligation shall not constitute a breach of this Section 4.04(f).
Section 4.05. Representations, Warranties and Agreements.
(a) Representations, Warranties and Agreements of the Servicer. The
Servicer, as a condition to the consummation of the transactions contemplated
hereby, hereby makes the following representations and warranties to the
Master Servicer, the Depositor, the Seller and the Indenture Trustee and the
Trust Administrator, as of the Closing Date:
(i) Due Organization and Authority. The Servicer is a corporation
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation and has all licenses necessary to
carry on its business as now being conducted; the Servicer has the full
corporate power and authority to execute and deliver this Agreement and
to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of transfer to
be delivered pursuant to this Agreement) by the Servicer and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Servicer (except to the extent bankruptcy,
insolvency, reorganization, fraudulent conveyance or similar laws affect
the enforcement of creditor's rights generally) and all requisite
corporate action has been taken by the Servicer to make this Agreement
valid and binding upon the Servicer in accordance with its terms;
(ii) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course
of business of the Servicer;
(iii) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition of the servicing responsibilities by the
Servicer or the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement, will (a)
conflict with or result in a breach of any of the terms, conditions or
provisions of the Servicer's charter or by-laws or any legal restriction
or constitute a default under any of the foregoing, (b) materially
conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the
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terms of any other agreement or instrument to which the Servicer is a
party or by which it may be bound, (c) result in a material violation of
any law, rule, regulation, order, judgment or decree to which the
Servicer or its property is subject or (d) materially impair the ability
of the Servicer to act as Servicer hereunder with respect to the
Mortgage Loans;
(iv) Ability to Perform. The Servicer does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement;
(v) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the Servicer's knowledge, threatened
against the Servicer which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Servicer,
or in any material impairment of the right or ability of the Servicer to
carry on its business substantially as now conducted, or in any material
liability on the part of the Servicer, or which would draw into question
the validity of this Agreement or of any action taken or to be taken in
connection with the obligations of the Servicer contemplated herein, or
which would be likely to impair materially the ability of the Servicer
to perform under the terms of this Agreement;
(vi) No Consent Required. No consent, approval, authorization or
order of any court or governmental agency or body is required for the
execution, delivery and performance by the Servicer of or compliance by
the Servicer with this Agreement, or if required, such approval has been
obtained prior to the Closing Date;
(vii) No Default. The Servicer is not in default, and no event or
condition exists that after the giving of notice or lapse of time or
both, would constitute an event of default under any material mortgage,
indenture, contract, agreement, judgment, or other undertaking, to which
the Servicer is a party or which purports to be binding upon it or upon
any of its assets, which default could impair materially the ability of
the Servicer to perform under the terms of this Agreement;
(viii) Ability to Service. The Servicer is an FHA Approved
Mortgagee in good standing to service mortgages, and has not been
suspended as a mortgagee or servicer by the FHA and has the facilities,
procedures and experienced personnel necessary for the sound servicing
of mortgage loans of the same type as the Mortgage Loans. No event has
occurred, including but not limited to a change in insurance coverage,
which would make the Servicer unable to comply with HUD, FHA eligibility
requirements or which would require notification to any of HUD or FHA;
(ix) No Untrue Information. Neither this Agreement nor any
statement, report or other document furnished or to be furnished
pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
contained therein not misleading; and
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(x) No Commissions to Third Parties. The Servicer has not dealt
with any broker or agent or anyone else who might be entitled to a fee
or commission in connection with this transaction other than the Seller.
(b) Remedies for Breach of Representations and Warranties of the
Servicer. It is understood and agreed that the representations and warranties
set forth in Sections 4.05(a) shall survive the engagement of the Servicer to
perform the servicing responsibilities as of the Closing Date hereunder and
the delivery of the Servicing Files to the Servicer and shall inure to the
benefit of the Master Servicer and the Indenture Trustee. Upon discovery by
the Servicer, the Master Servicer or the Indenture Trustee of a breach of any
of the foregoing representations and warranties which materially and adversely
affects the ability of the Servicer to perform its duties and obligations
under this Agreement or otherwise materially and adversely affects the value
of the Mortgage Loans, the Mortgaged Property or the priority of the security
interest on such Mortgaged Property or the interests of the Master Servicer or
the Indenture Trustee, the party discovering such breach shall give prompt
written notice to the other parties.
Within [60] days of the earlier of either discovery by or notice
to the Servicer of any breach of a representation or warranty set forth in
Section 4.05(a) which materially and adversely affects the ability of the
Servicer to perform its duties and obligations under this Agreement or
otherwise materially and adversely affects the value of the Mortgage Loans,
the Mortgaged Property or the priority of the security interest on such
Mortgaged Property, the Servicer shall use its best efforts promptly to cure
such breach in all material respects and, if such breach cannot be cured, the
Servicer shall, at the Indenture Trustee's or the Master Servicer's option,
assign its rights and obligations under this Agreement (or with respect to the
affected Mortgage Loans) to a successor servicer. Such assignment shall be
made in accordance with Sections 4.06(b) and 4.06(c).
In addition, the Servicer shall indemnify all other parties to
this Agreement and hold each of them harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from, a
breach of the Servicer's representations and warranties contained in Section
4.05.
Any cause of action against the Servicer relating to or arising
out of the breach of any representations and warranties made in Section
4.05(a) shall accrue upon (i) discovery of such breach by the Servicer or
notice thereof by the Master Servicer, the Depositor or the Indenture Trustee
to the Servicer, (ii) failure by the Servicer to cure such breach within the
applicable cure period, and (iii) demand upon the Servicer by the Master
Servicer or the Indenture Trustee for compliance with this Agreement.
(c) Additional Indemnification by the Servicer. The Servicer shall
indemnify the Master Servicer, the Depositor, the Issuer, the Indenture
Trustee, the Owner Trustee, and the Trust Administrator and hold each of them
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses (collectively, the "Liabilities") that
the indemnified party may sustain in any way related to the failure of the
Servicer to perform its duties and service the Mortgage Loans in accordance
with the terms of this Agreement. The Servicer shall immediately
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notify the Master Servicer, the Depositor, the Indenture Trustee, the Owner
Trustee and the Trust Administrator if a claim is made by a third party with
respect to this Agreement or the Mortgage Loans that may result in such
Liabilities, and the Servicer shall assume (with the prior written consent of
the indemnified party) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or any
indemnified party in respect of such claim and follow any written instructions
received from such indemnified party in connection with such claim. The
Servicer shall be reimbursed promptly from the Trust Fund for all amounts
advanced by it pursuant to the preceding sentence except when the claim is in
any way related to the Servicer's indemnification pursuant to this Section
4.05(c), or the failure of the Servicer to service and administer the Mortgage
Loans in accordance with the terms of this Agreement.
Section 4.06. The Servicer.
(a) Merger or Consolidation of the Servicer. The Servicer shall keep in
full effect its existence, rights and franchises as a corporation, and shall
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 or any of the
Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Servicer shall be a party, or any Person succeeding to the business
of the Servicer, shall be the successor of the Servicer 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, provided,
however, that the successor or surviving Person shall be an institution (i)
having a net worth of not less than $[15,000,000], and (ii) which is a FHA
Approved Mortgagee in good standing.
As a condition to the effectiveness of any merger or
consolidation, at least 15 calendar days prior to the effective date of any
merger or consolidation of the Servicer, the Servicer shall provide (x)
written notice to the Depositor and the Master Servicer of any successor
pursuant to this Section and (y) in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K.
(b) Limitation on Liability of the Servicer and Others. Neither the
Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Master Servicer, the Depositor,
the Issuer, the Indenture Trustee or the Trust Administrator for any action
taken or for refraining from the taking of any action in good faith pursuant
to this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Servicer or any such person against any breach
of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of any
breach of the terms and conditions of this Agreement (except to the extent
otherwise covered by Section 4.05(c)). The Servicer and any director, officer,
employee or agent of the 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. The Servicer shall not be under any obligation
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to appear in, prosecute or defend any legal action which is not incidental to
its duties to service the Mortgage Loans in accordance with this Agreement and
which in its opinion may involve it in any expense or liability; provided,
however, that the Servicer may undertake any such action which it may deem
necessary or desirable in respect of this Agreement and the rights and duties
of the parties hereto. In such event, the Servicer shall be entitled to
reimbursement from the Trust Fund for the reasonable legal expenses and costs
of such action.
The Servicer and any director, officer, employee or agent of the
Servicer shall be indemnified and held harmless by the Trust against any and
all Liabilities incurred in connection with any legal action relating to this
Agreement or the Notes, except to the extent such Liabilities resulted from or
arose out of the negligence, bad faith or willful misfeasance in the
performance of the Servicer's (or any director, officer, employee or agent of
the Servicer) duties hereunder or by reason of its reckless disregard of its
obligations and duties hereunder.
(c) Limitation on Resignation and Assignment by the Servicer. This
Agreement has been entered into with the Servicer in reliance upon the
independent status of the Servicer, and the representations as to the adequacy
of its servicing facilities, plant, personnel, records and procedures,
integrity, reputation and financial standing, and the continuance thereof.
Therefore, except as expressly provided in this Section 4.06(c) and in
Sections 4.02(a) and 4.09, the Servicer shall neither assign its rights under
this Agreement or the servicing hereunder nor delegate its duties hereunder or
any portion thereof, or sell or otherwise dispose of all or substantially all
of its property or assets without, in each case, the prior written consent of
the Seller, the Master Servicer and the Trust Administrator, which consent, in
the case of an assignment of rights or delegation of duties, shall be granted
or withheld in the discretion of the Seller, the Master Servicer and the Trust
Administrator; provided, that in each case, there must be delivered to the
Seller, the Master Servicer, the Indenture Trustee and the Trust Administrator
a letter from each Rating Agency to the effect that such transfer of servicing
or sale or disposition of assets will not result in a qualification,
withdrawal or downgrade of the then-current rating of any of the Notes.
The Servicer shall not resign from the obligations and duties
hereby imposed on it except by mutual consent of the Servicer and the Master
Servicer, or upon the determination that its duties hereunder are no longer
permissible under applicable law and such incapacity cannot be cured by the
Servicer. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Seller, the Master Servicer and the Indenture Trustee which Opinion of Counsel
shall be in form and substance reasonably acceptable to each of them. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided
in Section 4.08 and the Depositor shall have received the information
described in the following sentence. As a condition to the effectiveness of
any such resignation, at least 15 calendar days prior to the effective date of
such resignation, the Servicer shall provide (x) written notice to the
Depositor of any successor pursuant to this Section and (y) in writing and in
form and substance reasonably satisfactory to the Depositor, all information
reasonably requested by the Depositor in order to comply with its reporting
obligation under Item 6.02 of Form 8-K with respect to a successor Master
Servicer.
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Without in any way limiting the generality of this Section 4.06,
in the event that the Servicer either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof or sell or otherwise dispose of all or substantially all of
its property or assets, except to the extent permitted by and in accordance
with this Section 4.06 and in Sections 4.02(a) and 4.09, without the prior
written consent of the Seller, the Master Servicer, the Indenture Trustee and
the Trust Administrator, then such parties shall have the right to terminate
this Agreement upon notice given as set forth in Section 4.07, without any
payment of any penalty or damages and without any liability whatsoever to the
Servicer or any third party.
(d) Successor Servicers. The provisions of Sections 4.06(a), (b), and
(c) shall apply to any successor to the Servicer hereunder.
Section 4.07. Termination for Cause.
Any of the following occurrences shall constitute an event of
default (each, a "Servicer Event of Default") on the part of the Servicer:
(1) any failure by the Servicer to remit to
the Master Servicer any payment required to be made
under the terms of this Agreement which continues
unremedied for a period of [two] Business Days after
the date upon which written notice of such failure,
requiring the same to be remedied, shall have been
given to the Servicer by the Master Servicer; or
(2) failure by the Servicer duly to observe or
perform in any material respect any other of the
covenants or agreements on the part of the Servicer
set forth in this Agreement (except with respect to
a failure related to a Limited Exchange Act
Reporting Obligation) which continues unremedied for
a period of [30] days after the date on which
written notice of such failure, requiring the same
to be remedied, shall have been given to the
Servicer by the Master Servicer; provided that the
[thirty-day] cure period shall not apply to the
failure to comply with the requirements set forth in
Section 4.04(e), Section 4.06(a) (with respect to
notice to the Depositor), Section 4.06(c) (with
respect to notice to the Depositor) or Article XI,
for which the grace period shall not exceed the
lesser of 10 calendar days or such period in which
the applicable Exchange Act Report can be filed
timely (without taking into account any extensions);
or
(3) failure by the Servicer to maintain its
license to do business or service residential
mortgage loans in any jurisdiction where the
Mortgaged Properties are located except where the
failure to so maintain such license does not have a
material adverse effect on the Servicer's ability to
service the Mortgage Loans; or
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(4) a decree or order of a court or agency or
supervisory authority having jurisdiction for the
appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt,
including bankruptcy, marshalling of assets and
liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have
been entered against the Servicer and such decree or
order shall have remained in force undischarged or
unstayed for a period of [60] days; or
(5) the Servicer shall consent to the
appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or
relating to all or substantially all of its
property; or
(6) the Servicer shall admit in writing its
inability to pay its debts generally as they become
due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization
statute, make an assignment for the benefit of its
creditors, voluntarily suspend payment of its
obligations or cease its normal business operations
for [three] Business Days; or
(7) the Servicer ceases to be a FHA Approved
Mortgagee; or
(8) the Servicer attempts to assign the
servicing of the Mortgage Loans or its right to
servicing compensation hereunder or the Servicer or
attempts to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties
hereunder or any portion thereof in a manner not
permitted under this Agreement; or
(9) the net worth of the Servicer shall be
less than $[15,000,000]; or
(10) failure by the Servicer to duly perform,
within the required time period, its obligations
under Section 4.04(e) or 4.04(d) which failure
continues unremedied for a period of [7] days after
the date on which written notice of such failure,
requiring the same to be remedied, shall have been
given to the Servicer by the Master Servicer.
In each and every such case, so long as a Servicer Event of
Default shall not have been remedied, in addition to whatsoever rights the
Master Servicer or the Indenture Trustee may have at law or equity to damages,
including injunctive relief and specific performance, the Master Servicer, by
notice in writing to the Servicer and the Depositor, may terminate all the
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rights and obligations of the Servicer under this Agreement and in and to the
servicing contract established hereby and the proceeds thereof; provided that
in the event of a Servicer Event of Default related to the obligations set
forth in Section 4.04(e), Section 4.06(a) (with respect to notice to the
Depositor), Section 4.06(c) (with respect to notice to the Depositor) and
Article XI, the Servicer may only be terminated at the direction of the
Depositor.
Upon receipt by the Servicer of such written termination notice,
all authority and power of the Servicer, under this Agreement, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in a
successor servicer appointed by the Master Servicer, in accordance with
Section 4.08(a). Upon written request from the Master Servicer, the Servicer
shall prepare, execute and deliver to the successor servicer any and all
documents and other instruments, place in such successor's possession all
Servicing Files, and do or cause to be done all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, including
but not limited to the transfer and endorsement or assignment of the Mortgage
Loans and related documents, at the Servicer's sole expense. The Servicer
shall cooperate with the Seller, the Master Servicer, the Indenture Trustee
and such successor in effecting the termination of the Servicer's
responsibilities and rights hereunder, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Servicer to the Custodial Account or
Escrow Account or thereafter received with respect to the Mortgage Loans.
By a written notice, the Master Servicer may waive any default by
the Servicer in the performance of its obligations hereunder and its
consequences. Upon any waiver of a past default, such default shall cease to
exist, and any Servicer Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived.
The Depositor shall not be entitled to terminate the rights and
obligations of the Servicer pursuant to subparagraph (2) if a failure of the
Servicer to identify a Subcontractor "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB was attributable solely to
the role or functions of such Subcontractor with respect to mortgage loans
other than the Mortgage Loans.
Section 4.08. Successor to Servicer, Miscellaneous Provisions.
(a) Successor to the Servicer. Simultaneously with the termination of
the Servicer's responsibilities and duties under this Agreement pursuant to
Section 4.05, 4.06, or 4.07, the Master Servicer shall (i) within [90] days of
the Servicer's notice of such termination, succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set forth in
clauses (i) and (ii) of the second paragraph of Section 4.06(a) and which
shall succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement simultaneously with the
termination of the Servicer's responsibilities, duties and liabilities under
this Agreement. Any successor to the Servicer (other than the Master Servicer)
shall be subject to the approval of the Master Servicer and the Trust
Administrator. Any approval of a successor servicer by the Master Servicer and
the Trust Administrator, shall, if the successor servicer is not at that time
a
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servicer of other Mortgage Loans for the Trust, be conditioned upon the
receipt by the Master Servicer, the Seller, the Indenture Trustee and the
Trust Administrator of a letter from each Rating Agency to the effect that
such transfer of servicing will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Notes. At least 15 calendar
days prior to the effective date of any such appointment, (x) the Master
Servicer shall provide written notice to the Depositor of such successor
pursuant to this Section 4.08 and (y) such successor servicer shall provide to
the Depositor in writing and in form and substance reasonably satisfactory to
the Depositor, all information reasonably requested by the Depositor in order
to comply with its reporting obligation under Item 6.02 of Form 8-K with
respect to a successor servicer. In the event that the Master Servicer assumes
the duties of the Servicer as set forth herein, the Master Servicer shall
provide the Depositor in writing and in form and substance reasonably
satisfactory to the Depositor, all information reasonably requested by the
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to a successor servicer. In connection with such
appointment and assumption, the Master Servicer may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of that permitted the Servicer under this Agreement. In the event
that the Servicer's duties, responsibilities and liabilities under this
Agreement should be terminated pursuant to the aforementioned sections, the
Servicer shall discharge such duties and responsibilities during the period
from the date it acquires knowledge of such termination until the effective
date thereof with the same degree of diligence and prudence which it is
obligated to exercise under this Agreement (including continuing to make
Advances during such transition period pursuant to Section 4.03(c)) and shall
take no action whatsoever that might impair or prejudice the rights or
financial condition of its successor. The resignation or removal of the
Servicer pursuant to the aforementioned sections shall not become effective
until a successor shall be appointed pursuant to this Section 4.08(a) and
shall in no event relieve the Servicer of the representations and warranties
made pursuant to Sections 4.05 and the remedies available to the Master
Servicer, the Indenture Trustee and the Seller under Sections 4.08(b) and
4.05(b) and (c), it being understood and agreed that the provisions of such
Sections 4.08(b) and 4.05(b) and (c) shall be applicable to the Servicer
notwithstanding any such resignation or termination of the Servicer, or the
termination of this Agreement. Neither the Master Servicer, in its capacity as
successor servicer, nor any other successor servicer shall be responsible for
the lack of information and/or documents that it cannot otherwise obtain
through reasonable efforts.
Within a reasonable period of time, but in no event later than
[30] days following the appointment of a successor entity, the Servicer shall
prepare, execute and deliver to the successor entity any and all documents and
other instruments, place in such successor's possession all Servicing Files,
and do or cause to be done all other acts or things necessary or appropriate
to effect the purposes of such notice of termination, including but not
limited to the transfer of any Mortgage Notes and the related documents. The
Servicer shall cooperate with the Indenture Trustee, the Master Servicer or
the Seller, as applicable, and such successor in effecting the termination of
the Servicer's responsibilities and rights hereunder and the transfer of
servicing responsibilities to the successor Servicer, including without
limitation, the transfer to such successor for administration by it of all
cash amounts which shall at the time be credited by the Servicer to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.
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Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Indenture Trustee, the Servicer, the Master
Servicer, the Trust Administrator and the Seller an instrument (i) accepting
such appointment, wherein the successor shall make the representations and
warranties set forth in Section 4.05(a) and provide for the same remedies set
forth in such Section herein and (ii) an assumption of the due and punctual
performance and observance of each covenant and condition to be performed and
observed by the Servicer under this Agreement, whereupon such successor shall
become fully vested with all the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer, with like effect as if originally
named as a party to this Agreement. Any termination or resignation of the
Servicer or termination of this Agreement pursuant to Sections 4.05, 4.06 and
4.07 shall not affect any claims that the Seller, the Master Servicer, the
Indenture Trustee or the Trust Administrator may have against the Servicer
arising out of the Servicer's actions or failure to act prior to any such
termination or resignation.
The Servicer shall deliver promptly to the successor servicer the
funds in the Custodial Account and Escrow Account(s) and all Mortgage Loan
documents and related documents and statements held by it hereunder and the
Servicer shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more
fully and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, it shall
notify the Indenture Trustee, the Trust Administrator, the Seller and Master
Servicer and the Depositor of such appointment.
(b) Costs. The Seller shall pay the legal fees and expenses of its
attorneys. Costs and expenses incurred in connection with the transfer of the
servicing responsibilities, including fees for delivering Servicing Files,
shall be paid by (i) the terminated or resigning Servicer if such termination
or resignation is a result of an occurrence of a termination event under
Section 4.05(b) or 4.07, and (ii) to the extent not paid by such Servicer, and
in all other cases, by the Trust.
Section 4.09. Sub-Servicers and Sub-Servicing Agreements.
(a) The Servicer may enter into sub-servicing agreements for any
servicing and administration of Mortgage Loans with any institution that is
acceptable to the Seller and that is in compliance with the laws of each state
necessary to enable it to perform its obligations under such sub-servicing
agreement. The Servicer shall give notice to the Rating Agencies and the
Master Servicer of the appointment of any sub-servicer. The Servicer shall not
enter into any sub-servicing agreement that does not provide for the servicing
of the Mortgage Loans specified therein on a basis consistent with the terms
of this Agreement or that otherwise violates the provisions of this Agreement.
The Servicer may enter into, and make amendments to, any sub-servicing
agreement or enter into different forms of sub-servicing agreements; provided,
however, that any such amendments or forms shall be consistent with and not
violate the provisions of this Agreement.
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(b) For purposes of this Agreement the Servicer shall be deemed to have
received payments on Mortgage Loans when any sub-servicer has received such
payments. With respect to the Servicer's obligations under Section 4.03(a) to
make deposits in the Custodial Account maintained by the Servicer, the
Servicer shall be deemed to have made such deposits when any sub-servicer has
made such deposits into a sub-servicing account if permitted by the related
sub-servicing agreement.
(c) Any sub-servicing agreement and any other transactions or services
relating to the Mortgage Loans involving a sub-servicer shall be deemed to be
between the sub-servicer and the Servicer alone and the Master Servicer and
the Indenture Trustee shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to any
sub-servicer, except that the Indenture Trustee shall have such claims or
rights that arise as a result of any funds held by a sub-servicer in trust for
or on behalf of the Issuer. Notwithstanding the execution of any sub-servicing
agreement, the Servicer shall not be relieved of any liability hereunder and
shall remain obligated and liable for the servicing and administration of the
Mortgage Loans.
(d) The Servicer shall be entitled to terminate any sub-servicing
agreement and the rights and obligations of any sub-servicer pursuant to any
sub-servicing agreement in accordance with the terms and conditions of such
sub-servicing agreement but only with the prior consent of the Seller. In the
event of termination of any sub-servicer, all servicing obligations of such
sub-servicer shall be assumed simultaneously by the Servicer without any act
or deed on the part of such sub-servicer or the Servicer, and the Servicer
either shall service directly the related Mortgage Loans or shall enter into a
sub-servicing agreement with a successor sub-servicer. The Servicer shall give
written notice to the Seller, Master Servicer and Indenture Trustee of the
termination of any sub-servicer.
(e) Any sub-servicing agreement shall include the provision that such
agreement may be immediately terminated by the Master Servicer or the
Indenture Trustee, in accordance with the terms of this Agreement, in the
event that the Servicer shall, for any reason, no longer be the Servicer
(including termination due to a Servicer Event of Default) (i) without fee or
(ii) clearly and unambiguously states that any termination fee is the sole
responsibility of the Servicer and none of the Seller, Depositor, Master
Servicer, Indenture Trustee or the Issuer has any liability therefor,
regardless of the circumstances surrounding such termination.
Section 4.10. Miscellaneous Servicing Provisions.
(a) Protection of Confidential Information. The Servicer shall keep
confidential and shall not divulge to any party, without the Seller's prior
written consent, any nonpublic information pertaining to the Mortgage Loans or
any borrower thereunder, except to the extent that it is appropriate for the
Servicer to do so in working with legal counsel, special servicers, auditors,
taxing authorities or other governmental agencies.
(b) No Personal Solicitation. For as long as the Servicer services the
Mortgage Loans, it covenants that it will not, and that it will ensure that
its affiliates and agents will not, directly solicit or provide information
for any other party to solicit for prepayment or refinancing of any of the
Mortgage Loans by the related mortgagors. It is understood that promotions
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undertaken by the Servicer which are directed to the general public at large,
or certain segments thereof, shall not constitute solicitation as that term is
used in this Section 4.10(b).
(c) Intention of the Parties. It is the intention of the Seller and the
Servicer that the Seller is conveying, and the Servicer is receiving, only a
contract for servicing the Mortgage Loans. Accordingly, the parties hereby
acknowledge that the Trust remains the sole and absolute owner of the Mortgage
Loans (other than the servicing rights) and all rights related thereto,
subject to the lien of the Indenture.
Section 4.11. Advance Facility.
(a) The Servicer is hereby authorized to enter into a facility (an
"Advance Facility") with any Person which provides that such Person (an
"Advancing Person") agrees to fund some or all of the Advances and/or
Servicing Advances required to be made by the Servicer pursuant to this
Agreement or that the Servicer may pledge or assign its rights to be
reimbursed for Advances and/or Servicing Advances, directly or indirectly, to
an Advancing Person, although no such Advance Facility shall reduce or
otherwise affect the Servicer's obligation to fund such Advances and/or
Servicing Advances. If the Servicer enters into an Advance Facility, the
Servicer and the related Advancing Person shall deliver to the Indenture
Trustee, the Master Servicer and the Trust Administrator at the respective
addresses set forth in Section 10.07 hereof a written notice (an "Advance
Facility Notice"), stating the identity of the Advancing Person. If the
Servicer enters into such an Advance Facility pursuant to this Section 4.11,
upon reasonable request of the Advancing Person, the Trust Administrator shall
execute a letter of acknowledgment prepared by the Servicer, confirming its
receipt of notice of the existence of such Advance Facility. To the extent
that an Advancing Person previously identified in the Advance Facility Notice
funds any Advance or any Servicing Advance and the Servicer provides the Trust
Administrator with an Officer's Certificate that such Advancing Person is
entitled to reimbursement, such Advancing Person shall be entitled to receive
reimbursement pursuant to this Agreement for such amount to the extent
provided in Section 4.11(c). Such Officer's Certificate must specify the
amount of the reimbursement, the remittance date, the written payment
instructions for the Advancing Person, the Section of this Agreement that
permits the applicable Advance or Servicing Advance to be reimbursed and
either the section(s) of the Advance Facility that entitle the Advancing
Person to receive reimbursement from the Trust Administrator, rather than the
Servicer, or proof of an event of default by the Servicer under the Advance
Facility entitling the Advancing Person to reimbursement from the Trust
Administrator. The Trust Administrator shall not have any duty or liability
with respect to any calculation of any reimbursement to be paid to an
Advancing Person and shall be entitled to conclusively rely without
independent investigation on the Officer's Certificate provided pursuant to
this Section 4.11. An Advancing Person whose obligations hereunder are limited
to the funding of Advances and/or Servicing Advances, or who merely receives
an assignment or pledge of the Servicer's rights to be reimbursed for Advances
and/or Servicing Advances, shall not be required to meet the qualifications of
the Servicer or any sub-servicer and will not be deemed to be a sub-servicer
under this Agreement.
(b) None of the Depositor, the Master Servicer, the Trust Administrator
or the Indenture Trustee shall, as a result of the existence of any Advance
Facility, have any additional duty or liability with respect to the
calculation or payment of any reimbursement for Advances or
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Servicing Advances, nor, as a result of the existence of any Advance Facility,
shall the Depositor, the Master Servicer, the Trust Administrator or the
Indenture Trustee have any additional responsibility to track or monitor the
administration of the Advance Facility or the reimbursement for Advances or
Servicing Advances, except, in the case of the Trust Administrator, to remit
reimbursements in accordance with payment instructions received pursuant to
Section 4.11(a). The Servicer shall indemnify the Depositor, the Master
Servicer, the Trust Administrator, the Indenture Trustee, any successor
Servicer and the Issuer for any claim, loss, liability or damage resulting
from any claim by the Advancing Person, except to the extent that such claim,
loss, liability or damage resulted from or arose out of the negligence,
recklessness or willful misconduct on the part of the Depositor, the Master
Servicer, the Trust Administrator, the Indenture Trustee, any successor
Servicer or the Issuer, as the case may be, or failure by the successor
Servicer, the Master Servicer or the Trust Administrator, as the case may be,
to remit funds as required by this Agreement or the commission of an act or
omission to act by the successor Servicer, the Master Servicer or the Trust
Administrator, as the case may be, and the passage of any applicable cure or
grace period, such that, in the case of the Master Servicer, a Master Servicer
Event of Default occurs under this Agreement, or in the case of the successor
Servicer, the Master Servicer or the Trust Administrator, such entity is
subject to termination for cause under this Agreement.
(c) If an Advance Facility is entered into, and if the Servicer so
notifies the Trust Administrator, then the Servicer shall not seek
reimbursement for any Advance or Servicing Advance made by an Advancing Person
under Section 6.05, but instead the Servicer shall remit the amounts relating
to Advances to the Master Servicer for inclusion in the monthly remittance
made to the Trust Administrator on a Servicer Remittance Date in accordance
with this Agreement. The Trust Administrator, upon its receipt of an Officer's
Certificate in accordance with Section 4.11 hereof, shall pay to the Advancing
Person or to a trustee, agent or custodian designated in the Officer's
Certificate specified in Section 4.11(a), reimbursements for Advances and
Servicing Advances from the Collection Account to the same extent the Servicer
would have been permitted to reimburse itself from its Custodial Account for
such Advances and/or Servicing Advances in accordance with Sections 4.02(e)
and 6.05, had the Servicer itself funded such Advance or Servicing Advance.
(d) All Advances and Servicing Advances made pursuant to the terms of
this Agreement shall be deemed made and shall be reimbursed on a "first
in-first out" (FIFO) basis, such that an advance made earlier in time with
respect to any Mortgage Loan shall be reimbursed to the Servicer who made that
advance, before reimbursement of an advance made later in time with respect to
that Mortgage Loan, and a predecessor Servicer's advances with respect to any
particular Mortgage Loan shall be reimbursed before reimbursement of a
successor Servicer's advances with respect to such Mortgage Loan.
(e) In making its determination that any Advance or Servicing Advance
theretofore made has become a Nonrecoverable Advance, the Servicer shall apply
the same criteria in making such determination regardless of whether such
Advance or Servicing Advance shall have been made by the Servicer or any
predecessor Servicer.
(f) The Servicer shall maintain and provide to any successor Servicer
and, upon request, the Master Servicer, the Trust Administrator and the
Indenture Trustee a detailed
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accounting on a loan-by-loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in
such information.
(g) Any amendment to this Section 4.11 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 4.11, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the parties hereto without the consent of any Noteholder, provided
that such amendment complies with Section 10.03. All reasonable costs and
expenses (including attorneys' fees) of each party hereto of any such
amendment shall be borne solely by the Servicer. The parties hereto hereby
acknowledge and agree that: (a) the Advances and/or Servicing Advances
financed by and/or pledged to an Advancing Person under any Advance Facility
are obligations owed to the Servicer payable only from the cash flows and
proceeds received under this Agreement for reimbursement of Advances and/or
Servicing Advances only to the extent provided herein, and the Indenture
Trustee, the Owner Trustee, the Trust Administrator, the Master Servicer and
the Issuer are not, as a result of the existence of any Advance Facility,
separately obligated or liable to repay any Advances and/or Servicing Advances
financed by the Advancing Person; (b) the Servicer will be responsible for
remitting to the Advancing Person the applicable amounts collected by it as
reimbursement for Advances and/or Servicing Advances funded by the Advancing
Person, subject to the provisions of this Agreement and except to the extent
an election is made to remit all such reimbursements to the Trust
Administrator as described in Section 4.11(c); and (c) none of the Master
Servicer, the Trust Administrator and the Indenture Trustee shall have any
responsibility to track or monitor the administration of the financing
arrangement between the Servicer and any Advancing Person.
ARTICLE V
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER AND THE TRUST ADMINISTRATOR
Section 5.01. Duties of the Master Servicer; Representations and
Warranties.
(a) For and on behalf of the Issuer, the Indenture Trustee and the
Noteholders, the Master Servicer shall master service the Mortgage Loans from
and after the Closing Date in accordance with the provisions of this Article
V. The Master Servicer hereby represents and warrants to the Depositor, the
Issuer, the Indenture Trustee, the Trust Administrator and the Servicer, as of
the Closing Date, that:
(i) it is validly existing and in good standing as a
_____________________ and as Master Servicer has full power and
authority to transact any and all business contemplated by this
Agreement and to execute, deliver and comply with its obligations under
the terms of this Agreement, the execution, delivery and performance of
which have been duly authorized by all necessary corporate action on the
part of the Master Servicer;
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(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order
to which it is subject or (C) constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default)
under, or result in the breach of, any material contract, agreement or
other instrument to which the Master Servicer is a party or by which it
is bound or to which any of its assets are subject, which violation,
default or breach would materially and adversely affect the Master
Servicer's ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
in general, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any
order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency to the extent that any such
default would materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any
agreement or instrument or subject to any charter provision, bylaw or
any other corporate restriction or any judgment, order, writ,
injunction, decree, law or regulation that may materially and adversely
affect its ability as Master Servicer to perform its obligations under
this Agreement or that requires the consent of any third person to the
execution of this Agreement or the performance by the Master Servicer of
its obligations under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage
loans, is a ▇▇▇▇▇▇ ▇▇▇- or FHLMC-approved seller/servicer;
(viii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of or compliance by the Master
Servicer with this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations and orders (if any) as have been obtained;
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer;
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(x) the Master Servicer has obtained an Errors and Omissions
Insurance Policy and a Fidelity Bond in accordance with Section 5.02
each of which is in full force and effect, and each of which provides at
least such coverage as is required hereunder; and
(xi) the information about the Master Servicer under the heading
"The Master Servicer" in the Prospectus Supplement does not include an
untrue statement of a material fact and does not omit to state a
material fact, with respect to the statements made, necessary in order
to make the statements in light of the circumstances under which they
were made not misleading.
(b) It is understood and agreed that the representations and warranties
set forth in this Section 5.01 shall survive the execution and delivery of
this Agreement. The Master Servicer shall indemnify the Depositor, the Issuer,
the Indenture Trustee, the Owner Trustee, the Trust Administrator and the
Servicer and hold them harmless against any loss, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Master Servicer's
representations and warranties contained in this Section 5.01. It is
understood and agreed that the enforcement of the obligation of the Master
Servicer set forth in this Section to indemnify the foregoing parties as
provided in this Section constitutes the sole remedy (other than as set forth
in Section 8.01) of such parties respecting a breach of the foregoing
representations and warranties. Such indemnification shall survive any
termination of the Master Servicer as Master Servicer hereunder, and any
termination of this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by the Depositor, the
Issuer, the Indenture Trustee, the Trust Administrator or the Servicer or
notice thereof by any one of such parties to the other parties.
Notwithstanding anything in this Agreement to the contrary, the Master
Servicer shall not be liable for special, indirect or consequential losses or
damages of any kind whatsoever (including, but not limited to, lost profits).
Section 5.02. Master Servicer Fidelity Bond and Master Servicer Errors
and Omissions Insurance Policy.
(a) The Master Servicer, at its expense, shall maintain in effect a
Fidelity Bond and a Errors and Omissions Insurance Policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
the Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The Master
Servicer's Errors and Omissions Insurance Policy and the Master Servicer
Fidelity Bond shall be in such form and amount that would be consistent with
coverage customarily maintained by master servicers of mortgage loans similar
to the Mortgage Loans and shall by its terms not be cancelable without
[thirty] days' prior written notice to the Indenture Trustee. The Master
Servicer shall provide the Depositor and the Indenture Trustee, upon request,
with a copy of such policy and fidelity bond. The Master Servicer shall (i)
require the Servicer to maintain an Errors and Omissions Insurance Policy and
a Fidelity Bond in accordance with the provisions of Section 4.02(m) of this
Agreement, (ii) cause the Servicer to provide to the Master Servicer
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certificates evidencing that such policy and bond is in effect and to furnish
to the Master Servicer any notice of cancellation, non-renewal or modification
of the policy or bond received by it, as and to the extent provided in Section
4.02(m) of the Agreement, and (iii) furnish copies of such policies and of the
certificates and notices referred to in clause (ii) to the Indenture Trustee
upon request.
(b) The Master Servicer shall promptly report to the Indenture Trustee
and the Trust Administrator any material changes that may occur in the Master
Servicer's Fidelity Bond or the Master Servicer's Errors and Omissions
Insurance Policy and shall furnish either such party, on request, with
certificates evidencing that such bond and insurance policy are in full force
and effect. The Master Servicer shall promptly report to the Indenture Trustee
and the Trust Administrator all cases of embezzlement or fraud, if such events
involve funds relating to the Mortgage Loans. The total losses, regardless of
whether claims are filed with the applicable insurer or surety, shall be
disclosed in such reports together with the amount of such losses covered by
insurance. If a bond or insurance claim report is filed with any of such
bonding companies or insurers, the Master Servicer shall promptly furnish a
copy of such report to the Indenture Trustee and the Trust Administrator. Any
amounts relating to the Mortgage Loans collected by the Master Servicer under
any such bond or policy shall be promptly remitted by the Master Servicer to
the Trust Administrator for deposit into the Collection Account. Any amounts
relating to the Mortgage Loans collected by the Servicer under any such bond
or policy shall be remitted to the Master Servicer.
Section 5.03. Master Servicer's Financial Statements and Related
Information. For each year this Agreement is in effect, the Master Servicer
shall deliver to the Trust Administrator, the Indenture Trustee, each Rating
Agency and the Depositor a copy of its annual unaudited financial statements
on or prior to May 31 of each year, beginning May 31, 200_. Such financial
statements shall include a balance sheet, income statement, statement of
retained earnings, statement of additional paid in capital, statement of
changes in financial position and all related notes and schedules and shall be
in comparative form, certified by a nationally recognized firm of Independent
Accountants to the effect that such statements were examined and prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with that of the preceding year.
Section 5.04. Power to Act; Procedures.
(a) The Master Servicer shall master service the Mortgage Loans,
provided that the Master Servicer shall not take, or knowingly permit the
Servicer to take, any action that is inconsistent with or prejudices the
interests of the Issuer, the Indenture Trustee or the Noteholders in any
Mortgage Loan or the rights and interests of the Depositor, the Issuer, the
Indenture Trustee and the Noteholders under this Agreement and the Indenture.
The Master Servicer shall represent and protect the interests of the Issuer,
the Indenture Trustee and the Noteholders in the same manner as it protects
its own interests in mortgage loans in its own portfolio in any claim,
proceeding or litigation regarding a Mortgage Loan. Without limiting the
generality of the foregoing, the Master Servicer in its own name, and the
Servicer, to the extent such authority is delegated to such Servicer under
this Agreement, is hereby authorized and empowered by the Indenture Trustee
when the Master Servicer or such Servicer, as the case may be, believes it
appropriate in its best judgment and in accordance with the Servicing
Standard, to
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execute and deliver, on behalf of itself and the Noteholders, the Trust
Administrator, the Indenture Trustee or any of them, any and all instruments
of satisfaction or cancellation, or of partial or full release or discharge
and all other comparable instruments, with respect to the Mortgage Loans and
with respect to the Mortgaged Properties. The Indenture Trustee shall furnish
the Master Servicer, upon request, with any powers of attorney (on the
standard form used by the Indenture Trustee) empowering the Master Servicer or
the 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 this Agreement, and the Indenture Trustee shall
execute and deliver such other documents as the Master Servicer may request,
necessary or appropriate to enable the Master Servicer to master service the
Mortgage Loans and carry out its duties hereunder, and to allow the Servicer
to service the Mortgage Loans in each case in accordance with the Servicing
Standard (and the Indenture Trustee or the Trust Administrator shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
the Servicer). If the Master Servicer or the Indenture 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 Indenture Trustee or
that the Indenture Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, then
upon request of the Indenture Trustee, the Master Servicer shall join with the
Indenture Trustee in the appointment of a co-trustee pursuant to Section 6.10
of the Indenture. In no event shall the Master Servicer, without the Indenture
Trustee's written consent: (i) initiate any action, suit or proceeding solely
under the Indenture Trustee's name without indicating the Master Servicer's
representative capacity or (ii) take any action with the intent to cause, and
which actually does cause, the Indenture Trustee to be registered to do
business in any state. The Master Servicer shall indemnify the Indenture
Trustee for any and all costs, liabilities and expenses incurred by the
Indenture Trustee in connection with the negligent or willful misuse of such
powers of attorney by the Master Servicer. 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
Indenture Trustee, be deemed to be the agent of the Indenture Trustee.
(b) In master servicing and administering the Mortgage Loans, the Master
Servicer shall employ procedures and exercise the same care that it
customarily employs and exercises in master servicing and administering loans
for its own account, giving due consideration to the Servicing Standard where
such practices do not conflict with this Agreement. Consistent with the
foregoing, the Master Servicer may, and may permit the Servicer to, in its
discretion (i) waive any late payment charge and (ii) extend the due dates for
payments due on a Mortgage Note for a period not greater than [120] days;
provided, however, that the maturity of any Mortgage Loan shall not be
extended past the date on which the final payment is due on the latest
maturing Mortgage Loan as of the Cut-off Date. In the event of any extension
described in clause (ii) above, the Master Servicer shall make or cause the
Servicer to make Advances on the related Mortgage Loan in accordance with the
provisions of Section 4.03 on the basis of the amortization schedule of such
Mortgage Loan without modification thereof by reason of such extension.
Section 5.05. Enforcement of Servicer's and Master Servicer's
Obligations.
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(a) The Master Servicer shall not be required to (i) take any action
with respect to the servicing of any Mortgage Loan that the Servicer is not
required to take under this Agreement and (ii) cause the Servicer to take any
action or refrain from taking any action if this Agreement does not require
the Servicer to take such action or refrain from taking such action.
(b) The Master Servicer, for the benefit of the Issuer, the Indenture
Trustee and the Noteholders, shall enforce the obligations of the Servicer
hereunder, and shall, in the event that the Servicer fails to perform its
obligations in accordance herewith, terminate the rights and obligations of
the Servicer hereunder and either act as servicer of the related Mortgage
Loans or cause other parties hereto to either assume the obligations of the
Servicer under this Agreement (or agree to execute and deliver a successor
servicing or sub-servicing agreement with a successor servicer). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of servicing or sub-servicing rights 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, and shall
be reimbursed therefor initially (i) from a general recovery resulting from
such enforcement only to the extent, if any, that such recovery exceeds all
amounts due in respect of the related Mortgage Loans, (ii) from a specific
recovery of costs, expenses or attorneys' fees against the party against whom
such enforcement is directed, and then, (iii) to the extent that such amounts
are insufficient to reimburse the Master Servicer for the costs of such
enforcement, from the Collection Account.
Section 5.06. [Reserved]
Section 5.07. Collection Account.
(a) On the Closing Date, the Trust Administrator shall open and shall
thereafter maintain a segregated account held in trust in the name of the
Securities Intermediary (the "Collection Account"), entitled "Collection
Account, ____________________________________, as Indenture Trustee, in trust
for Holders of the ______ Mortgage Investment Trust 200_-__, Asset-Backed
Notes, Series 200_-__." The Collection Account shall relate solely to the
Notes issued by the Issuer, and funds deposited in the Collection Account
shall not be commingled with any other monies.
(b) The Collection Account shall be an Eligible Account. If an existing
Collection Account ceases to be an Eligible Account, the Trust Administrator
shall establish a new Collection Account that is an Eligible Account within
[10] days and transfer all funds and investment property on deposit in such
existing Collection Account into such new Collection Account.
(c) The Trust Administrator shall give to the Master Servicer and the
Indenture Trustee prior written notice of the name and address of the
depository institution at which the Collection Account is maintained and the
account number of such Collection Account. The Trust Administrator shall take
such actions as are necessary to cause the depository institution holding the
Collection Account to hold such account in the name of the Indenture Trustee.
On each Payment Date, the entire amount on deposit in the Collection Account
relating to the
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Mortgage Loans (subject to permitted withdrawals set forth in Section 5.08),
other than amounts not included in Interest Remittance Amount or Principal
Remittance Amount to be paid to Noteholders for such Payment Date, shall be
applied to make the requested payment of principal and/or interest on each
class of Notes.
(d) The Master Servicer shall deposit or cause to be deposited in the
Collection Account on the earlier of the applicable Payment Date and [one]
Business Day following receipt thereof, the following amounts received or
payments made by the Master Servicer (other than in respect of principal of
and interest on the Mortgage Loans due on or before the Cut-off Date):
(i) all remittances from the Custodial Account to the Master
Servicer pursuant to Section 4.03;
(ii) all Advances made by the Servicer or the Master Servicer
pursuant to Section 6.05 hereof and any payment in respect of Prepayment
Interest Shortfalls paid by the Master Servicer pursuant to Section 5.21
hereof; and
(iii) the Purchase Price of any Mortgage Loan repurchased by the
Depositor or the Seller during the related Prepayment Period or any
other Person and any Substitution Amount related to any Qualifying
Substitute Mortgage Loan.
(e) Funds in the Collection Account may be invested by the Trust
Administrator in Eligible Investments selected by and at the written direction
of the Trust Administrator, which shall mature not later than [one] Business
Day prior to the next Payment Date (or on the Payment Date with respect to any
Eligible Investment of the Trust Administrator or any other fund managed or
advised by it or any Affiliate) and any such Eligible Investment shall not be
sold or disposed of prior to its maturity. All such Eligible Investments shall
be made in the name of the Master Servicer in trust for the benefit of the
Indenture Trustee and the Noteholders. All income and gain realized from any
Eligible Investment shall be for the benefit of the Master Servicer and shall
be subject to its withdrawal or order from time to time, subject to Section
5.08 and shall not be part of the Trust Estate. The amount of any losses
incurred in respect of any such investments shall be deposited in such
Collection Account by the Master Servicer out of its own funds, without any
right of reimbursement therefor, immediately as realized. The foregoing
requirements for deposit in the Collection Account are exclusive, it being
understood and agreed that, without limiting the generality of the foregoing,
payments of interest on funds in the Collection Account and payments in the
nature of late payment charges, assumption fees and other incidental fees and
charges relating to the Mortgage Loans need not be deposited by the Master
Servicer in the Collection Account and may be retained by the Master Servicer
or the Servicer, as applicable, as additional servicing compensation. If the
Master Servicer deposits in the Collection Account any amount not required to
be deposited therein, it may at any time withdraw such amount from such
Collection Account.
Section 5.08. Application of Funds in the Collection Account. The Trust
Administrator may, from time to time, make, or cause to be made, withdrawals
from the Collection Account for the following purposes:
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(i) to reimburse the Master Servicer or the Servicer, as
applicable, for any previously unreimbursed Advances or Servicing
Advances made by any such party, such right to reimbursement pursuant to
this subclause (i) being limited to amounts received on or in respect of
a particular Mortgage Loan (including, for this purpose, Liquidation
Proceeds, Condemnation Proceeds, REO Disposition Proceeds and amounts
representing Insurance Proceeds with respect to the property subject to
the related Mortgage) which represent late recoveries (net of the
applicable Servicing Fee) of payments of principal or interest
respecting which any such Advance was made, it being understood, in the
case of any such reimbursement, that the Master Servicer's or Servicer's
right thereto shall be prior to the rights of the Noteholders;
(ii) to reimburse the Master Servicer or the Servicer following a
final liquidation of a Mortgage Loan for any previously unreimbursed
Advances made by any such party (A) that such party determines in good
faith will not be recoverable from amounts representing late recoveries
of payments of principal or interest respecting the particular Mortgage
Loan as to which such Advance was made or from Liquidation Proceeds,
Condemnation Proceeds, REO Disposition Proceeds or Insurance Proceeds
with respect to such Mortgage Loan and/or (B) to the extent that such
unreimbursed Advances exceed the related Liquidation Proceeds or
Insurance Proceeds, it being understood, in the case of each such
reimbursement, that the Master Servicer's or Servicer's right thereto
shall be prior to the rights of the Noteholders;
(iii) to reimburse the Master Servicer or the Servicer from
Liquidation Proceeds for Liquidation Expenses and for amounts expended
by it pursuant to Section 4.02(o) in good faith in connection with the
restoration of damaged property and, to the extent that Liquidation
Proceeds after such reimbursement exceed the unpaid principal balance of
the related Mortgage Loan, together with accrued and unpaid interest
thereon at the applicable Mortgage Rate less the applicable Servicing
Fee Rate and Master Servicing Fee Rate for such Mortgage Loan to the Due
Date next succeeding the date of its receipt of such Liquidation
Proceeds, to pay to the Master Servicer or the Servicer out of such
excess the amount of any unpaid assumption fees, late payment charges or
other Mortgagor charges on the related Mortgage Loan and to retain any
excess remaining thereafter as additional servicing compensation, it
being understood, in the case of any such reimbursement or payment, that
such Master Servicer's or Servicer's right thereto shall be prior to the
rights of the Noteholders;
(iv) to pay to the Depositor or the Seller or any other Person, as
applicable, with respect to each Mortgage Loan or REO Property acquired
in respect thereof that has been purchased pursuant to this Agreement,
all amounts received thereon and not paid on the date on which the
related repurchase was effected, and to pay to the applicable party any
Advances and Servicing Advances to the extent specified in the
definition of Purchase Price;
(v) to the extent not paid by the Servicer, to pay any Insurance
Premium with respect to a Mortgage Loan;
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(vi) to pay to the Master Servicer income earned on the investment
of funds on deposit in the Collection Account;
(vii) on each Payment Date, to make payment to the Noteholders in
the amounts and in the manner provided for in Section 6.02 for the
related Payment Date (to the extent collected by the Master Servicer or
the Servicer);
(viii) on each Payment Date, to make payment to the Ownership
Certificate, all Prepayment Premiums received during the immediately
preceding Prepayment Period;
(ix) to make payment to itself, the Master Servicer, the Servicer,
the Indenture Trustee, the Custodian, the Owner Trustee and others
pursuant to any provision of this Agreement, the Trust Agreement, the
Indenture or the Custodial Agreement;
(x) to withdraw funds deposited in error in the Collection
Account;
(xi) to clear and terminate the Collection Account pursuant to
Article IX; and
(xii) to reimburse a successor master servicer (solely in its
capacity as successor master servicer), for any fee or advance
occasioned by a termination of the Master Servicer, and the assumption
of such duties by the Indenture Trustee as successor master servicer or
a successor master servicer appointed by the Indenture Trustee pursuant
to Section 8.01, in each case to the extent not reimbursed by the
terminated Master Servicer, it being understood, in the case of any such
reimbursement or payment, that the right of the Master Servicer or the
Indenture Trustee thereto shall be prior to the rights of the
Noteholders.
In connection with withdrawals pursuant to subclauses (i) and (iv)
above, the Master Servicer's or the Servicer's or such other Person's
entitlement thereto is limited to collections or other recoveries on the
related Mortgage Loan. The Trust Administrator shall therefore keep and
maintain a separate accounting for each Mortgage Loan for the purpose of
justifying any withdrawal from the Collection Account it maintains pursuant to
such subclauses.
Section 5.09. Reports to Indenture Trustee and Noteholders.
(a) On each Payment Date, the Trust Administrator shall make available
to the Indenture Trustee and each Noteholder, a report setting forth the
following information (on the basis of Mortgage Loan level information
obtained from the Servicer):
(i) the aggregate amount of the payment to be made on such Payment
Date to the Holders of each Class of Notes, to the extent applicable,
allocable to principal on the Mortgage Loans, including Liquidation
Proceeds and Insurance Proceeds, stating separately the amount
attributable to scheduled principal payments and unscheduled payments in
the nature of principal;
(ii) the aggregate amount of the payment to be made on such
Payment Date to the Holders of each Class of Notes allocable to interest
and the calculation thereof;
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(iii) the amount, if any, of any payment to the Holder of the
Ownership Certificate;
(iv) (A) the aggregate amount of any Advances required to be made
by or on behalf of the Servicer (or the Master Servicer) with respect to
such Payment Date, (B) the aggregate amount of such Advances actually
made, and (C) the amount, if any, by which (A) above exceeds (B) above;
(v) the total number of Mortgage Loans, the aggregate Stated
Principal Balance of all the Mortgage Loans as of the close of business
on the last day of the related Collection Period, after giving effect to
payments allocated to principal reported under clause (i) above;
(vi) the Class Principal Amount of each Class of Notes, to the
extent applicable, as of such Payment Date after giving effect to
payments allocated to principal reported under clause (i) above;
(vii) the amount of all Prepayment Premiums distributed to the
Ownership Certificate;
(viii) the amount of any Realized Losses incurred with respect to
the Mortgage Loans (x) in the applicable Prepayment Period and (y) in
the aggregate since the Cut-off Date;
(ix) the amount of the Servicing Fee paid during the Collection
Period to which such payment relates;
(x) the number and aggregate Stated Principal Balance of Mortgage
Loans, as reported to the Trust Administrator by the Servicer, (a)
remaining outstanding, (b) delinquent 30 to 59 days on a contractual
basis, (c) delinquent 60 to 89 days on a contractual basis, (d)
delinquent 90 or more days on a contractual basis, (e) as to which
foreclosure proceedings have been commenced as of the close of business
on the last Business Day of the calendar month immediately preceding the
month in which such Payment Date occurs, (f) in bankruptcy and (g) that
are REO Properties;
(xi) the aggregate Stated Principal Balance of any Mortgage Loans
with respect to which the related Mortgaged Property became an REO
Property as of the close of business on the last Business Day of the
calendar month immediately preceding the month in which such Payment
Date occurs;
(xii) with respect to substitution of Mortgage Loans in the
preceding calendar month, the Stated Principal Balance of each Deleted
Mortgage Loan and of each Qualifying Substitute Mortgage Loan;
(xiii) the aggregate outstanding Basis Risk Shortfalls and Unpaid
Basis Risk Shortfalls, if any, for each Class of Notes, after giving
effect to the payments made on such Payment Date;
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(xiv) the Note Interest Rate applicable to such Payment Date with
respect to each Class of Notes;
(xv) the Interest Remittance Amount and the Principal Remittance
Amount applicable to such Payment Date;
(xvi) if applicable, the amount of any shortfall (i.e., the
difference between the aggregate amounts of principal and interest which
Noteholders would have received if there were sufficient available
amounts in the Collection Account and the amounts actually paid);
(xvii) any Overcollateralization Deficiency Amount after giving
effect to the payments made on such Payment Date; and
(xviii) LIBOR with respect to such Payment Date.
In the case of information furnished pursuant to subclauses (i), (ii)
and (vi) above, the amounts shall (except in the case of the report delivered
to the holder of the Ownership Certificate) be expressed as a dollar amount
per $[1,000] of original principal amount of Notes.
The Trust Administrator will make such report and additional loan level
information (and, at its option, any additional files containing the same
information in an alternative format) available each month to the Rating
Agencies and Noteholders via the Trust Administrator's website. The Trust
Administrator's website can be accessed at ______________. Assistance in using
the website can be obtained by calling the Trust Administrator's customer
service desk at ________________. Such parties that are unable to use the
website are entitled to have a paper copy mailed to them via first class mail
by notifying the Trust Administrator at ____________________,
________________________ (or for overnight deliveries at
_________________________), and indicating such. The Trust Administrator shall
have the right to change the way such statements are distributed in order to
make such distribution more convenient and/or more accessible to the above
parties and the Trust Administrator shall provide timely and adequate
notification to all above parties regarding any such changes.
The foregoing information and reports shall be prepared and determined
by the Trust Administrator based solely on Mortgage Loan data provided to the
Trust Administrator by the Master Servicer (in a format agreed to by the Trust
Administrator and the Master Servicer) no later than the Payment Date. In
preparing or furnishing the foregoing information, the Trust Administrator and
the Master Servicer shall be entitled to rely conclusively on the accuracy of
the information or data regarding the Mortgage Loans and the related REO
Property that has been provided to the Master Servicer by the Servicer, and
neither the Trust Administrator nor the Master Servicer shall be obligated to
verify, recompute, reconcile or recalculate any such information or data. The
Trust Administrator, the Indenture Trustee, the Custodian and the Master
Servicer shall be entitled to conclusively rely on all of such data and
information provided to the Master Servicer and shall have no liability for
any errors in such data or information.
(b) Upon the reasonable advance written request of any Noteholder that
is a savings and loan, bank or insurance company, which request, if received
by the Indenture Trustee shall
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be forwarded promptly to the Trust Administrator, the Trust Administrator
shall provide, or cause to be provided (or, to the extent that such
information or documentation is not required to be provided by the Servicer,
shall use reasonable efforts to obtain such information and documentation from
the Servicer, and provide), to such Noteholder such reports and access to
information and documentation regarding the Mortgage Loans as such Noteholder
may reasonably deem necessary to comply with applicable regulations of the
Office of Thrift Supervision or its successor or other regulatory authorities
with respect to an investment in the Notes; provided, however, that the Trust
Administrator shall be entitled to be reimbursed by such Noteholder for actual
expenses incurred in providing such reports and access.
(c) Within [90] days, or such shorter period as may be required by
statute or regulation, after the end of each calendar year, the Trust
Administrator shall have prepared and shall make available to each Person who
at any time during the calendar year was a Noteholder of record, and make
available to Security Owners (identified as such by the Clearing Agency) in
accordance with applicable regulations, a report summarizing the items
provided to the Noteholders pursuant to Section 5.09(a) on an annual basis as
may be required to enable such Holders to prepare their federal income tax
returns; provided, however, that this Section 5.09(c) shall not be applicable
where relevant reports or summaries are required elsewhere in this Agreement.
Such information shall include the amount of original issue discount accrued
on each Class of Notes and information regarding the expenses of the Issuer.
The Trust Administrator shall be deemed to have satisfied such requirement if
it forwards such information in any other format permitted by the Code. The
Master Servicer shall provide the Trust Administrator with such information as
is necessary for the Trust Administrator to prepare such reports.
(d) The Trust Administrator shall furnish any other information that is
required by the Code and regulations thereunder to be made available to
Noteholders. The Master Servicer shall provide the Trust Administrator with
such information as is necessary for the Trust Administrator to prepare such
reports (and the Trust Administrator may rely solely upon such information).
Section 5.10. Termination of Servicer; Successor Servicers.
(a) The Master Servicer shall be entitled to terminate the rights and
obligations of the Servicer upon the occurrence of a Servicer Event of Default
as set forth in Section 4.07; provided, however, that in the event of
termination of the Servicer, the Master Servicer shall provide for the
servicing of the Mortgage Loans by a successor servicer as provided in Section
4.08.
The parties acknowledge that notwithstanding the preceding sentence,
there may be a transition period, not to exceed [90] days, in order to effect
the transfer of servicing to a successor servicer. The Master Servicer shall
be entitled to be reimbursed by the Servicer (or by the Trust Estate, if the
Servicer is unable to fulfill its obligations hereunder) for all costs
associated with the transfer of servicing, including without limitation, any
costs or expenses associated with the complete transfer of all servicing data
and the completion, correction or manipulation of such servicing data, as may
be required by the Master Servicer to correct any
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errors or insufficiencies in the servicing data or otherwise to enable the
Master Servicer to service the Mortgage Loans properly and effectively.
(b) If the Master Servicer acts as a successor Servicer, it shall not
assume liability for the representations and warranties of the Servicer that
it replaces. The Master Servicer shall use reasonable efforts to have the
successor Servicer assume liability for the representations and warranties
made by the terminated Servicer and in the event of any such assumption by the
successor servicer, the Master Servicer may, in the exercise of its business
judgment, release the terminated Servicer from liability for such
representations and warranties.
(c) If the Master Servicer acts as a successor Servicer, it will have no
obligation to make an Advance if it determines in its reasonable judgment that
such Advance would constitute a Nonrecoverable Advance.
Section 5.11. Master Servicer Liable for Enforcement. The Master
Servicer shall use commercially reasonable efforts to ensure that the Mortgage
Loans are serviced in accordance with the provisions of this Agreement and
shall use commercially reasonable efforts to enforce the provisions of Article
IV for the benefit of the Noteholders. The Master Servicer shall be entitled
to enter into any agreement with any Servicer for indemnification of the
Master Servicer and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification. Except as expressly set forth herein,
the Master Servicer shall have no liability for the acts or omissions of the
Servicer in the performance by such Servicer of its obligations under Article
IV.
Section 5.12. Assumption of Master Servicing by Indenture Trustee.
(a) In the event the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of any Master Servicer Event of
Default under Section 8.01 of this Agreement), the Indenture Trustee shall
thereupon assume all of the rights and obligations of such Master Servicer
hereunder. The Indenture Trustee, its designee or any successor master
servicer appointed by the Indenture Trustee shall be deemed to have assumed
all of the Master Servicer's interest herein, except that the Master Servicer
shall not thereby be relieved of any liability or obligations of the Master
Servicer accruing prior to its replacement as Master Servicer, and shall be
liable to the Indenture Trustee, and hereby agrees to indemnify and hold
harmless the Indenture Trustee from and against all costs, damages, expenses
and liabilities (including reasonable attorneys' fees) incurred by the
Indenture Trustee as a result of such liability or obligations of the Master
Servicer and in connection with the Indenture Trustee's assumption (but not
its performance, except to the extent that costs or liability of the Indenture
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer prior to its replacement as Master Servicer)
of the Master Servicer's obligations, duties or responsibilities thereunder.
(b) The Master Servicer that has been terminated shall, upon request of
the Indenture Trustee but at the expense of such Master Servicer, deliver to
the assuming party all documents and records relating to the Mortgage Loans
and an accounting of amounts collected and held by it and otherwise use its
best efforts to effect the orderly and efficient transfer of master servicing
to the assuming party.
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Section 5.13. [Reserved]
Section 5.14. Release of Mortgage Files.
(a) Upon (i) becoming aware of the payment in full of any Mortgage Loan
or (ii) the receipt by the Master Servicer of a notification that payment in
full has been or will be escrowed in a manner customary for such purposes, the
Master Servicer will, or will cause the Servicer to, promptly notify the
Indenture Trustee (or the Custodian) by a certification (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
Collection Account maintained by the Trust Administrator pursuant to Section
5.07 have been or will be so deposited) of a Servicing Officer and shall
request (on the form attached to the Custodial Agreement) the Indenture
Trustee or the Custodian, to deliver to the Servicer the related Mortgage
File. Upon receipt of such certification and request, the Indenture Trustee or
the Custodian (with the consent, and at the direction of the Indenture
Trustee), shall promptly release the related Mortgage File to the Servicer and
the Indenture Trustee shall have no further responsibility with regard to such
Mortgage File. Upon any such payment in full, the Master Servicer is
authorized, and the Servicer is authorized, to give, as agent for the
Indenture Trustee, as the mortgagee under the Mortgage that secured the
Mortgage Loan, an instrument of satisfaction (or assignment of mortgage
without recourse) regarding the Mortgaged Property subject to the Mortgage,
which instrument of satisfaction or assignment, as the case may be, shall be
delivered to the Person or Persons entitled thereto against receipt therefor
of such payment, it being understood and agreed that no expenses incurred in
connection with such instrument of satisfaction or assignment, as the case may
be, shall be chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Indenture Trustee shall execute such
documents as shall be prepared and furnished to the Indenture Trustee by the
Master Servicer, or by the Servicer, as applicable, (in a form reasonably
acceptable to the Indenture Trustee) and as are necessary for the prosecution
of any such proceedings. The Indenture Trustee or the Custodian, shall, upon
request of the Master Servicer or of the Servicer, as applicable, and delivery
to the Indenture Trustee or the Custodian, of a trust receipt signed by a
Servicing Officer substantially in the form attached to the Custodial
Agreement, release the related Mortgage File held in its possession or control
to the Master Servicer (or the Servicer, as applicable). Such trust receipt
shall obligate the Master Servicer or the Servicer, as applicable, to return
the Mortgage File to the Indenture Trustee or the Custodian, as applicable,
when the need therefor by the Master Servicer or the Servicer, as applicable,
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 trust receipt shall be released by the Indenture
Trustee or the Custodian, as applicable, to the Master Servicer or the
Servicer as applicable.
Section 5.15. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Indenture Trustee.
(a) The Master Servicer shall transmit, or cause the Servicer to
transmit, to the Indenture Trustee such documents and instruments coming into
the possession of the Master Servicer or the Servicer from time to time as are
required by the terms hereof to be delivered to
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the Indenture Trustee or the Custodian. Any funds received by the Master
Servicer or by the Servicer in respect of any Mortgage Loan or which otherwise
are collected by the Master Servicer or the Servicer as Liquidation Proceeds
or Insurance Proceeds in respect of any Mortgage Loan shall be held for the
benefit of the Indenture Trustee and the Noteholders subject to the Master
Servicer's right to retain or withdraw amounts provided in this Agreement and
to the right of the Servicer to retain its Servicing Fee and other amounts as
provided herein. The Master Servicer shall, and shall cause the Servicer to,
provide access to information and documentation regarding the Mortgage Loans
to the Indenture Trustee, their respective agents and accountants at any time
upon reasonable request and during normal business hours, and to Noteholders
that are savings and loan associations, banks or insurance companies, the
Office of Thrift Supervision, the FDIC and the supervisory agents and
examiners of such Office and Corporation or examiners of any other federal or
state banking or insurance regulatory authority if so required by applicable
regulations of the Office of Thrift Supervision or other regulatory authority,
such access to be afforded without charge but only upon reasonable request in
writing and during normal business hours at the offices of the Master Servicer
designated by it. In fulfilling such a request the Master Servicer shall not
be responsible for determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer or the 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 or by the Servicer for and on behalf of the Indenture Trustee as the
Indenture Trustee's agent and bailee for purposes of perfecting the Indenture
Trustee's security interest therein as provided by relevant Uniform Commercial
Code or laws; provided, however, that the Master Servicer and the 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 the
Servicer under this Agreement and shall be authorized to remit such funds to
the Trust Administrator in accordance with this Agreement.
(c) The Master Servicer hereby acknowledges that concurrently with the
execution of this Agreement, the Indenture Trustee shall own or, to the extent
that a court of competent jurisdiction shall deem the conveyance of the
Mortgage Loans from the Seller to the Depositor not to constitute a sale, the
Indenture Trustee shall have a security interest in the Mortgage Loans and in
all Mortgage Files representing such Mortgage Loans and in all funds and
investment property now or hereafter held by, or under the control of, the
Servicer or the Master Servicer that are collected by the Servicer or the
Master Servicer in connection with the Mortgage Loans, whether as scheduled
installments of principal and interest or as full or partial prepayments of
principal or interest or as Liquidation Proceeds or Insurance Proceeds or
otherwise, and in all proceeds of the foregoing and proceeds of proceeds (but
excluding any fee or other amounts to which the Servicer or the Master
Servicer is entitled to hereunder); and the Master Servicer agrees that so
long as the Mortgage Loans are assigned to and held by the Indenture Trustee
or the Custodian, all documents or instruments constituting part of the
Mortgage Files, and such funds relating to the Mortgage Loans which come into
the possession or custody of, or which are subject to the control of, the
Master Servicer or the Servicer shall be held by the Master Servicer or the
Servicer for and on behalf of the Indenture Trustee as the Indenture Trustee's
agent and bailee for purposes of perfecting the Indenture Trustee's security
interest therein as provided by the applicable Uniform Commercial Code or
other applicable laws.
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(d) The Master Servicer agrees that it shall not, and shall not
authorize the Servicer to, create, incur or subject any Mortgage Loans, or any
funds that are deposited in any Custodial Account, Escrow Account or the
Collection Account, or any funds that otherwise are or may become due or
payable to or for the benefit of the Indenture Trustee, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance,
nor assert by legal action or otherwise any claim or right of setoff against
any Mortgage Loan or any funds collected on, or in connection with, a Mortgage
Loan.
Section 5.16. Opinion. On or before the Closing Date, the Master
Servicer shall cause to be delivered to the Depositor, the Seller, the
Indenture Trustee, the Issuer, the Trust Administrator and the Servicer one or
more Opinions of Counsel, dated the Closing Date, in form and substance
reasonably satisfactory to the Depositor, as to the due authorization,
execution and delivery of this Agreement by the Master Servicer and the
enforceability thereof.
Section 5.17. [Reserved]
Section 5.18. [Reserved]
Section 5.19. [Reserved]
Section 5.20. Indenture Trustee To Retain Possession of Certain
Insurance Policies and Documents. The Indenture Trustee (or the Custodian on
behalf of the Indenture Trustee) shall retain possession and custody of the
originals of the 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 payable in respect of the Notes have been paid in full and the Master
Servicer otherwise has fulfilled its obligations under this Agreement, the
Indenture Trustee (or the Custodian) 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 the Servicer to deliver to the Indenture Trustee (or the Custodian),
upon the execution or receipt thereof the originals of the primary mortgage
insurance policies and any certificates of renewal thereof, and such other
documents or instruments that constitute portions of the Mortgage File that
come into the possession of the Master Servicer or the Servicer from time to
time.
Section 5.21. Compensation to the Master Servicer. Pursuant to Section
5.07(e), all income and gain realized from any investment of funds in the
Collection Account shall be for the benefit of the Master Servicer as
compensation. Notwithstanding the foregoing, the Master Servicer shall deposit
in the Collection Account, on or before the related Payment Date, an amount
equal to the lesser of (i) its master servicing compensation with respect to
such Payment Date and (ii) the amount of any Compensating Interest Payment
required to be paid by the Servicer with respect to such Payment Date pursuant
to this Agreement, but which is not paid by the Servicer on its behalf. 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 5.22. [Reserved]
Section 5.23. Reports to the Indenture Trustee.
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(a) Not later than [30] days after each Payment Date, the Trust
Administrator shall, upon request, forward to the Indenture Trustee a
statement, deemed to have been certified by a officer of the Trust
Administrator, setting forth the status of the Collection Account maintained
by the Trust Administrator as of the close of business on the related Payment
Date, indicating that all payments required by this Agreement to be made by
the Trust Administrator have been made (or if any required payment has not
been made by the Trust Administrator, specifying the nature and status
thereof) and showing, for the period covered by such statement, the aggregate
of deposits into and withdrawals from the Collection Account maintained by the
Trust Administrator. Copies of such statement shall be provided by the Trust
Administrator, upon request, to the Depositor, Attention: _______ 200_-__ and
any Noteholders (or by the Indenture Trustee at the Trust Administrator's
expense if the Trust Administrator shall fail to provide such copies to the
Noteholders (unless (i) the Trust Administrator shall have failed to provide
the Indenture Trustee with such statement or (ii) the Indenture Trustee has no
actual knowledge of the Trust Administrator's failure to provide such
statement)).
(b) Not later than [two] Business Days following each Payment Date, the
Trust Administrator shall deliver to one Person designated by the Depositor,
in a format consistent with other electronic loan level reporting supplied by
the Master Servicer in connection with similar transactions, "loan level"
information with respect to the Mortgage Loans as of the related Determination
Date, to the extent that such information has been provided to the Master
Servicer by the Servicer or by the Depositor.
(c) All information, reports and statements prepared by the Master
Servicer under this Agreement shall be based on information supplied to the
Master Servicer by the Servicer without independent verification thereof and
the Master Servicer shall be entitled to rely on such information.
Section 5.24. Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall (and shall cause any subservicer to)
deliver to the Indenture Trustee and the Depositor no later than the 15th of
March of each calendar year, commencing in March 200_, an Officer's
Certificate, certifying that with respect to the period ending on the
immediately preceding December 31: (i) a review of the activities of such
Person during the preceding calendar year or portion thereof has been made
under such Servicing Officer's supervision, (ii) to the best of such Servicing
Officer's knowledge, based on such review, such Person has fulfilled its
obligations under this Agreement in all material respects throughout such
year, or, if there has been a failure to fulfill any such obligation in any
material respect, specifying each such failure known to such Servicing Officer
and the nature and status thereof, (iii) nothing has come to the attention of
such Servicing Officer to lead such Servicing Officer to believe that the
Servicer has failed to perform any of its duties, responsibilities and
obligations set forth in Article IV hereunder 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, and (iv) the Master Servicer has received from
the Servicer an annual certificate of compliance and a copy of such Servicer's
1122 Servicing Criteria-Assessment, or, if any such certificate or report has
not been received by the Master Servicer, the Master Servicer is using its
best reasonable efforts to obtain such certificate or report.
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(b) Copies of such statements shall be provided to any Noteholder upon
request, by the Master Servicer or by the Indenture 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 Indenture
Trustee with such statement or (ii) the Indenture Trustee has no actual
knowledge of the Master Servicer's failure to provide such statement).
Section 5.25. [Reserved]
Section 5.26. Merger or Consolidation. Any Person into which the Master
Servicer may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form 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 to the Master Servicer 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;
provided, however, that the successor or resulting Person to the Master
Servicer shall be a Person that shall be qualified and approved (or that have
an Affiliate that is qualified and approved) to service mortgage loans for
▇▇▇▇▇▇ ▇▇▇ or FHLMC and shall have a net worth of not less than $[15,000,000].
As a condition to the effectiveness of any merger or
consolidation, at least 15 calendar days prior to the effective date of any
merger or consolidation of the Master Servicer, the Master Servicer shall
provide (x) written notice to the Depositor of any successor pursuant to this
Section and (y) in writing and in form and substance reasonably satisfactory
to the Depositor, all information reasonably requested by the Depositor in
order to comply with its reporting obligation under Item 6.02 of Form 8-K with
respect to the resignation of the Master Servicer.
Section 5.27. Resignation of Master Servicer. Except as otherwise
provided in Sections 5.26 and this Section 5.27 hereof, the Master Servicer
shall not resign from the obligations and duties hereby imposed on it unless
it determines that the Master Servicer's duties hereunder are no longer
permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it and cannot be cured.
Any such determination permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel that shall be Independent to such effect
delivered to the Indenture Trustee. No such resignation shall become effective
until (a) the Indenture Trustee shall have assumed, or a successor master
servicer shall have been appointed by the Indenture Trustee and until such
successor shall have assumed, the Master Servicer's responsibilities and
obligations under this Agreement and (b) the Depositor shall have received the
information described in the following sentence. As a condition to the
effectiveness of any such resignation, at least 15 calendar days prior to the
effective date of such resignation, the Master Servicer shall provide (x)
written notice to the Depositor of any successor pursuant to this Section and
(y) in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a successor master servicer. Notice of such resignation shall be given
promptly by the Master Servicer and the Depositor to the Indenture Trustee.
Section 5.28. Assignment or Delegation of Duties by the Master Servicer.
Except as expressly provided herein, the Master Servicer shall not assign or
transfer any of its rights,
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benefits or privileges hereunder to any other Person, or delegate to or
subcontract with, or authorize or appoint any other Person to perform any of
the duties, covenants or obligations to be performed by the Master Servicer
hereunder, unless the Indenture Trustee and the Depositor shall have consented
to such action; provided, however, that the Master Servicer shall have the
right without the prior written consent of the Indenture Trustee or the
Depositor to delegate or assign to or subcontract with or authorize or appoint
an Affiliate of the Master Servicer to perform and carry out any duties,
covenants or obligations to be performed and carried out by the Master
Servicer hereunder. In no case, however, shall any such delegation,
subcontracting or assignment to an Affiliate of the Master Servicer relieve
the Master Servicer of any liability hereunder. Notice of such permitted
assignment shall be given promptly by the Master Servicer to the Depositor and
the Indenture Trustee. If, pursuant to any provision hereof, the duties of the
Master Servicer are transferred to a successor master servicer, the entire
amount of compensation payable to the Master Servicer pursuant hereto,
including amounts payable to or permitted to be retained or withdrawn by the
Master Servicer pursuant to Section 5.21 hereof, shall thereafter be payable
to such successor master servicer.
Section 5.29. Limitation on Liability of the Master Servicer and Others.
(a) The Master Servicer undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Master Servicer from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that the
duties and obligations of the Master Servicer shall be determined solely by
the express provisions of this Agreement, the Master Servicer shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement; no implied covenants or obligations
shall be read into this Agreement against the Master Servicer and, in absence
of bad faith on the part of the Master Servicer, the Master Servicer 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 Master Servicer and conforming to the requirements of this Agreement.
(c) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indenture Trustee or the Noteholders for any action taken or for refraining
from the taking of 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 liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in its performance of its duties or by reason of reckless disregard for its
obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer shall be entitled
to indemnification by the Trust Estate and will be held harmless against any
loss, liability or expense incurred in connection with any legal action
relating to this Agreement, the Notes or any other Operative Agreement other
than any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence in the performance of his or its duties hereunder or
by reason of reckless disregard of his or its obligations and duties
hereunder. 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
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matters arising hereunder. The Master Servicer shall be under no obligation to
appear in, prosecute or defend any legal action that is not incidental to its
duties to master service the Mortgage Loans in accordance with this Agreement
and that in its opinion may involve it in any expenses or liability; provided,
however, that the Master Servicer may in its sole discretion undertake any
such action that 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 Noteholders 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 Issuer and the Master Servicer shall be entitled to be
reimbursed therefor out of the Collection Account it maintains as provided by
Section 4.08.
Section 5.30. Indemnification; Third Party Claims. The Master Servicer
agrees to indemnify the Depositor, the Issuer, the Indenture Trustee, the
Owner Trustee and the Servicer and hold them harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liability, fees and expenses that the
Depositor, the Issuer, the Indenture Trustee, the Owner Trustee or the
Servicer may sustain as a result of the failure of the Master Servicer to
perform its duties and master service the Mortgage Loans in compliance with
the terms of this Agreement. The Depositor, the Issuer, the Indenture Trustee,
the Owner Trustee and the Servicer shall immediately notify the Master
Servicer if a claim is made by a third party with respect to this Agreement,
the Mortgage Loans entitling the Depositor, the Issuer, the Indenture Trustee,
the Owner Trustee or the Servicer to indemnification under this Section 5.30,
whereupon the Master Servicer shall assume the defense of any such claim and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or them in respect of such claim. The failure to provide such immediate
notice shall not affect the Master Servicer's obligation pursuant to this
Section 5.30 to indemnify the Depositor, the Issuer, the Indenture Trustee,
the Owner Trustee and the Servicer, except to the extent that the Master
Servicer is materially prejudiced by such failure to notify.
Section 5.31. Alternative Index. In the event that the Servicer notifies
the Master Servicer in writing that the Index for any Mortgage Loan, as
specified in the related Mortgage Note, becomes unavailable for any reason,
the Master Servicer shall select an alternative index in accordance with the
terms of such Mortgage Note or, if such Mortgage Note does not make provision
for the selection of an alternative index in such event, the Master Servicer
shall, subject to applicable law, select an alternative index based on
information comparable to that used in connection with the original Index and,
in either case, such alternative index shall thereafter be the Index for such
Mortgage Loan.
Section 5.32. Transfer of Servicing. The Servicer agrees that it shall
provide written notice to the Master Servicer and the Indenture Trustee
[thirty] days prior to any proposed transfer or assignment by the Seller of
the servicing of the Mortgage Loans. In addition, the ability of the Servicer
to transfer or assign the servicing hereunder to a successor servicer shall be
subject to the following conditions:
(i) Receipt of written consent of the Master Servicer to such
transfer;
(ii) Such successor servicer must be a FHA Approved Mortgagee;
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(iii) Such successor servicer must satisfy the servicer
eligibility standards set forth in Section 4.06(a);
(iv) Such successor servicer must execute and deliver to the
Master Servicer and the Indenture Trustee an agreement, in form and
substance reasonably satisfactory to the Master Servicer and the
Indenture Trustee, that contains an assumption by such successor
servicer of the due and punctual performance and observance of each
covenant and condition to be performed and observed by the Servicer;
(v) If the successor servicer is not a Servicer of Mortgage Loans
at the time of the transfer, there must be delivered to the Indenture
Trustee a letter from each Rating Agency to the effect that such
transfer of servicing will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Notes;
(vi) The Seller shall, at its cost and expense, take such steps,
or cause the terminated Servicer to take such steps, as may be necessary
or appropriate to effectuate and evidence the transfer of the servicing
of the Mortgage Loans to such successor servicer, including, but not
limited to, the following: (A) to the extent required by the terms of
the Mortgage Loans and by applicable federal and state laws and
regulations, the Seller shall cause the prior Servicer to timely mail to
each obligor under a Mortgage Loan any required notices or disclosures
describing the transfer of servicing of the Mortgage Loans to the
successor servicer; (B) prior to the effective date of such transfer of
servicing, the Seller shall cause the prior Servicer to transmit to any
related insurer notification of such transfer of servicing; (C) on or
prior to the effective date of such transfer of servicing, the Seller
shall cause the prior Servicer to deliver to the successor servicer all
Mortgage Loan Documents and any related records or materials; (D) on or
prior to the effective date of such transfer of servicing, the Seller
shall cause the prior Servicer to transfer to the successor servicer,
or, if such transfer occurs after a Servicer Remittance Date but before
the next succeeding Payment Date, to the Trust Administrator, all funds
held by the prior Servicer in respect of the Mortgage Loans; (E) on or
prior to the effective date of such transfer of servicing, the Seller
shall cause the prior Servicer to, after the effective date of the
transfer of servicing to the successor servicer, continue to forward to
such successor servicer, within [one] Business Day of receipt, the
amount of any payments or other recoveries received by the prior
Servicer, and to notify the successor servicer of the source and proper
application of each such payment or recovery; and (F) the Seller shall
cause the prior Servicer to, after the effective date of transfer of
servicing to the successor servicer, continue to cooperate with the
successor servicer to facilitate such transfer in such manner and to
such extent as the successor servicer may reasonably request; and
(vii) Such successor servicer shall provide to the Depositor in
writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in
order to comply with its reporting obligation under Item 6.02 of Form
8-K with respect to a successor servicer.
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ARTICLE VI
DEPOSITS AND PAYMENTS TO HOLDERS
Section 6.01. The Collection Account.
(a) The Trust Administrator shall establish and maintain in the name of
the Notes Intermediary the Collection Account as provided in Section 5.07,
which account shall be pledged to the Indenture Trustee for the benefit of the
Noteholders.
(b) The Trust Administrator shall make withdrawals from the Collection
Account only for the purposes set forth in Section 5.08.
Section 6.02. Payments from the Collection Account.
(a) [On each Payment Date, the Trust Administrator (or the Paying Agent
on behalf of the Trust Administrator) shall withdraw from the Collection
Account the Total Remittance Amount (to the extent such amount is on deposit
in the Collection Account) and shall pay such amount as specified in this
Section. All allocations and payments made between and with respect to [Pool
1], [Pool 2] and [Pool 3] in this Section shall be made concurrently.]
(b) [On each Payment Date, the Trust Administrator (or the Paying Agent
on behalf of the Trust Administrator) shall pay the Interest Remittance Amount
for [Pool 1] for such date [in the following order of priority] in accordance
with the report of the Trust Administrator:
(i) from the Interest Remittance Amount for [Pool 1],
[concurrently] to the [Class AF-5B] Insurer, the [Class AF-5B] Premium
for such Payment Date and to each Class of [Group AF] Notes, the Current
Interest and Interest Carry Forward Amount for each such Class and such
Payment Date, [pro rata], based on their respective entitlements,
(ii) from the remaining Interest Remittance Amount for [Pool 1],
[sequentially]:
(a) to the [Class AF-5B] Insurer, any [Class AF-5B]
Reimbursement Amount,
(b) to the [Class MF-1] Notes, the Current Interest for such
Class,
(c) to the [Class MF-2] Notes, the Current Interest for such
Class,
(d) to the [Class MF-3] Notes, the Current Interest for such
Class,
(e) to the [Class MF-4] Notes, the Current Interest for such
Class,
(f) to the [Class MF-5] Notes, the Current Interest for such
Class,
(g) to the [Class MF-6] Notes, the Current Interest for such
Class,
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(h) to the [Class MF-7] Notes, the Current Interest for such
Class,
(i) to the [Class MF-8] Notes, the Current Interest for such
Class,
(j) to the Class [BF] Notes, the Current Interest for such
Class, and
(k) [any remainder as part of the Fixed Rate Pool Excess
Cashflow.]
(c) [On each Payment Date, the Trust Administrator (or the Paying Agent
on behalf of the Trust Administrator) shall pay the Interest Remittance Amount
for [Pool 2] and [Pool 3] for such date [in the following order of priority]
in accordance with the report of the Trust Administrator:
(i) [concurrently]:
(a) from Interest Remittance Amount for [Pool 2],
[concurrently] to each Class of [Group 2-AV] Notes, the
Current Interest and Interest Carry Forward Amount for each
such Class and such Payment Date, [pro rata], based on their
respective entitlements,
(b) from Interest Remittance Amount for [Pool 3],
[concurrently] to each Class of [Group 3-AV] Notes, the
Current Interest and Interest Carry Forward Amount for each
such Class and such Payment Date, [pro rata], based on their
respective entitlements,
(ii) from the remaining Interest Remittance Amount for [Pool 2]
and [Pool 3], to each Class of [Group AV] Notes, any remaining Current
Interest and Interest Carry Forward Amount not paid pursuant to Section
6.02(c)(i), [pro rata], based on the Note Principal Amounts thereof, to
the extent needed to pay any Current Interest and Interest Carry Forward
Amount for each such Class; provided that Interest Remittance Amount
remaining after such allocation to pay any Current Interest and Interest
Carry Forward Amount based on the Note Principal Amounts of the Notes
will be distributed to each Class of [Group AV] Notes with respect to
which there remains any unpaid Current Interest and Interest Carry
Forward Amount (after the distribution based on Note Principal Amounts),
[pro rata], based on the amount of such remaining unpaid Current
Interest and Interest Carry Forward Amount,
(iii) from the remaining Interest Remittance Amount for [Pool 2]
and [Pool 3], [sequentially]:
(a) to the [Class MV-1] Notes, the Current Interest for such
Class,
(b) to the [Class MV-2] Notes, the Current Interest for such
Class,
(c) to the [Class MV-3] Notes, the Current Interest for such
Class,
(d) to the [Class MV-4] Notes, the Current Interest for such
Class,
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(e) to the [Class MV-5] Notes, the Current Interest for such
Class,
(f) to the [Class MV-6] Notes, the Current Interest for such
Class,
(g) to the [Class MV-7] Notes, the Current Interest for such
Class,
(i) to the [Class MV-8] Notes, the Current Interest for such
Class,
(j) to the Class [BV] Notes, the Current Interest for such
Class, and
(k) [any remainder as part of the Adjustable Rate Pool
Excess Cashflow.]
(d) [On each Payment Date, the Trust Administrator (or the Paying Agent
on behalf of the Trust Administrator) shall pay the Principal Remittance
Amount for [Pool 1] (with the Principal Distribution Amount exclusive of the
portion thereof consisting of the Extra Principal Distribution Amount being
applied first and the Extra Principal Distribution Amount being applied
thereafter) for such date in accordance with the report of the Trust
Administrator [as follows]:
(i) with respect to any Payment Date prior to the Fixed Rate
Stepdown Date or on which a Fixed Rate Trigger Event is in effect, from
the Principal Distribution Amount for [Pool 1], [sequentially]:
(A) to the [Class AF] Notes and to the [Class AF-5B]
Insurer, in the order and priorities set forth in clause
(3)(A) below,
(B) to the [Class MF-1] Notes, until the Note Principal
Amount thereof is reduced to zero,
(C) to the [Class MF-2] Notes, until the Note Principal
Amount thereof is reduced to zero,
(D) to the [Class MF-3] Notes, until the Note Principal
Amount thereof is reduced to zero,
(E) to the [Class MF-4] Notes, until the Note Principal
Amount thereof is reduced to zero,
(F) to the [Class MF-5] Notes, until the Note Principal
Amount thereof is reduced to zero,
(G) to the [Class MF-6] Notes, until the Note Principal
Amount thereof is reduced to zero,
(H) to the [Class MF-7] Notes, until the Note Principal
Amount thereof is reduced to zero,
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(I) to the [Class MF-8] Notes, until the Note Principal
Amount thereof is reduced to zero,
(J) to the [Class BF] Notes, until the Note Principal Amount
thereof is reduced to zero, and
(K) [any remainder as part of the Fixed Rate Pool Excess
Cashflow].
(ii) with respect to any Payment Date on or after the Fixed Rate
Stepdown Date and so long as a Fixed Rate Trigger Event is not in effect
from the Principal Distribution Amount for [Pool 1], [sequentially]:
(A) in an amount up to the [Group AF] Principal Distribution
Amount, to the [Group AF] Notes in the order and priorities
set forth in clause (iii)(B) below, until the Note Principal
Amounts thereof are reduced to zero,
(B) to the [Class AF-5B] Insurer, any remaining [Class
AF-5B] Premium and any remaining [Class AF-5B] Reimbursement
Amount, in each case that has not been paid from Interest
Remittance Amount for [Pool 1] for such Payment Date,
(C) to the [Class MF-1] Notes, the Fixed Rate Subordinate
Class Principal Distribution Amount for such Class until the
Note Principal Amount thereof is reduced to zero,
(D) to the [Class MF-2] Notes, the Fixed Rate Subordinate
Class Principal Distribution Amount for such Class until the
Note Principal Amount thereof is reduced to zero,
(E) to the [Class MF-3] Notes, the Fixed Rate Subordinate
Class Principal Distribution Amount for such Class until the
Note Principal Amount thereof is reduced to zero,
(F) to the [Class MF-4] Notes, the Fixed Rate Subordinate
Class Principal Distribution Amount for such Class until the
Note Principal Amount thereof is reduced to zero,
(G) to the [Class MF-5] Notes, the Fixed Rate Subordinate
Class Principal Distribution Amount for such Class until the
Note Principal Amount thereof is reduced to zero,
(H) to the [Class MF-6] Notes, the Fixed Rate Subordinate
Class Principal Distribution Amount for such Class until the
Note Principal Amount thereof is reduced to zero,
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(I) to the [Class MF-7] Notes, the Fixed Rate Subordinate
Class Principal Distribution Amount for such Class until the
Note Principal Amount thereof is reduced to zero,
(J) to the [Class MF-8] Notes, the Fixed Rate Subordinate
Class Principal Distribution Amount for such Class until the
Note Principal Amount thereof is reduced to zero,
(K) to the [Class BF] Notes, the Fixed Rate Subordinate
Class Principal Distribution Amount for such Class until the
Note Principal Amount thereof is reduced to zero, and
(L) [any remainder as part of the Fixed Rate Pool Excess
Cashflow].
(iii) On each Payment Date on which any principal amounts are to
be distributed to the [Group AF] Notes and the [Class AF-5B] Insurer
pursuant to clause (i)(A) or to the [Group AF] Notes pursuant to clause
(ii)(A) above, such amounts shall be distributed to the [Group AF] Notes
and, if applicable, the [Class AF-5B] Insurer, [in the following order
of priority]:
(A) For each Payment Date prior to the Fixed Rate Stepdown
Date or on which a Fixed Rate Trigger Event is in
effect,
(1) the NAS Principal Distribution Amount to the
[Class AF-6] Notes, until the Note Principal Amount
thereof is reduced to zero,
(2) [concurrently], to the [Class AF-1A] and [Class
AF-1B] Notes, [pro rata] based on their respective
Note Principal Amounts, until their respective Note
Principal Amounts are reduced to zero,
(3) [sequentially], to the [Class AF-2], [Class AF-3]
and [Class AF-4] Notes, in that order, in each case
until the Note Principal Amount thereof is reduced to
zero,
(4) [concurrently], to the [Class AF-5A] Notes and the
[Class AF-5B] Insurer, [pro rata] (based on, with
respect to clause (x), the Note Principal Amount of
the [Class AF-5A] Notes, and with respect to clause
(y), the Note Principal Amount of the [Class AF-5B]
Notes):
(a) to the [Class AF-5A] Notes, until the Note
Principal Amount thereof is reduced to zero, and
(b) [sequentially]:
(i) to the [Class AF-5B] Insurer, any
remaining [Class AF-5B] Premium that has
not been paid from
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Interest Remittance Amount for [Pool 1]
for such Payment Date, and
(ii) to the [Class AF-5B] Notes, until the
Note Principal Amount thereof is
reduced to zero,
(5) to the [Class AF-6] Notes without regard to the
NAS Principal Distribution Amount, until the Note
Principal Amount thereof is reduced to zero, and
(6) to the [Class AF-5B] Insurer, any remaining [Class
AF-5B] Reimbursement Amount that has not been paid
from Interest Remittance Amount for [Pool 1] for such
Payment Date.
(B) For each Payment Date on or after the Fixed Rate
Stepdown Date and so long as a Fixed Rate Trigger Event is
not in effect,
(1) the NAS Principal Distribution Amount to the
[Class AF-6] Notes, until the Note Principal Amount
thereof is reduced to zero,
(2) [concurrently], to the [Class AF-1A] and [Class
AF-1B] Notes, [pro rata] based on their respective
Note Principal Amounts, until their respective Note
Principal Amounts are reduced to zero,
(3) [sequentially], to the [Class AF-2], [Class AF-3]
and [Class AF-4] Notes, in that order, in each case
until the Note Principal Amount thereof is reduced to
zero,
(4) [concurrently], to the [Class AF-5A] Notes and the
[Class AF-5B] Notes, [pro rata], based on the Note
Principal Amounts thereof, until the Note Principal
Amounts thereof are reduced to zero, and
(5) to the [Class AF-6] Notes without regard to the
NAS Principal Distribution Amount, until the Note
Principal Amount thereof is reduced to zero.
[Notwithstanding the foregoing order of priority, on any Payment Date on
which the aggregate Note Principal Amount of the [Group AF] Notes is greater
than the sum of the aggregate Stated Principal Balance of the Mortgage Loans
in [Pool 1] and any amount on deposit in the Supplemental Loan Account in
respect of [Pool 1], any principal amounts to be distributed to the [Group AF]
Notes and the [Class AF-5B] Insurer shall be distributed first, [concurrently]
to each Class of [Group AF] Notes, [pro rata], based on the Note Principal
Amounts thereof, in each case until the Note Principal Amount thereof is
reduced to zero, and second, to the [Class AF-5B] Insurer, any remaining
[Class AF-5B] Premium and any remaining [Class AF-5B] Reimbursement Amount].]
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(e) [On each Payment Date, the Trust Administrator (or the Paying Agent
on behalf of the Trust Administrator) shall pay the Principal Remittance
Amount for [Pool 2] and [Pool 3] (with the Principal Distribution Amount
exclusive of the portion thereof consisting of the Extra Principal
Distribution Amount being applied first and the Extra Principal Distribution
Amount being applied thereafter) for such date in accordance with the report
of the Trust Administrator [as follows]:
(i) with respect to any Payment Date prior to the Adjustable Rate
Stepdown Date or on which an Adjustable Rate Trigger Event is in
effect, [sequentially]:
(A) [concurrently]:
(1) from the Principal Distribution Amount for [Pool
2], [sequentially]:
(a) to each Class of [Group 2-AV] Notes, in the
order and priorities set forth in Section
6.02(e)(iii) below, until the Note Principal
Amounts thereof are reduced to zero; and
(b) to each Class of [Group 3-AV] Notes (after
the distribution of the Principal Distribution
Amount from [Pool 3] as provided in Section
6.02(d)(1)(A)(ii)(a) below), in the order and
priorities set forth in Section 6.02(d)(4)
below, until the Note Principal Amounts thereof
are reduced to zero;
(2) from the Principal Distribution Amount for [Pool
3], [sequentially]:
(a) to each Class of [Group 3-AV] Notes, in the
order and priorities set forth in Section
6.02(d)(4) below, until the Note Principal
Amounts thereof are reduced to zero; and
(b) to each Class of [Group 2-AV] Notes (after
the distribution of the Principal Distribution
Amount from [Pool 2] as provided in Section
6.02(e)(i)(A)(1)(a) above), in the order and
priorities set forth in Section 6.02(e)(3)
below, until the Note Principal Amounts thereof
are reduced to zero;
(B) from the remaining Principal Distribution Amounts for
[Pool 2] and [Pool 3], [sequentially]:
(1) to the [Class MV-1] Notes, until the Note
Principal Amount thereof is reduced to zero,
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(2) to the [Class MV-2] Notes, until the Note
Principal Amount thereof is reduced to zero,
(3) to the [Class MV-3] Notes, until the Note
Principal Amount thereof is reduced to zero,
(4) to the [Class MV-4] Notes, until the Note
Principal Amount thereof is reduced to zero,
(5) to the [Class MV-5] Notes, until the Note
Principal Amount thereof is reduced to zero,
(6) to the [Class MV-6] Notes, until the Note
Principal Amount thereof is reduced to zero,
(7) to the [Class MV-7] Notes, until the Note
Principal Amount thereof is reduced to zero,
(8) to the [Class MV-8] Notes, until the Note
Principal Amount thereof is reduced to zero,
(9) to the [Class BV] Notes, until the Note Principal
Amount thereof is reduced to zero, and
(10) [any remainder as part of the Adjustable Rate
Pool Excess Cashflow].
(ii) with respect to any Payment Date on or after the Adjustable
Rate Stepdown Date and so long as an Adjustable Rate Trigger Event
is not in effect, from the Principal Distribution Amounts for
[Pool 2] and [Pool 3], [sequentially]:
(A) in an amount up to the [Group AV] Principal Distribution
Target Amount, [pro rata] based on the related [Group AV]
Principal Distribution Allocation Amount for the [Group
2-AV] Notes and the [Group 3-AV] Notes, respectively,
[concurrently], to (I) each Class of [Group 2-AV] Notes, in
an amount up to the [Group 2-AV] Principal Distribution
Amount in the order and priorities set forth in clause (3)
below, until the Note Principal Amounts thereof are reduced
to zero and (II) each Class of [Group 3-AV] Notes, in an
amount up to the [Group 3-AV] Principal Distribution Amount
in the order and priorities set forth in clause (4) below,
until the Note Principal Amounts thereof are reduced to
zero; provided, however, that if the aggregate Note
Principal Amount of the [Group 2-AV] Notes or [Group 3-AV]
Notes is reduced to zero then any remaining unpaid [Group
AV] Principal Distribution Target Amount will be distributed
to the remaining [Group AV] Notes in the order and
priorities set forth in clause (3) or clause (4) below, as
the case may be,
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(B) to the [Class MV-1] Notes, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such
Class until the Note Principal Amount thereof is reduced to
zero,
(C) to the [Class MV-2] Notes, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such
Class until the Note Principal Amount thereof is reduced to
zero,
(D) to the [Class MV-3] Notes, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such
Class until the Note Principal Amount thereof is reduced to
zero,
(E) to the [Class MV-4] Notes, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such
Class until the Note Principal Amount thereof is reduced to
zero,
(F) to the [Class MV-5] Notes, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such
Class until the Note Principal Amount thereof is reduced to
zero,
(G) to the [Class MV-6] Notes, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such
Class until the Note Principal Amount thereof is reduced to
zero
(H) to the [Class MV-7] Notes, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such
Class until the Note Principal Amount thereof is reduced to
zero
(I) to the [Class MV-8] Notes, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such
Class until the Note Principal Amount thereof is reduced to
zero
(J) to the [Class BV] Notes, the Adjustable Rate Subordinate
Class Principal Distribution Amount for such Class until the
Note Principal Amount thereof is reduced to zero, and
(K) [any remainder as part of the Adjustable Rate Pool
Excess Cashflow].
(iii) On each Payment Date on which any principal amounts are to
be distributed to the [Group 2-AV] Notes, such amounts shall be
distributed [concurrently], to the [Class 2-AV-1] and [Class
2-AV-2] Notes [pro rata], based on the Note Principal Amounts
thereof, in each case until the Note Principal Amount thereof is
reduced to zero; provided, however, that if a Group [2] Sequential
Trigger Event is in effect, then any principal amounts to be
distributed to the [Class 2-AV] Notes will be distributed
[sequentially], to the [Class 2-AV-1] and [Class 2-AV-2] Notes, in
that order, in each case until the Note Principal Amount thereof
is reduced to zero.
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(iv) On each Payment Date on which any principal amounts are to be
distributed to the [Group 3-AV] Notes, such amounts shall be
distributed [sequentially], to the [Class 3-AV-1], [Class 3-AV-2],
[Class 3-AV-3] and [Class 3-AV-4] Notes, in that order, in each
case until the Note Principal Amount thereof is reduced to zero;
provided, however, that on any Payment Date on which (x) the
aggregate Note Principal Amount of the [Group AV] Notes is greater
than the sum of the aggregate Stated Principal Balance of the
Adjustable Rate Mortgage Loans and (y) the aggregate Note
Principal Amount of the [Group 3-AV] Notes is greater than the sum
of the aggregate Stated Principal Balance of the [Pool 3] Mortgage
Loans, any principal amounts to be distributed to the [Group 3-AV]
Notes will be distributed [pro rata], based on the Note Principal
Amounts thereof, in each case until the Note Principal Amount
thereof is reduced to zero.]
(f) [On each Payment Date, the Trust Administrator (or the Paying Agent
on behalf of the Trust Administrator) shall pay the Fixed Rate Pool Excess
Cashflow for such date and, in the case of clauses (1), (3), (5), (7), (9),
(11), (13), (15), (17) and (19) below, any amounts in the Credit Comeback
Excess Account available for such Payment Date, shall be paid to the Classes
of Notes [in the following order of priority], in each case first to the
extent of the remaining Credit Comeback Excess Cashflow, if applicable, and
second to the extent of the remaining Fixed Rate Pool Excess Cashflow:
(i) to the Holders of the Class or Classes of [Group AF] Notes and
Fixed Rate Subordinate Notes then entitled to receive distributions in
respect of principal, in an amount equal to the Extra Principal
Distribution Amount for [Pool 1], payable to such Holders as part of the
Principal Distribution Amount for [Pool 1] pursuant to Section 6.02(d)
above; provided, however, that Credit Comeback Excess Cashflow (if any)
shall only be distributed pursuant to this clause, if the Fixed Rate
Overcollateralization Target Amount has at any previous time been met;
(ii) to the Holders of the [Class MF-1] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(iii) to the Holders of the [Class MF-1] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(iv) to the Holders of the [Class MF-2] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(v) to the Holders of the [Class MF-2] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(vi) to the Holders of the [Class MF-3] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(vii) to the Holders of the [Class[MF-3] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
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(viii) to the Holders of the [Class MF-4] Notes, in an amount
equal to any Interest Carry Forward Amount for such Class;
(ix) to the Holders of the [Class MF-4] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(x) to the Holders of the [Class MF-5] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(xi) to the Holders of the [Class MF-5] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(xii) to the Holders of the [Class MF-6] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(xiii) to the Holders of the [Class MF-6] Notes, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
(xiv) to the Holders of the [Class MF-7] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(xv) to the Holders of the [Class MF-7] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(xvi) to the Holders of the [Class MF-8] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(xvii) to the Holders of the [Class MF-8] Notes, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
(xviii) to the Holders of the [Class BF] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(xix) to the Holders of the [Class BF] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(xx) to each Class of [Class AF] Notes and Fixed Rate Subordinate
Notes (in the case of the [Class AF-1A] Notes after application of
[Class AF-1A] Cap Agreement to cover Net Rate Carryover), [pro rata]
based on the Note Principal Amounts thereof, to the extent needed to pay
any unpaid Net Rate Carryover for each such Class; and then any Fixed
Rate Pool Excess Cashflow remaining after such allocation to pay Net
Rate Carryover based on the Note Principal Amounts of the Notes shall be
distributed to each Class of [Class AF] Notes and Fixed Rate Subordinate
Notes with respect to which there remains any unpaid Net Rate Carryover,
[pro rata], based on the amount of such unpaid Net Rate Carryover;
(xxi) if the Adjustable Rate Overcollateralization Target Amount
has at any previous time been met, to the Holders of the Class or
Classes of [Class AV] Notes and
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Adjustable Rate Subordinate Notes then entitled to receive distributions
in respect of principal, payable to such Holders as part of the
Principal Distribution Amount as described under Section 6.02(e) above,
in an amount equal to the Extra Principal Distribution Amount for [Pool
2] and [Pool 3] not covered by the Adjustable Rate Pool Excess Cashflow
allocated [pro rata] based on the Extra Principal Distribution Amount
for [Pool 2] and [Pool 3] not covered by the Adjustable Rate Pool Excess
Cashflow;
(xxii) to the holders of the [Class 2-AV-2] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class 2-AV-2] Notes
remaining undistributed after application of the Adjustable Rate Pool
Excess Cashflow;
(xxiii) to the Holders of the [Class MV-1] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class MV-1] Notes
remaining undistributed after application of the Adjustable Rate Pool
Excess Cashflow;
(xxiv) to the Holders of the [Class MV-2] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class MV-2] Notes
remaining undistributed after application of the Adjustable Rate Pool
Excess Cashflow;
(xxv) to the Holders of the [Class MV-3] Notes, in an amount equal
to the Unpaid Realized Loss Amount for the [Class MV-3] Notes remaining
undistributed after application of the Adjustable Rate Pool Excess
Cashflow;
(xxvi) to the Holders of the [Class MV-4] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class MV-4] Notes
remaining undistributed after application of the Adjustable Rate Pool
Excess Cashflow;
(xxvii) to the Holders of the [Class MV-5] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class MV-5] Notes
remaining undistributed after application of the Adjustable Rate Pool
Excess Cashflow;
(xxviii) to the Holders of the [Class MV-6] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class MV-6] Notes
remaining undistributed after application of the Adjustable Rate Pool
Excess Cashflow;
(xxix) to the Holders of the [Class MV-7] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class MV-7] Notes
remaining undistributed after application of the Adjustable Rate Pool
Excess Cashflow;
(xxx) to the Holders of the [Class MV-8] Notes, in an amount equal
to the Unpaid Realized Loss Amount for the [Class MV-8] Notes remaining
undistributed after application of the Adjustable Rate Pool Excess
Cashflow;
(xxxi) to the Holders of the [Class BV] Notes, in an amount equal
to the Unpaid Realized Loss Amount for the [Class BV] Notes remaining
undistributed after application of the Adjustable Rate Pool Excess
Cashflow; and
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(xxxii) any amounts remaining shall be paid by the Trust
Administrator to the Ownership Certificate.
(g) [On each Payment Date, the Trust Administrator (or the Paying Agent
on behalf of the Trust Administrator) shall pay the Adjustable Rate Pool
Excess Cashflow to the Classes of Notes [in the following order of priority]:
(i) to the Holders of the Class or Classes of [Group AV]Notes and
Adjustable Rate Subordinate Notes then entitled to receive distributions
in respect of principal, in an aggregate amount equal to the Extra
Principal Distribution Amount for [Pool 2] and [Pool 3], payable to such
Holders of each such Class as part of the Principal Distribution Amount
for [Pool 2] and [Pool 3] pursuant to Section 6.02(e) above;
(ii) [pro rata], to the Holders of the [Class 2-AV-2] Notes, in an
amount equal to the Unpaid Realized Loss Amount for such Class;
(iii) to the Holders of the [Class MV-1] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(iv) to the Holders of the [Class MV-1] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(v) to the Holders of the [Class MV-2] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(vi) to the Holders of the [Class MV-2] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(vii) to the Holders of the [Class MV-3] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(viii) to the Holders of the [Class MV-3] Notes, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
(ix) to the Holders of the [Class MV-4] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(x) to the Holders of the [Class MV-4] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(xi) to the Holders of the [Class MV-5] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(xii) to the Holders of the [Class MV-5] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(xiii) to the Holders of the [Class MV-6] Notes, in an amount
equal to any Interest Carry Forward Amount for such Class;
128
(xiv) to the Holders of the [Class MV-6] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(xv) to the Holders of the [Class MV-7] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(xvi) to the Holders of the [Class MV-7] Notes, in an amount equal
to the Unpaid Realized Loss Amount for such Class;
(xvii) to the Holders of the [Class MV-8] Notes, in an amount
equal to any Interest Carry Forward Amount for such Class;
(xviii) to the Holders of the [Class MV-8] Notes, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
(xix) to the Holders of the [Class BV] Notes, in an amount equal
to any Interest Carry Forward Amount for such Class;
(xx) to the Holders of the [Class BV] Notes, in an amount equal to
the Unpaid Realized Loss Amount for such Class;
(xxi) to each Class of [Group AV] Notes and Adjustable Rate
Subordinate Notes (in each case after application of amounts received
under the applicable Interest Rate Cap Agreement to cover Net Rate
Carryover), [pro rata] based on the Note Principal Amounts thereof, to
the extent needed to pay any Net Rate Carryover for each such Class
remaining after application of amounts under the applicable Interest
Rate Cap Agreement; provided that any Adjustable Rate Pool Excess
Cashflow remaining after such allocation to pay Net Rate Carryover based
on the Note Principal Amounts of the Notes shall be distributed to each
Class of [Group AV]Notes and Adjustable Rate Subordinate Notes with
respect to which there remains any unpaid Net Rate Carryover (after the
distribution based on Note Principal Amounts), [pro rata], based on the
amount of such unpaid Net Rate Carryover;
(xxii) if the Fixed Rate Overcollateralization Target Amount has
at any previous time been met, to the Holders of the Class or Classes of
[Group AF] Notes and Fixed Rate Subordinate Notes then entitled to
receive distributions in respect of principal, payable to such Holders
as part of the Principal Distribution Amount pursuant to Section 6.02(d)
above, in an amount equal to the Extra Principal Distribution Amount for
[Pool 1] not covered by the Fixed Rate Pool Excess Cashflow or Credit
Comeback Excess Cashflow;
(xxiii) to the Holders of the [Class MF-1] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the ]Class MF-1] Notes
remaining undistributed after application of the Fixed Rate Pool Excess
Cashflow and Credit Comeback Excess Cashflow;
(xxiv) to the Holders of the [Class MF-2] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class MF-2] Notes
remaining undistributed after
129
application of the Fixed Rate Pool Excess Cashflow and Credit Comeback
Excess Cashflow;
(xxv) to the Holders of the [Class MF-3] Notes, in an amount equal
to the Unpaid Realized Loss Amount for the [Class MF-3] Notes remaining
undistributed after application of the Fixed Rate Pool Excess Cashflow
and Credit Comeback Excess Cashflow;
(xxvi) to the Holders of the [Class MF-4] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class MF-4] Notes
remaining undistributed after application of the Fixed Rate Pool Excess
Cashflow and Credit Comeback Excess Cashflow;
(xxvii) to the Holders of the [Class MF-5] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class MF-5] Notes
remaining undistributed after application of the Fixed Rate Pool Excess
Cashflow and Credit Comeback Excess Cashflow;
(xxviii) to the Holders of the [Class MF-6] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class MF-6] Notes
remaining undistributed after application of the Fixed Rate Pool Excess
Cashflow and Credit Comeback Excess Cashflow;
(xxix) to the Holders of the [Class MF-7] Notes, in an amount
equal to the Unpaid Realized Loss Amount for the [Class MF-7] Notes
remaining undistributed after application of the Fixed Rate Pool Excess
Cashflow and Credit Comeback Excess Cashflow;
(xxx) to the Holders of the [Class MF-8] Notes, in an amount equal
to the Unpaid Realized Loss Amount for the [Class MF-8] Notes remaining
undistributed after application of the Fixed Rate Pool Excess Cashflow
and Credit Comeback Excess Cashflow;
(xxxi) to the Holders of the [Class BF] Notes, in an amount equal
to the Unpaid Realized Loss Amount for the [Class BF] Notes remaining
undistributed after application of the Fixed Rate Pool Excess Cashflow
and Credit Comeback Excess Cashflow; and
(xxxii) any amounts remaining shall be paid by the Trust
Administrator to the Ownership Certificate.
(h) On the Redemption Date, the Trust Administrator (or the Paying Agent
on behalf of the Trust Administrator) shall pay to each Class of Notes the
related Termination Price therefor, as set forth in the Indenture.
Section 6.03. [Reserved].
Section 6.04. Control of the Trust Account and Deferred Interest.
130
(a) The Depositor and the Issuer hereby appoint ____________________ as
Securities Intermediary with respect to the Trust Account, and the Issuer has,
pursuant to the Indenture, granted to the Indenture Trustee, for the benefit
of the Noteholders, a security interest to secure all amounts due Noteholders
hereunder in and to the Trust Account and the Security Entitlements to all
Financial Assets credited to the Trust Account, including without limitation
all amounts, securities, investments, Financial Assets, investment property
and other property from time to time deposited in or credited to the Trust
Account and all proceeds thereof. Amounts held from time to time in the Trust
Account will continue to be held by the Securities Intermediary for the
benefit of the Indenture Trustee, as collateral agent, for the benefit of the
Noteholders. Upon the termination of the Issuer or the discharge of the
Indenture, the Indenture Trustee shall inform the Securities Intermediary of
such termination. By acceptance of their Notes or interests therein, the
Noteholders shall be deemed to have appointed ____________________ as
Securities Intermediary. ____________________ hereby accepts such appointment
as Securities Intermediary.
(b) With respect to the Trust Account Property credited to the Trust
Account, the Securities Intermediary agrees that:
(i) with respect to any Trust Account Property that is held in
deposit accounts, each such deposit account shall be subject to the
exclusive custody and control of the Securities Intermediary, and the
Securities Intermediary shall have sole signature authority with respect
thereto;
(ii) the sole assets permitted in the Trust Account shall be those
as the Securities Intermediary agrees to treat as Financial Assets; and
(iii) any such Trust Account Property that is, or is treated as, a
Financial Asset shall be physically delivered (accompanied by any
required endorsements) to, or credited to an account in the name of, the
Securities Intermediary or other eligible institution maintaining the
Trust Account in accordance with the Securities Intermediary's customary
procedures such that the Securities Intermediary or such other
institution establishes a Security Entitlement in favor of the Indenture
Trustee with respect thereto over which the Securities Intermediary or
such other institution has Control;
(c) The Securities Intermediary hereby confirms that (A) the Trust
Account is an account to which Financial Assets are or may be credited, and
the Securities Intermediary shall, subject to the terms of this Agreement,
treat the Indenture Trustee, as collateral agent, as entitled to exercise the
rights that comprise any Financial Asset credited to the Trust Account, (B)
all Trust Account Property in respect of the Trust Account will be promptly
credited by the Securities Intermediary to such account, and (C) all
securities or other property underlying any Financial Assets credited to the
Trust Account shall be registered in the name of the Securities Intermediary,
endorsed to the Securities Intermediary or in blank or credited to another
securities account maintained in the name of the Securities Intermediary and
in no case will any Financial Asset credited to the Trust Account be
registered in the name of the Depositor or the Issuer, payable to the order of
the Depositor or the Issuer or specially endorsed to the Depositor or the
Issuer, except to the extent the foregoing have been specially endorsed to the
Securities Intermediary or in blank;
131
(d) The Securities Intermediary hereby agrees that each item of property
(whether investment property, Financial Asset, security, instrument or cash)
credited to the Trust Account shall be treated as a Financial Asset;
(e) If at any time the Securities Intermediary shall receive an
Entitlement Order from the Indenture Trustee (or the Trust Administrator on
its behalf) directing transfer or redemption of any Financial Asset relating
to the Trust Account, the Securities Intermediary shall comply with such
Entitlement Order without further consent by the Depositor, the Issuer or any
other Person. If at any time the Indenture Trustee or the Trust Administrator
notifies the Securities Intermediary in writing that the Issuer has been
terminated or the Indenture discharged in accordance herewith and with the
Trust Agreement or the Indenture, as applicable, and the security interest
granted pursuant to the Indenture has been released, then thereafter if the
Securities Intermediary shall receive any order from the Depositor or the
Issuer directing transfer or redemption of any Financial Asset relating to the
Trust Account, the Securities Intermediary shall comply with such Entitlement
Order without further consent by the Indenture Trustee or any other Person;
(f) In the event that the Securities Intermediary has or subsequently
obtains by agreement, operation of law or otherwise a security interest in the
Trust Account or any Financial Asset credited thereto, the Securities
Intermediary hereby agrees that such security interest shall be subordinate to
the security interest of the Indenture Trustee. The Financial Assets credited
to the Trust Account will not be subject to deduction, set-off, banker's lien,
or any other right in favor of any Person other than the Indenture Trustee
(except that the Securities Intermediary may set-off (i) all amounts due to it
in respect of its customary fees and expenses for the routine maintenance and
operation of the Trust Account and (ii) the face amount of any checks which
have been credited to the Trust Account but are subsequently returned unpaid
because of uncollected or insufficient funds);
(g) There are no other agreements entered into between the Securities
Intermediary in such capacity and the Depositor or the Issuer with respect to
the Trust Account. In the event of any conflict between this Agreement (or any
provision of this Agreement) and any other agreement now existing or hereafter
entered into, the terms of this Agreement shall prevail;
(h) The rights and powers granted under the Indenture and herein to the
Indenture Trustee have been granted in order to perfect its security interest
in the Trust Account and the Security Entitlements to the Financial Assets
credited thereto, and are powers coupled with an interest and will neither be
affected by the bankruptcy of the Depositor or the Issuer nor by the lapse of
time. The obligations of the Securities Intermediary hereunder shall continue
in effect until the security interest of the Indenture Trustee in the Trust
Account, and in such Security Entitlements, has been terminated pursuant to
the terms of this Agreement and the Indenture Trustee or the Issuer, as
applicable, has notified the Securities Intermediary of such termination in
writing; and
(i) Notwithstanding anything else contained herein, the Depositor and
the Issuer agree that the Trust Account will be established only with the
Securities Intermediary or another institution meeting the requirements of
this Section, which by acceptance of its appointment as Securities
Intermediary agrees substantially as follows: (1) it will comply with
Entitlement
132
Orders related to the Trust Account issued by the Indenture Trustee, as
collateral agent, without further consent by the Depositor or the Issuer,
without further consent by the Depositor; (2) until termination of the Issuer
or discharge of the Indenture, it will not enter into any other agreement
related to such accounts pursuant to which it agrees to comply with
Entitlement Orders of any Person other than the Indenture Trustee, as
collateral agent, or the Trust Administrator on its behalf; and (3) all assets
delivered or credited to it in connection with such account and all
investments thereof will be promptly credited to the applicable account.
(j) Notwithstanding the foregoing, the Issuer shall have the power,
revocable by the Indenture Trustee or by the Owner Trustee with the consent of
the Indenture Trustee, to instruct the Indenture Trustee, the Trust
Administrator and the Master Servicer to make withdrawals and payments from
the Trust Account for the purpose of permitting the Master Servicer, the Trust
Administrator or the Owner Trustee to carry out its respective duties
hereunder or permitting the Indenture Trustee to carry out its duties under
the Indenture.
(k) Each of the Depositor and the Issuer agrees to take or cause to be
taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments
(including, without limitation, any financing statements under the Relevant
UCC or this Agreement) as may be necessary to perfect the interests created by
this Section in favor of the Issuer and the Indenture Trustee and otherwise
fully to effectuate the purposes, terms and conditions of this Section. The
Depositor shall:
(i) promptly execute, deliver and file any financing statements,
amendments, continuation statements, assignments, Notes and other
documents with respect to such interests and perform all such other acts
as may be necessary in order to perfect or to maintain the perfection of
the Issuer's and the Indenture Trustee's security interest in the Trust
Account Property; and
(ii) make the necessary filings of financing statements or
amendments thereto within [five] days after the occurrence of any of the
following: (1) any change in its corporate name or any trade name or its
jurisdiction of organization; (2) any change in the location of its
chief executive office or principal place of business; and (3) any
merger or consolidation or other change in its identity or corporate
structure and promptly notify the Issuer and the Indenture Trustee of
any such filings.
(iii) Neither the Depositor nor the Issuer shall organize under
the law of any jurisdiction other than the State under which each is
organized as of the Closing Date (whether changing its jurisdiction of
organization or organizing under an additional jurisdiction) without
giving [30] days prior written notice of such action to its immediate
and mediate transferee, including the Indenture Trustee. Before
effecting such change, each of the Depositor or the Issuer proposing to
change its jurisdiction of organization shall prepare and file in the
appropriate filing office any financing statements or other statements
necessary to continue the perfection of the interests of its immediate
and mediate transferees, including the Indenture Trustee, in the Trust
Account Property. In connection with the transactions contemplated by
the Operative Agreements relating to the Trust Account Property, each of
the Depositor and the Issuer authorizes its immediate or mediate
transferee to file in any filing office any initial financing
statements, any
133
amendments to financing statements, any continuation statements, or any
other statements or filings described in this Section 6.04.
None of the Securities Intermediary or any director, officer, employee
or agent of the Securities Intermediary shall be under any liability to the
Indenture Trustee or the Noteholders for any action taken, or not taken, in
good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Securities Intermediary
against any liability to the Indenture Trustee or the Noteholders which would
otherwise be imposed by reason of the Securities Intermediary's willful
misconduct, bad faith or negligence in the performance of its obligations or
duties hereunder. The Securities Intermediary and any director, officer,
employee or agent of the Securities Intermediary may rely in good faith on any
document of any kind which, prima facie, is properly executed and submitted by
any Person respecting any matters arising hereunder. The Securities
Intermediary shall be under no duty to inquire into or investigate the
validity, accuracy or content of such document. The Issuer shall indemnify the
Securities Intermediary for and hold it harmless against any loss, liability
or expense arising out of or in connection with this Agreement and carrying
out its duties hereunder, including the costs and expenses of defending itself
against any claim of liability, except in those cases where the Securities
Intermediary has been guilty of bad faith, negligence or willful misconduct.
The foregoing indemnification shall survive any termination of this Agreement
or the resignation or removal of the Securities Intermediary.
Section 6.05. Advances by Master Servicer and Servicer.
(a) Subject to Section 4.03(c), Advances shall be made in respect of
each Servicer Remittance Date as provided herein. If, on any Determination
Date, the Servicer determines that any Scheduled Payments due during the
related Collection Period have not been received, such Servicer shall advance
such amount to the extent provided in Section 4.03(c) hereof. If any Servicer
fails to remit Advances required to be made under Section 4.03(c) hereof, the
Master Servicer shall itself make, or shall cause the successor Servicer to
make, such Advance on the Servicer Remittance Date immediately following such
Determination Date. If the Master Servicer determines that an Advance is
required, it shall on the Business Day immediately prior to the related
Payment Date remit to the Trust Administrator from its own funds (or funds
advanced by the applicable Servicer) for deposit in the Collection Account
immediately available funds in an amount equal to such Advance. The Master
Servicer and the Servicer shall be entitled to be reimbursed from the
Collection Account, and the Servicer shall be entitled to be reimbursed from
its respective Custodial Account, for all Advances made by it as provided in
Section 4.02(e). Notwithstanding anything to the contrary herein, in the event
the Master Servicer determines in its reasonable judgment that an Advance is a
Nonrecoverable Advance, the Master Servicer shall be under no obligation to
make such Advance.
(b) In the event that the Master Servicer or Servicer fails for any
reason to make an Advance required to be made pursuant to this Section 6.05,
the Indenture Trustee, as successor Master Servicer, shall, on or before the
related Payment Date, deposit in the Collection Account an amount equal to the
excess of (a) Advances required to be made by the Master Servicer or the
Servicer that would have been deposited in such Collection Account over (b)
the amount of any Advance made by the Master Servicer or the Servicer with
respect to such Payment Date; provided, however, that the Indenture Trustee as
successor Master Servicer shall be required to
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make such Advance only if it is not prohibited by law from doing so and it has
determined that such Advance would be recoverable from amounts to be received
with respect to such Mortgage Loan, including late payments, Liquidation
Proceeds, Insurance Proceeds, or otherwise. The Indenture Trustee shall be
entitled to be reimbursed from the Collection Account for Advances made by it
pursuant to this Section 6.05 as if it were the Master Servicer and shall be
entitled to receive all compensation and fees of the Master Servicer in
accordance with Section 8.01(b).
Section 6.06. The Interest Rate Cap Agreements.
(a) The Trust Administrator shall establish and maintain an Eligible
Account in its name, in trust for the benefit of the Noteholders, the Interest
Rate Cap Account.
(b) The Trust Administrator shall deposit any Interest Rate Cap Receipts
received with respect to any Interest Rate Cap Agreement Payment Date into the
Interest Rate Cap Account. Amounts on deposit in the Interest Rate Cap Account
shall remain uninvested.
(c) On each [Class AF-1A] Cap Agreement Payment Date, the Trust
Administrator shall withdraw from the Interest Rate Cap Account any Interest
Rate Cap Receipts from the [Class AF-1A] Cap Agreement to make payments in the
order of priority and to the extent specified in Section 6.02(f)(iii)(1);
provided, that on each Payment Date on which there is a payment received by
the Trust Administrator under the [Class AF-1A] Cap Agreement that is based on
a notional amount in excess of the aggregate Class Principal Amount of the
Class [1A1] and Class [1A__] Notes (such amount, the "Excess [Class AF-1A] Cap
Amount"), then the Trust Administrator shall pay (i) the Excess [Class AF-1A]
Cap Amount to the Ownership Certificate and (ii) the excess of such Interest
Rate Cap Receipts over the Excess [Class AF-1A] Cap Amount for such Payment
Date in the order of priority and to the extent specified in Section
6.02(f)(iii)(1) of this Agreement.
(d) On each [Group 2-AV] Cap Agreement Payment Date, the Trust
Administrator shall withdraw from the Interest Rate Cap Account any Interest
Rate Cap Receipts from the [Group 2-AV] Cap Agreement to make payments in the
order of priority and to the extent specified in Section 6.02(f)(iii)(2);
provided, that on each Payment Date on which there is a payment received by
the Trust Administrator under the [Group 2-AV] Cap Agreement that is based on
a notional amount in excess of the aggregate Class Principal Amount of the
[Class 2-AV-1] and [Class 2-AV-1] Notes (such amount, the "Excess [Class 2-AV]
Cap Amount"), then the Trust Administrator shall pay (i) the Excess [Group
2-AV] Cap Amount to the Ownership Certificate and (ii) the excess of such
Interest Rate Cap Receipts over the Excess [Group 2-AV] Cap Amount for such
Payment Date in the order of priority and to the extent specified in Section
6.02(f)(iii)(2) of this Agreement.
(e) On each [Group 3-AV] Cap Agreement Payment Date, the Trust
Administrator shall withdraw from the Interest Rate Cap Account any Interest
Rate Cap Receipts from the [Group 3-AV] Cap Agreement to make payments in the
order of priority and to the extent specified in Section 6.02(f)(iii)(2);
provided, that on each Payment Date on which there is a payment received by
the Trust Administrator under the [Group 3-AV] Cap Agreement that is based on
a notional amount in excess of the aggregate Class Principal Amount of the
[Class 3-AV-1], [Class 3-AV-2], [Class 3-AV-3] and [Class 3-AV-4] Notes (such
amount, the "Excess
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[Group 3-AV] Cap Amount"), then the Trust Administrator shall pay (i) the
Excess [Group 3-AV] Cap Amount to the Ownership Certificate and (ii) the
excess of such Interest Rate Cap Receipts over the Excess [Group 3-AV] Cap
Amount for such Payment Date in the order of priority and to the extent
specified in Section 6.02(f)(iii)(2) of this Agreement.
(f) On each Subordinate Cap Agreement Payment Date, the Trust
Administrator shall withdraw from the Interest Rate Cap Account any Interest
Rate Cap Receipts from the Subordinate Cap Agreement to make payments in the
order of priority and to the extent specified in Section 6.02(f)(iii)(3);
provided, that on each Payment Date on which there is a payment received by
the Trust Administrator under the Subordinate Cap Agreement that is based on a
notional amount in excess of the aggregate Class Principal Amount of the
Subordinate Notes (such amount, the "Excess Subordinate Cap Amount"), then the
Trust Administrator shall pay (i) the Excess Subordinate Cap Amount to the
Ownership Certificate and (ii) the excess of such Interest Rate Cap Receipts
over the Excess Subordinate Cap Amount for such Payment Date in the order of
priority and to the extent specified in Section 6.02(f)(iii)(3) of this
Agreement.
(g) On the Payment Date in _________ 200_, after any amounts therefrom
have been paid in accordance with Section 6.06(c), (d) and (e) above, any
amounts remaining in the Interest Rate Cap Account shall be paid by the Trust
Administrator to the Ownership Certificate, and the Interest Rate Cap Account
shall be terminated by the Trust Administrator.
Section 6.07. [[Class AF-5B] Policy; Rights of the [Class AF-5B]
Insurer.
(a) If, on the [third] Business Day before any Payment Date, the Trust
Administrator determines that a there will be a Deficiency Amount for such
Payment Date, the Trust Administrator shall determine the amount of any such
deficiency and shall give notice to the [Class AF-5B] Insurer by telephone or
telecopy of the amount of such deficiency, confirmed in writing by notice
substantially in the form of Exhibit A to the [Class AF-5B] Policy, by
________, [New York time] on such [third] Business Day. The Trust
Administrator's responsibility for delivering the notice to the [Class AF-5B]
Insurer as provided in the preceding sentence is limited to the availability,
timeliness and accuracy of the information provided by the Master Servicer.
(b) In the event the Trust Administrator receives a certified copy of an
order of the appropriate court that any scheduled payment of principal or
interest on a [Class AF-5B] Note has been voided in whole or in part as a
preference payment under applicable bankruptcy law, the Trust Administrator
shall (i) promptly notify the [Class AF-5B] Insurer and (ii) comply with the
provisions of the [Class AF-5B] Policy, to obtain payment by the [Class AF-5B]
Insurer of such voided scheduled payment. In addition, the Trust Administrator
shall mail notice to all Holders of the [Class AF-5B] Notes so affected that,
in the event that any such Holder's scheduled payment is so recovered, such
Holder will be entitled to payment pursuant to the terms of the [Class AF-5B]
Policy, a copy of which shall be made available to such Holders by the Trust
Administrator. The Trust Administrator shall furnish to the [Class AF-5B]
Insurer its records listing the payments on the affected [Class AF-5B] Notes,
if any, that have been made by the Trust Administrator and subsequently
recovered from the affected Holders, and the dates on which such payments were
made by the Trust Administrator.
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(c) At the time of the execution hereof, and for the purposes hereof,
the Trust Administrator shall establish a special purpose trust account in the
name of the Trust Administrator for the benefit of Holders of the [Class
AF-5B] Notes (the "[Class AF-5B] Policy Payments Account") over which the
Trust Administrator shall have exclusive control and sole right of withdrawal.
The [Class AF-5B] Policy Payments Account shall be an Eligible Account. The
Trust Administrator shall deposit any amount paid under the [Class AF-5B]
Policy into the [Class AF-5B] Policy Payments Account and distribute such
amount only for the purposes of making the payments to Holders of the [Class
AF-5B] Notes, in respect of the related Deficiency Amount for which the
related claim was made under the [Class AF-5B] Policy. Such amounts shall be
allocated by the Trust Administrator to Holders of [Class AF-5B] Notes
affected by such shortfalls in the same manner as principal and interest
payments are to be allocated with respect to such Certificates pursuant to
Section 6.02. It shall not be necessary for such payments to be made by checks
or wire transfers separated from the checks or wire transfers used to make
regular payments hereunder with funds withdrawn from the Collection Account.
However, any payments made on the [Class AF-5B] Notes from funds in the [Class
AF-5B] Policy Payments Account shall be noted as provided in subsection (e)
below. Funds held in the [Class AF-5B] Policy Payments Account shall not be
invested by the Trust Administrator.
(d) Any funds received from the [Class AF-5B] Insurer for deposit into
the [Class AF-5B] Policy Payments Account pursuant to the [Class AF-5B] Policy
in respect of a Payment Date or otherwise as a result of any claim under the
[Class AF-5B] Policy shall be applied by the Trust Administrator directly to
the payment in full (i) of the related Deficiency Amount on such Payment Date
or (ii) of other amounts payable under the [Class AF-5B] Policy. Funds
received by the Trust Administrator as a result of any claim under the [Class
AF-5B] Policy shall be used solely for payment to the Holders of the [Class
AF-5B] Notes and may not be applied for any other purpose, including, without
limitation, satisfaction of any costs, expenses or liabilities of the Trust
Administrator, the Master Servicer or the Trust Fund. Any funds remaining in
the [Class AF-5B] Policy Payments Account on the [first] Business Day after
each Payment Date shall be remitted promptly to the [Class AF-5B] Insurer in
accordance with the instructions set forth in Section 6.02.
(e) The Trust Administrator shall keep complete and accurate records in
respect of (i) all funds remitted to it by the [Class AF-5B] Insurer and
deposited into the [Class AF-5B] Policy Payments Account and (ii) the
allocation of such funds to (A) payments of interest on and principal in
respect of any [Class AF-5B] Notes and (B) the amount of funds available to
make distributions on the [Class AF-5B] Notes pursuant to Sections 6.02. The
[Class AF-5B] Insurer shall have the right to inspect such records at
reasonable times during normal business hours upon [three] Business Days'
prior notice to the Trust Administrator.
(f) The Trust Administrator acknowledges, and each Holder of a [Class
AF-5B] Note by its acceptance of the [Class AF-5B] Note agrees, that, without
the need for any further action on the part of the [Class AF-5B] Insurer or
the Trust Administrator, to the extent the [Class AF-5B] Insurer makes
payments, directly or indirectly, on account of principal of or interest on
any [Class AF-5B] Notes, the [Class AF-5B] Insurer will be fully subrogated to
the rights of the Holders of such [Class AF-5B] Notes to receive such
principal and interest from the Trust Fund. The Holders of the [Class AF-5B]
Notes, by acceptance of the [Class AF-5B] Notes, assign their rights as
Holders of the [Class AF-5B] Notes to the extent of the [Class AF-5B]
Insurer's interest
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with respect to amounts paid under the [Class AF-5B] Policy. Anything herein
to the contrary notwithstanding, solely for purposes of determining the [Class
AF-5B] Insurer's rights, as applicable, as subrogee for payments distributable
pursuant to Section 6.02, any payment with respect to distributions to the
[Class AF-5B] Notes which is made with funds received pursuant to the terms of
the [Class AF-5B] Policy shall not be considered payment of the [Class AF-5B]
Notes from the Trust Fund and shall not result in the distribution or the
provision for the distribution in reduction of the Note Principal Amount of
the [Class AF-5B] Notes within the meaning of Article VI.
(g) Upon its becoming aware of the occurrence of an Event of Default,
the Trust Administrator shall promptly notify the [Class AF-5B] Insurer of
such Event of Default.
(h) The Trust Administrator shall promptly notify the [Class AF-5B]
Insurer of either of the following as to which it has actual knowledge: (A)
the commencement of any proceeding by or against the Depositor commenced under
the United States bankruptcy code or any other applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (an "Insolvency
Proceeding") and (B) the making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential transfer (a "Preference
Claim") of any distribution made with respect to the [Class AF-5B] Notes as to
which it has actual knowledge. Each Holder of a [Class AF-5B] Note, by its
purchase of [Class AF-5B] Notes, and the Trust Administrator hereby agrees
that the [Class AF-5B] Insurer (so long as no [Class AF-5B] Insurer Default
exists) may at any time during the continuation of any proceeding relating to
a Preference Claim direct all matters relating to such Preference Claim,
including, without limitation, (i) the direction of any appeal of any order
relating to any Preference Claim and (ii) the posting of any surety,
supersedes or performance bond pending any such appeal. In addition and
without limitation of the foregoing, the [Class AF-5B] Insurer shall be
subrogated to the rights of the Trust Administrator and each Holder of a
[Class AF-5B] Note in the conduct of any Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference
Claim.
(i) The Master Servicer shall designate a [Class AF-5B] Insurer Contact
Person who shall be available to the [Class AF-5B] Insurer to provide
reasonable access to information regarding the Mortgage Loans. The initial
[Class AF-5B] Insurer Contact Person is to the attention of Secondary
Marketing.
(j) The Trust Administrator shall surrender the [Class AF-5B] Policy to
the [Class AF-5B] Insurer for cancellation upon the reduction of the Note
Principal Amount of the [Class AF-5B] Notes to zero.
(k) For so long as there is no continuing default by the [Class AF-5B]
Insurer under its obligations under the [Class AF-5B] Policy (a "[Class AF-5B]
Insurer Default"), each Holder of a [Class AF-5B] Note agrees that the [Class
AF-5B] Insurer shall be treated by the Depositor, the Master Servicer and the
Trust Administrator as if the [Class AF-5B] Insurer were the Holder of all of
the [Class AF-5B] Notes, for the purpose (and solely for the purpose) of the
giving of any consent, the making of any direction or the exercise of any
voting or other control rights otherwise given to the Holders of the [Class
AF-5B] Notes hereunder.
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(l) With respect to this Section 6.07, the terms "Receipt" and
"Received" shall mean actual delivery to the [Class AF-5B] Insurer, if any,
prior to _______, [New York time], on a Business Day; delivery either on a day
that is not a Business Day or after _____, [New York time], shall be deemed to
be Receipt on the next succeeding Business Day. If any notice or certificate
given under the [Class AF-5B] Policy by the Trust Administrator is not in
proper form or is not properly completed, executed or delivered, it shall be
deemed not to have been Received. The [Class AF-5B] Insurer shall promptly so
advise the Trust Administrator and the Trust Administrator may submit an
amended notice.
(m) All notices, statements, reports, certificates or opinions required
by this Agreement to be sent to the Rating Agencies or the [Class AF-5B]
Noteholders shall also be sent at such time to the [Class AF-5B] Insurer.
(n) The [Class AF-5B] Insurer shall be an express third party
beneficiary of this Agreement for the purpose of enforcing the provisions
hereof to the extent of the [Class AF-5B] Insurer's rights explicitly
specified herein as if a party hereto.
(o) All references herein to the ratings assigned to the Notes and to
the interests of any Noteholders shall be without regard to the [Class AF-5B]
Policy, in the case of the [Class AF-5B] Notes.]
ARTICLE VII
ADMINISTRATION OF THE AGREEMENTS
Section 7.01. Duties of the Trust Administrator.
(a) The Trust Administrator agrees to perform all of the duties of the
Issuer under the Depository Agreement. In addition to its duties performed
under the Depository Agreement, the Trust Administrator shall take such action
that is the duty of the Issuer to take with respect to the following matters
under the Trust Agreement, this Agreement and the Indenture:
(i) the duty to cause the Note Register to be kept if the Issuer
assumes the duties of Note Registrar, and to give the Indenture Trustee
notice of any appointment of a new Note Registrar and the location, or
change in location, of the Note Register (Section 2.04 of the
Indenture);
(ii) the duty to cause the Certificate Register to be kept if the
Issuer assumes the duties of Certificate Registrar, and to give the
Owner Trustee notice of any appointment of a new Certificate Registrar
and the location, or change in location, of the Certificate Register
(Section 3.03 of the Trust Agreement);
(iii) causing the preparation of the Notes for execution by the
Owner Trustee upon the registration of any transfer or exchange of the
Notes (Sections 2.04 and 2.05 of the Indenture);
(iv) causing the preparation of Definitive Notes in accordance
with the instructions of any Clearing Agency, the duty to attempt to
locate a qualified successor to
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the Clearing Agency, if necessary, and the preparation of written notice
to the Indenture Trustee of termination of the book-entry system through
the Clearing Agency (Section 2.12 of the Indenture);
(v) the maintenance of an office for registration of transfer or
exchange of Notes (Section 3.02 of the Indenture);
(vi) the maintenance of an office for registration of transfer or
exchange of the Ownership Certificate (Section 3.08 of the Trust
Agreement);
(vii) the calculation of accrual of original issue discount and
the amortization of premium on the Notes (clause (v) of the fourth
paragraph of Section 3.03 of the Indenture);
(viii) upon written notice or actual knowledge thereof, the
notification to the Indenture Trustee and each Rating Agency of a
Servicer Event of Default or a Master Servicer Event of Default under
this Agreement (Section 3.07(d) of the Indenture);
(ix) upon written notice or actual knowledge thereof, the delivery
of notice to the Indenture Trustee and each Rating Agency of each
Indenture Event of Default under the Indenture (Section 3.19 of the
Indenture);
(x) the furnishing of the Indenture Trustee with the names and
addresses of Holders of Notes during any period when the Indenture
Trustee is not the Note Registrar (Section 7.01 of the Indenture);
(xi) causing the preparation of any continuation statements or
amendments necessary to protect the Collateral (Section 3.05 of the
Indenture);
(xii) the mailing to the Noteholders of notices with respect to
their consent to any supplemental indentures (Sections 9.01, 9.02, 9.03
and 9.06 of the Indenture); and
(xiii) any other duties expressly required to be performed by the
Trust Administrator under the Indenture or the Trust Agreement.
(b) The Seller shall undertake the duties of the Issuer with respect to
the following matters under the Indenture:
(i) to cause the preparation of Issuer Orders (and execute the
same on behalf of the Issuer) (Sections 9.01 and 9.02);
(ii) to obtain Opinions of Counsel with respect to the execution
of supplemental indentures and, if necessary, to mail to the Noteholders
notices with respect to their consent to such supplemental indentures
(Sections 9.01, 9.02, 9.03 and 9.07 of the Indenture);
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(iii) the preparation (but not the execution) of the annual
Officer's Certificate regarding the Issuer's compliance with the terms
of the Indenture (Section 3.09 of the Indenture); and
(iv) causing the preparation of an Officer's Certificate and the
obtaining of the Opinion of Counsel (which shall not be at the expense
of the Trust Administrator) with respect to any request by the Issuer to
the Indenture Trustee to take any action under the Indenture (Sections
4.01 and 11.01 of the Indenture);
(v) the compliance with any request of the Indenture Trustee with
respect to the sale of the Collateral in a commercially reasonable
manner if an Indenture Event of Default shall have occurred and be
continuing under the Indenture (Section 5.04 of the Indenture); and
(vi) causing the preparation of an Issuer Request and Officer's
Certificate (and executing the same on behalf of the Issuer) and the
obtaining of an Opinion of Counsel (which shall not be at the expense of
the Trust Administrator), if necessary, for the release of the
Collateral, as defined in the Indenture (Section 8.03 of the Indenture).
(c) The Issuer will indemnify the Owner Trustee, the Seller and the
Trust Administrator, and their respective agents for, and hold them harmless
against, any losses, liability or expense incurred without gross negligence or
bad faith on their part, arising out of or in connection with the acceptance
or administration of the transactions contemplated by the Trust Agreement or
this Agreement, including the reasonable costs and expenses of defending
themselves against any claim or liability in connection with the exercise or
performance of any of their powers or duties under the Trust Agreement, the
Indenture or this Agreement.
(d) Subject to subsection (e) of this Section 7.01, and in accordance
with the directions of the Owner Trustee, the Trust Administrator shall
perform or supervise the performance of such other activities in connection
with the Collateral (including the Operative Agreements) as are not covered by
any of the foregoing provisions and as are expressly requested in writing by
the Owner Trustee and are reasonably within the capability of the Trust
Administrator.
(e) In carrying out the foregoing duties or any of its other obligations
under this Agreement, the Trust Administrator may enter into transactions with
or otherwise deal with any of its Affiliates; provided, however, that the
terms of any such transactions or dealings shall be in accordance with any
directions received from the Issuer and shall be, in the Trust Administrator's
opinion, no less favorable to the Issuer than would be available from
unaffiliated parties.
In carrying out the foregoing duties or any of its other obligations
under this Agreement, the Trust Administrator shall be subject to the same
standard of care and have the same rights, indemnifications and immunities as
the Indenture Trustee under the Indenture, including, without limitation, the
right to reimbursement and indemnification on behalf of the Issuer from funds
in the Collection Account for all losses, costs and expenses of any kind or
nature (including without limitation attorneys' fees and disbursements)
incurred by the Trust Administrator (including
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without limitation in its various capacities as Paying Agent, Certificate
Paying Agent, Certificate Registrar and Note Registrar) in connection with the
performance of its duties hereunder or under any other Operative Agreement.
The Trust Administrator in its capacity as the Certificate Registrar,
and upon a request received from the Owner Trustee, shall promptly notify the
Certificateholders of (i) any change in the Corporate Trust Office of the
Owner Trustee, (ii) any amendment to the Trust Agreement requiring notice be
given to the Certificateholders and (iii) any other notice required to be
given to the Certificateholders by the Owner Trustee under the Trust
Agreement.
Section 7.02. Duties of the Trust Administrator With Respect to the
Indenture, the Trust Agreement and this Agreement.
(a) The Trust Administrator shall take all appropriate action with
respect to the following matters under the Indenture, the Trust Agreement and
this Agreement:
(i) the duties of an authenticating agent for authentication of
the Notes (Sections 2.01, 2.02, 2.05 and 2.10 of the Indenture);
(ii) the duties of Note Registrar to be kept (Sections 2.03, 2.04
and 2.07 of the Indenture);
(iii) to provide notices and instructions to the Clearing Agency
(Section 2.11 of the Indenture);
(iv) the duties of Paying Agent (Sections 3.03, 4.01, 4.02 and
5.02 of the Indenture); and
(v) the duties of agent or attorney-in-fact for the purposes of
filing amendments and continuation statements for the Issuer (Section
3.05 of the Indenture).
(b) The Issuer will indemnify the Owner Trustee and the Trust
Administrator, and their respective agents for, and hold them harmless
against, any losses, liability or expense incurred without gross negligence or
bad faith on their part, arising out of or in connection with the acceptance
or administration of the transactions contemplated by the Trust Agreement or
this Agreement, including the reasonable costs and expenses of defending
themselves against any claim or liability in connection with the exercise or
performance of any of their powers or duties under the Trust Agreement, the
Indenture or this Agreement.
Section 7.03. Records. The Trust Administrator shall maintain
appropriate books of account and records relating to services performed
hereunder, which books of account and records shall be accessible for
inspection by the Issuer and the Depositor at any time during normal business
hours.
Section 7.04. Compensation. The Trust Administrator will perform the
duties and provide the services called for under Sections 7.01 and 7.02 above
for such compensation as shall be agreed upon between the Trust Administrator
and the Master Servicer.
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Section 7.05. Additional Information to be Furnished to the Issuer. The
Depositor shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
Section 7.06. Independence of the Trust Administrator. For all purposes
of this Agreement, the Trust Administrator shall be an independent contractor
and shall not be subject to the supervision of the Issuer or the Owner Trustee
with respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the Trust
Administrator shall have no authority to act for or represent the Issuer or
the Owner Trustee in any way and shall not otherwise be deemed an agent of the
Issuer or the Owner Trustee.
Section 7.07. No Joint Venture. Nothing contained in this Agreement (i)
shall constitute the Trust Administrator or the Depositor, respectively, and
either of the Issuer or the Owner Trustee, as members of any partnership,
joint venture, association, syndicate, unincorporated business or other
separate entity, (ii) shall be construed to impose any liability as such on
any of them or (iii) shall be deemed to confer on any of them any express,
implied or apparent authority to incur any obligation or liability on behalf
of the others.
Section 7.08. Other Activities of Trust Administrator and the Depositor.
Nothing herein shall prevent the Trust Administrator, the Depositor or their
respective Affiliates from engaging in other businesses or, in its sole
discretion, from acting in a similar capacity as an Trust Administrator for
any other person or entity even though such person or entity may engage in
business activities similar to those of the Issuer or the Owner Trustee.
Section 7.09. Resignation and Removal of Trust Administrator.
(a) Subject to Section 7.09(d) hereof, the Trust Administrator may
resign its duties hereunder by providing the Issuer with at least [60] days'
prior written notice.
(b) Subject to Section 7.09(d) hereof, the Issuer may remove the Trust
Administrator without cause by providing the Trust Administrator with at least
[60] days' prior written notice.
(c) Subject to Section 7.09(d) hereof, the Issuer may remove the Trust
Administrator immediately upon written notice of termination from the Issuer
to the Trust Administrator if any of the following events shall occur;
provided that in the event of a breach related to the obligations set forth in
Section 7.09(d) (with respect to notice to the Depositor) or Article XI, the
Trust Administrator may only be terminated at the direction of the Depositor:
(i) the Trust Administrator shall default in the performance of
any of its duties under this Agreement ((except with respect to a
failure related to a Limited Exchange Act Reporting Obligation) and,
after notice of such default, shall not cure such default within [ten]
days (or, if such default cannot be cured in such time, shall not give
within [ten] days such assurance of cure as shall be reasonably
satisfactory to the Issuer provided that the [ten-day] cure period shall
not apply to the failure to comply with the requirements set forth in
Section 7.09(d) (with respect to notice to the Depositor) or Article XI,
for which the grace period shall not exceed the lesser of 10 calendar
days or
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such period in which the applicable Exchange Act Report can be filed
timely (without taking into account any extensions)); or
(ii) a court having jurisdiction in the premises shall (x) enter a
decree or order for relief, which decree or order shall not have been
vacated within [60] days, in respect of the Trust Administrator in any
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or (y) appoint a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official for the Trust Administrator or any substantial part of its
property, or (z) order the winding-up or liquidation of the Trust
Administrator's affairs; or
(iii) the Trust Administrator shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief
in an involuntary case under any such law, or shall consent to the
appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or similar official for the Trust Administrator or any
substantial part of its property, shall consent to the taking of
possession by any such official of any substantial part of its property,
shall make any general assignment for the benefit of creditors or shall
fail generally to pay its debts as they become due.
The Trust Administrator agrees that if any of the events specified in
clauses (ii) or (iii) of this Section 7.09(c) shall occur, it shall give
written notice thereof to the Issuer and the Indenture Trustee within [seven]
days after the occurrence of such event.
The Depositor shall not be entitled to terminate the rights and
obligations of the Trust Administrator pursuant to subparagraph (c)(i) if a
failure of the Trust Administrator to identify a Subcontractor "participating
in the servicing function" within the meaning of Item 1122 of Regulation AB
was attributable solely to the role or functions of such Subcontractor with
respect to mortgage loans other than the Mortgage Loans.
(d) No resignation or removal of the Trust Administrator pursuant to
this Section shall be effective until (i) a successor Trust Administrator
shall have been appointed by the Issuer in accordance with the Trust
Agreement, (ii) such successor Trust Administrator shall have agreed in
writing to be bound by the terms of this Agreement in the same manner as the
Trust Administrator is bound hereunder and (iii) the Depositor shall have
received the information described in the following sentence. As a condition
to the effectiveness of any such resignation, at least 15 calendar days prior
to the effective date of such resignation, the Trust Administrator shall
provide (x) written notice to the Depositor of any successor pursuant to this
Section and (y) in writing and in form and substance reasonably satisfactory
to the Depositor, all information reasonably requested by the Depositor in
order to comply with its reporting obligation under Item 6.02 of Form 8-K with
respect to a successor trust administrator. If a successor Trust Administrator
does not take office within [60] days after the retiring Trust Administrator
resigns or is removed, the resigning or removed Trust Administrator or the
Issuer may petition any court of competent jurisdiction for the appointment of
a successor Trust Administrator.
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(e) The appointment of any successor Trust Administrator shall be
effective only after receipt of a letter from each Rating Agency to the effect
that such proposed appointment will not cause a reduction or withdrawal of the
then current ratings of the Notes.
(f) Subject to Sections 7.09(d) and 7.09(e) above, the Trust
Administrator acknowledges that upon the appointment of a successor Master
Servicer pursuant to Section 8.01, the Trust Administrator shall immediately
resign and such successor Master Servicer shall automatically become the Trust
Administrator under this Agreement. Any such successor Master Servicer shall
be required to agree to assume the duties of the Trust Administrator under the
terms and conditions of this Agreement and the other Operative Agreements in
its acceptance of appointment as successor Master Servicer.
Section 7.10. Action upon Termination, Resignation or Removal of the
Trust Administrator. Promptly upon the effective date of termination of this
Agreement or the resignation or removal of the Trust Administrator pursuant to
Section 7.09 hereof, the Trust Administrator shall be entitled to be paid all
reimbursable expenses, including any reasonable out-of-pocket attorneys' fees,
accruing to it to the date of such termination, resignation or removal. The
Trust Administrator shall forthwith upon such termination pursuant to Section
7.09 deliver to the successor Trust Administrator all property and documents
of or relating to the Collateral then in the custody of the Trust
Administrator, or if this Agreement has been terminated, to the Depositor. In
the event of the resignation or removal of the Trust Administrator pursuant to
Section 7.09, the Trust Administrator shall cooperate with the Issuer and take
all reasonable steps requested to assist the Issuer in making an orderly
transfer of the duties of the Trust Administrator.
ARTICLE VIII
MASTER SERVICER EVENTS OF DEFAULT
Section 8.01. Master Servicer Events of Default; Indenture Trustee To
Act; Appointment of Successor.
(a) The occurrence of any one or more of the following events shall
constitute a "Master Servicer Event of Default":
(i) Any failure by the Master Servicer to furnish to the Trust
Administrator the Mortgage Loan data sufficient to prepare the reports
described in Section 5.09(a) which continues unremedied for a period of
[one] Business Day after the date upon which written notice of such
failure shall have been given to such Master Servicer by the Indenture
Trustee or the Trust Administrator or to such Master Servicer and the
Indenture Trustee by the Holders of not less than [25]% of the Class
Principal Amount of each Class of Notes affected thereby; or
(ii) Any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants or
agreements on the part of the Master Servicer (except with respect to a
failure related to a Limited Exchange Act Reporting Obligation)
contained in this Agreement which continues unremedied for a period of
[30]
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days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Master Servicer by
the Indenture Trustee or the Trust Administrator or to the Master
Servicer and the Indenture Trustee by the Majority Noteholders; or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, shall have been entered
against the Master Servicer, and such decree or order shall have
remained in force undischarged or unstayed for a period of [60] days or
any Rating Agency reduces or withdraws or threatens to reduce or
withdraw the rating of the Notes because of the financial condition or
loan servicing capability of such Master Servicer; or
(iv) The Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, voluntary liquidation or
similar proceedings of or relating to the Master Servicer or of or
relating to all or substantially all of its property; or
(v) The Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(vi) The Master Servicer shall be dissolved, or shall dispose of
all or substantially all of its assets, or consolidate with or merge
into another entity or shall permit another entity to consolidate or
merge into it, such that the resulting entity does not meet the criteria
for a successor servicer as specified in Section 5.26 hereof; or
(vii) If a representation or warranty set forth in Section 5.01
hereof shall prove to be incorrect as of the time made in any respect
that materially and adversely affects the interests of the Noteholders,
and the circumstance or condition in respect of which such
representation or warranty was incorrect shall not have been eliminated
or cured within [30] days after the date on which written notice of such
incorrect representation or warranty shall have been given to the Master
Servicer by the Indenture Trustee or the Trust Administrator, or to the
Master Servicer and the Indenture Trustee by the Majority Noteholders;
or
(viii) A sale or pledge of any of the rights of the Master
Servicer hereunder or an assignment of this Agreement by the Master
Servicer or a delegation of the rights or duties of the Master Servicer
hereunder shall have occurred in any manner not otherwise permitted
hereunder and without the prior written consent of the Indenture Trustee
and the Majority Noteholders; or
(ix) The Master Servicer has notice or actual knowledge that the
Servicer at any time is not either an FHA Approved Mortgagee, and the
Master Servicer has not terminated the rights and obligations of such
Servicer under this Agreement and replaced
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the Servicer with an FHA Approved Mortgagee within [60] days of the date
the Master Servicer receives such notice or acquires such actual
knowledge; or
(x) Any failure of the Master Servicer to remit to the Trust
Administrator any Advance required to be made to the Trust Administrator
for the benefit of Noteholders under the terms of this Agreement, which
failure continues unremedied as of the close of business on the Business
Day prior to a Payment Date.
If a Master Servicer Event of Default described in clauses (i) through
(ix) of this Section 8.01 shall occur, then, in each and every case, subject
to applicable law, so long as any such Master Servicer Event of Default shall
not have been remedied within any period of time prescribed by this Section
8.01, the Indenture Trustee, upon obtaining actual knowledge thereof, by
notice in writing to the Master Servicer may, and shall, if so directed by the
Majority Noteholders, terminate all of the rights and obligations of the
Master Servicer hereunder and in and to the Mortgage Loans and the proceeds
thereof; provided that in the event of a Master Servicer Event of Default
related to the obligations set forth in Section 5.24(a), Section 4.08(a) (with
respect to notice to the Depositor) or Article XI, the Master Servicer may
only be terminated at the direction of the Depositor. If a Master Servicer
Event of Default described in clause (x) of this Section 8.01 shall occur,
then, in each and every case, subject to applicable law, so long as such
Master Servicer Event of Default shall not have been remedied within the time
period prescribed by clause (x) of this Section 8.01, the Indenture Trustee,
by notice in writing to the Master Servicer, shall promptly terminate all of
the rights and obligations of the Master Servicer hereunder and in and to the
Mortgage Loans and the proceeds thereof. On or after the receipt by the Master
Servicer of such written notice, all authority and power of the Master
Servicer, and only in its capacity as Master Servicer under this Agreement,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Indenture Trustee pursuant to and under the terms of this
Agreement; and the Indenture Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the defaulting 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 defaulting Master Servicer agrees to cooperate
with the Indenture Trustee in effecting the termination of the defaulting
Master Servicer's responsibilities and rights hereunder as Master Servicer
including, without limitation, notifying the Servicer of the assignment of the
master servicing function and providing the Indenture Trustee or its designee
all documents and records in electronic or other form reasonably requested by
it to enable the Indenture Trustee or its designee to assume the defaulting
Master Servicer's functions hereunder and the transfer to the Indenture
Trustee for administration by it of all amounts which shall at the time be or
should have been deposited by the defaulting Master Servicer in the Collection
Account maintained by such defaulting Master Servicer and any other account or
fund maintained with respect to the Notes or thereafter received with respect
to the Mortgage Loans. The Master Servicer being terminated shall bear all
reasonable out-of-pocket costs of a master servicing transfer, including but
not limited to those of the Indenture Trustee, legal fees and expenses,
accounting and financial consulting fees and expenses, and costs of amending
the Agreement, if necessary. In addition, if during the period that the
Depositor is required to file Exchange Act Reports with respect to the Trust
Fund, the Master Servicer shall fail to observe or perform any of the
obligations that constitute a Limited Exchange Act Reporting Obligation or
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the obligations set forth in Section 5.24(a), Section 4.08(a) or Section
11.01(a)(1) and (2), and such failure continues for the lesser of [10]
calendar days or such period in which the applicable Exchange Act Report can
be filed timely (without taking into account any extensions), so long as such
failure shall not have been remedied, the Trust Administrator shall, but only
at the direction of the Depositor, terminate all of the rights and obligations
of the Master Servicer under this Agreement and in and to the Mortgage Loans
and the proceeds thereof, other than its rights as a Noteholder hereunder. The
Depositor shall not be entitled to termintate the rights and obligations of
the Master Servicer if a failure of the Master Servicer to identify a
Subcontractor "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB was the attributable solely to the role or
functions of such Subcontractor with respect to mortgage loans other than the
Mortgage Loans.
The Indenture Trustee shall be entitled to be reimbursed from the Master
Servicer (or by the Trust Estate, if the Master Servicer is unable to fulfill
its obligations hereunder) for all costs associated with the transfer of
servicing from the predecessor Master Servicer, including, without limitation,
any costs or expenses associated with the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the Indenture Trustee to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Indenture
Trustee to master service the Mortgage Loans properly and effectively. If the
terminated Master Servicer does not pay such reimbursement within [thirty]
days of its receipt of an invoice therefor, such reimbursement shall be an
expense of the Trust Estate and the Indenture Trustee shall be entitled to
withdraw such reimbursement from amounts on deposit in the Collection Account
pursuant to Section 5.08(ix); provided that the terminated Master Servicer
shall reimburse the Trust Estate for any such expense incurred by the Trust
Estate; and provided, further, that the Indenture Trustee shall take such
action, if any, as provided in the Indenture and as directed by the
Noteholders pursuant thereto with respect to pursuing any remedy against any
party obligated to make such reimbursement.
Notwithstanding the termination of its activities as Master Servicer,
each terminated Master Servicer shall continue to be entitled to reimbursement
to the extent provided in Section 5.08 to the extent such reimbursement
relates to the period prior to such Master Servicer's termination.
If any Master Servicer Event of Default shall occur, of which a
Responsible Officer of the Indenture Trustee has actual knowledge, the
Indenture Trustee shall promptly notify each Rating Agency and the Depositor
of the nature and extent of such Master Servicer Event of Default. The Trust
Administrator or the Master Servicer shall immediately give written notice to
the Indenture Trustee upon the Master Servicer's failure to remit Advances on
the date specified herein.
In the event that the Indenture Trustee assumes the duties of the Master
Servicer as set forth herein, the Indenture Trustee shall provide the
Depositor in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a successor master servicer.
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(b) On and after the time the Master Servicer receives a notice of
termination from the Indenture Trustee pursuant to Section 8.01(a) or the
Indenture Trustee receives the resignation of the Master Servicer evidenced by
an Opinion of Counsel pursuant to Section 5.27, the Indenture Trustee, unless
another master servicer shall have been appointed, shall be the successor in
all respects to the Master Servicer in its capacity as such under this
Agreement and the transactions set forth or provided for herein and shall have
all the rights and powers and be subject to all the responsibilities, duties
and liabilities relating thereto and arising thereafter placed on the Master
Servicer hereunder, including the obligation to make Advances; provided,
however, that any failure to perform such duties or responsibilities caused by
the Master Servicer's failure to provide information required by this
Agreement shall not be considered a default by the Indenture Trustee
hereunder. In addition, the Indenture Trustee shall have no responsibility for
any act or omission of the Master Servicer prior to the issuance of any notice
of termination and shall have no liability relating to the representations and
warranties of the Master Servicer set forth in Section 5.01. In the Indenture
Trustee's capacity as such successor, the Indenture Trustee shall have the
same limitations on liability herein granted to the Master Servicer. As
compensation therefor, the Indenture Trustee shall be entitled to receive all
compensation payable to the Master Servicer under this Agreement.
(c) Notwithstanding the above, the Indenture Trustee may, if it shall be
unwilling to continue to so act, or shall, if it is unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
housing and home finance institution servicer, master servicer, servicing or
mortgage servicing institution having a net worth of not less than
$[15,000,000] and meeting such other standards for a successor master servicer
as are set forth in this Agreement, as the successor to such Master Servicer
in the assumption of all of the responsibilities, duties or liabilities of a
master servicer, like the Master Servicer. Such successor Master Servicer may
be an Affiliate of the Indenture Trustee; provided, however, that, unless such
Affiliate meets the net worth requirements and other standards set forth
herein for a successor master servicer, the Indenture Trustee, in its
individual capacity shall agree, at the time of such designation, to be and
remain liable to the Issuer and the Indenture Trustee for such Affiliate's
actions and omissions in performing its duties hereunder. In connection with
such appointment and assumption, the Indenture Trustee may make such
arrangements for the compensation of such successor out of payments on the
Mortgage Loans as it and such successor shall agree; provided, however, that
no such compensation shall be in excess of that permitted to the Master
Servicer hereunder. The Indenture Trustee and such successor shall take such
actions, consistent with this Agreement, as shall be necessary to effectuate
any such succession and may make other arrangements with respect to the
servicing to be conducted hereunder which are not inconsistent herewith. The
Master Servicer shall cooperate with the Indenture Trustee and any successor
master servicer in effecting the termination of the Master Servicer's
responsibilities and rights hereunder including, without limitation, notifying
the Servicer of the assignment of the master servicing functions and providing
the Indenture Trustee and successor master servicer, as applicable, all
documents and records in electronic or other form reasonably requested by it
to enable it to assume the Master Servicer's functions hereunder and the
transfer to the Indenture Trustee or such successor master servicer, as
applicable, all amounts or investment property which shall at the time be or
should have been deposited by the Master Servicer in the Collection Account
and any other account or fund maintained with respect to the Notes or
thereafter be received with respect to the Mortgage Loans. Neither the
Indenture Trustee nor any other successor master servicer shall be deemed to
be in default hereunder by
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reason of any failure to make, or any delay in making, any payment hereunder
or any portion thereof caused by (i) the failure of the Master Servicer to
deliver, or any delay in delivering, cash, documents or records to it, (ii)
the failure of the Master Servicer to cooperate as required by this Agreement,
(iii) the failure of the Master Servicer to deliver the Mortgage Loan data to
the Indenture Trustee as required by this Agreement or (iv) restrictions
imposed by any regulatory authority having jurisdiction over the Master
Servicer.
As a condition to any such succession, such successor master servicer
shall provide to the Depositor in writing and in form and substance reasonably
satisfactory to the Depositor, all information reasonably requested by the
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to a successor master servicer.
Section 8.02. Additional Remedies of Indenture Trustee Upon Master
Servicer Event of Default. During the continuance of any Master Servicer Event
of Default, so long as such Master Servicer Event of Default shall not have
been remedied, the Indenture Trustee, in addition to the rights specified in
Section 8.01, shall have the right, in its own name and as trustee of an
express trust, to take all actions now or hereafter existing at law, in equity
or by statute to enforce its rights and remedies and to protect the interests,
and enforce the rights and remedies, of the Noteholders (including the
institution and prosecution of all judicial, administrative and other
proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no
remedy provided for by this Agreement shall be exclusive of any other remedy,
and each and every remedy shall be cumulative and in addition to any other
remedy, and no delay or omission to exercise any right or remedy shall impair
any such right or remedy or shall be deemed to be a waiver of any Master
Servicer Event of Default.
Section 8.03. Waiver of Defaults. The Majority Noteholders may, on
behalf of all Noteholders, waive any default or Master Servicer Event of
Default by the Master Servicer in the performance of its obligations
hereunder, except that a default in the making of any required deposit to the
Collection Account that would result in a failure of the Trust Administrator
or the Paying Agent to make any required payment of principal of or interest
on the Notes may only be waived with the consent of [100]% of the affected
Noteholders. Notwithstanding the foregoing, in the event of a Master Servicer
Event of Default related to the obligations set forth in Section 5.24, Section
4.08(a) (with respect to notice to the Depositor) and Article XI, only the
Depositor may waive such Master Servicer Event of Default. Upon any waiver of
a past default, such default shall cease to exist, and any Master Servicer
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 8.04. Notification to Holders. Upon termination of the Master
Servicer or appointment of a successor to the Master Servicer, in each case as
provided herein, the Indenture Trustee shall promptly mail notice thereof by
first class mail to the Noteholders at their respective addresses appearing on
the applicable Register. The Indenture Trustee shall also, within [45] days
after the occurrence of any Master Servicer Event of Default known to the
Indenture Trustee, give written notice thereof to Noteholders, unless such
Master Servicer Event
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of Default shall have been cured or waived prior to the issuance of such
notice and within such [45] day period.
Section 8.05. Directions by Noteholders and Duties of Indenture Trustee
During Master Servicer Event of Default. During the continuance of any Master
Servicer Event of Default, the Majority Noteholders may direct the time,
method and place of conducting any proceeding for any remedy available to the
Indenture Trustee, or exercising any trust or power conferred upon the
Indenture Trustee, under this Agreement; provided, however, that the Indenture
Trustee shall be under no obligation to pursue any such remedy, or to exercise
any of the trusts or powers vested in it by this Agreement (including, without
limitation, (i) the conducting or defending of any administrative action or
litigation hereunder or in relation hereto and (ii) the terminating of the
Master Servicer or any successor master servicer from its rights and duties as
master servicer hereunder) at the request, order or direction of any of the
Noteholders, unless such Noteholders shall have offered to the Indenture
Trustee security or indemnity reasonably satisfactory to it against the cost,
expenses and liabilities which may be incurred therein or thereby; and,
provided further, that, the Indenture Trustee shall have the right to decline
to follow any such direction if the Indenture Trustee, in accordance with an
Opinion of Counsel, determines that the action or proceeding so directed may
not lawfully be taken or if the Indenture Trustee in good faith determines
that the action or proceeding so directed would involve it in personal
liability for which it is not indemnified to its satisfaction or be unjustly
prejudicial to the non assenting Noteholders.
Section 8.06. Action Upon Certain Failures of the Master Servicer and
Upon Master Servicer Event of Default. In the event that a Responsible Officer
of the Indenture Trustee or the Trust Administrator shall have actual
knowledge of any action or inaction of the Master Servicer that would become a
Master Servicer Event of Default upon the Master Servicer's failure to remedy
the same after notice, the Indenture Trustee or Trust Administrator, as
applicable, shall give notice thereof to the Master Servicer.
ARTICLE IX
TERMINATION
Section 9.01. Termination. The respective obligations and
responsibilities of the Master Servicer, the Trust Administrator, the
Depositor, the Issuer, the Servicer and the Indenture Trustee created hereby
(other than obligations expressly stated to survive the termination of the
Trust) shall terminate on the day after the day on which the Notes are paid in
full (including payment pursuant to Section 9.02 below) (the "Termination
Date").
Section 9.02. Termination Prior to Maturity Date; Optional Redemption.
(a) On the Payment Date following the Determination Date on which the
Aggregate Collateral Balance is less than [20]% of the Aggregate Collateral
Balance as of the Cut-off Date, _____________________________ acting directly
or through one or more Affiliates, shall have the option to purchase the
Mortgage Loans, any REO Property and any other property remaining in the Trust
for a price equal to the Termination Price. The Master Servicer and the
Servicer will be reimbursed from the Termination Price for any outstanding
Advances, Servicing Advances
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and unpaid Servicing Fees, Master Servicing Fees and other amounts not
previously reimbursed pursuant to the provisions of this Agreement, as
applicable, and the Trust Administrator, the Owner Trustee and the Indenture
Trustee (including in its capacity as Custodian, if applicable) shall be
reimbursed for any previously unreimbursed amounts for which they are entitled
to be reimbursed pursuant to this Agreement, the Indenture, the Custodial
Agreement (to the extent not paid by the Seller pursuant to the Custodial
Agreement) or the Trust Agreement, as applicable. If such option is exercised,
the Trust will be terminated resulting in a mandatory redemption of the Notes.
_____________________ shall deliver written notice of its intention to
exercise such option to the Issuer, the Trust Administrator, the Indenture
Trustee and the Master Servicer not less than [15] days prior to the
applicable Payment Date. If _____________________ fails to exercise such
option prior to the Stepup Date, the Note Interest Rate for each class of
Notes will be increased as set forth herein beginning on the Stepup Date and
for each Payment Date thereafter. _____________________ shall deliver written
notice of its intention to exercise such option to the Issuer, the Indenture
Trustee and the Master Servicer not less than [ten] days prior to the
applicable Payment Date.
In connection with such purchase, _____________________ shall direct the
Servicer to remit to the Trust Administrator all amounts then on deposit in
the Custodial Account (other than amounts permitted to be withdrawn by it
pursuant to Section 4.02(e)) for deposit to the Collection Account.
(b) In addition, if ______________________ does not exercise its
purchase option pursuant to subsection (a) of this Section 9.02, then, on the
Payment Date following the Determination Date on which the Aggregate
Collateral Balance is less than [10]% of the Aggregate Collateral Balance as
of the Cut-off Date, the Servicer acting directly or through one or more
Affiliates, shall have the option to purchase the Mortgage Loans, any REO
Property and any other property remaining in the Trust for a price equal to
the Termination Price. All conditions applying to _____________________'s
right to purchase the Mortgage Loans pursuant to paragraph (a) above shall
also apply to the Servicer's right.
(c) Promptly following any such purchase pursuant to paragraph (a) or
(b) of this Section and receipt of an Officer's Certificate of
_____________________ or of the Servicer, as applicable, that the purchase
price has been deposited in the Collection Account, the Indenture Trustee or
the applicable Custodian shall release the Mortgage Files to the purchaser of
such Mortgage Loans pursuant to this Section 9.02, or otherwise upon its
order.
Section 9.03. Certain Notices upon Final Payment. The Master Servicer or
the Trust Administrator, as applicable, shall give the Issuer, the Indenture
Trustee, the Owner Trustee, each Rating Agency, each Noteholder and the
Depositor at least [30] days' prior written notice of the date on which the
Trust is expected to terminate in accordance with Section 9.01, or the date on
which the Notes will be redeemed in accordance with Section 9.02. Not later
than the [fifth] Business Day in the Collection Period in which the final
payment in respect to the Notes is payable to the Noteholders, the Indenture
Trustee shall mail to the Noteholders a notice specifying the procedures with
respect to such final payment. The Trust Administrator on behalf of the
Indenture Trustee shall give a copy of such notice to each Rating Agency at
the time such notice is given to Noteholders. Following the final payment
thereon, such Notes shall become
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void, no longer outstanding and no longer evidence any right or interest in
the Mortgage Loans, the Mortgage Files or any proceeds of the foregoing.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Binding Nature of Agreement; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 10.02. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof.
Section 10.03. Amendment.
(a) This Agreement may be amended from time to time by the parties
hereto, without notice to or the consent of any of the Holders of the Notes,
(i) to cure any ambiguity, (ii) to conform the provisions of this Agreement to
the information contained in the Prospectus or to correct or supplement any
provision herein, (iii) to make any other provision with respect to matters or
questions arising under this Agreement or (iv) to add, delete, or amend any
provision in order to comply with any requirements imposed by the Code, ERISA
and their related regulations. No such amendment effected pursuant to the
preceding sentence shall, as evidenced by an Opinion of Counsel (which shall
be an expense of the party requesting such amendment and shall not be an
expense of the Trust or the Indenture Trustee), (1) affect the status of the
Notes as debt for federal income tax purposes or (2) only in the case of an
amendment effected pursuant to clause (iii) of such sentence, adversely affect
in any material respect the interests of any Holder. Prior to entering into
any amendment without the consent of Holders pursuant to this paragraph, the
Indenture Trustee may require an Opinion of Counsel (at the expense of the
party requesting such amendment) to the effect that such amendment is
permitted under this paragraph. Any such amendment shall be deemed not to
adversely affect in any material respect any Holder, if the Indenture Trustee
receives written confirmation from each Rating Agency that such amendment will
not cause such Rating Agency to reduce the then current ratings assigned to
the Notes.
(b) This Agreement may also be amended from time to time by the parties
hereto with the consent of (i) the Holders of each Class of Notes affected
thereby evidencing Voting Interests aggregating not less than [66-2/3]% of
each such Class and (ii) the Holder of the Ownership Certificate, for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or modifying in any manner the rights
of Noteholders; provided, however, that no such amendment may (i) reduce in
any manner the amount of, or delay the timing of, payments that are required
to be made in respect of any Notes without the consent of the Holder of each
such Note affected thereby or (ii) reduce the
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percentage of Notes the Holders of which are required to consent to any such
amendment without the consent of the Holders of [100]% of the Class Principal
Amount of the Notes. For purposes of this paragraph, references to "Holder" or
"Holders" shall be deemed to include, in the case of Book-Entry Notes, the
related Note Owners.
(c) Promptly after the execution of any such amendment, the Indenture
Trustee shall furnish written notification of the substance of such amendment
to each Holder, the Depositor and to each Rating Agency.
(d) It shall not be necessary for the consent of Holders under this
Section 10.03 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be subject to such reasonable regulations
as the Indenture Trustee may prescribe.
Section 10.04. Acts of Noteholders. Except as otherwise specifically
provided herein, whenever Noteholder action, consent or approval is required
under this Agreement, such action, consent or approval shall be deemed to have
been taken or given on behalf of, and shall be binding upon, all Noteholders
if the Majority Noteholders agree to take such action or give such consent or
approval.
Section 10.05. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement, or a memorandum thereof if permitted under
applicable law, is subject to recordation in all appropriate public offices
for real property records in all of the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages
are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Depositor on direction and
at the expense of Holders of not less than [66-2/3]% of the Note Principal
Amount of the Notes and of the Holder of the Ownership Certificate requesting
such recordation, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Noteholders, or is necessary for the administration or servicing of the
Mortgage Loans.
Section 10.06. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.07. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed by overnight courier, addressed as follows or delivered by facsimile
(or such other address as may hereafter be furnished to the other party by
like notice):
(i) if to the Seller:
____________________________
___________________________
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________________________
Attention: _____________________________
Telephone: ____________
Facsimile: ____________
with a copy to:
___________________
(ii) if to the Servicer:
_________________________
_______________________
_______________________
Attention: ______________________________
Telephone: _____________
Facsimile: ____________
with a copy to:
____________________
(iii) if to the Master Servicer:
____________________
_______________
________________
Attention: _______________________________
__________________________
_________________________
Telephone: ______________
Facsimile: _____________
(iv) if to the Trust Administrator:
____________________
______________
_________________
Attention: ___________________________
______________________________
________________________
Telephone: ____________
Facsimile: _____________
(v) if to the Indenture Trustee:
____________________________________
__________________________
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_______________________
Attention: ______________________
Telephone: _____________
Facsimile: ____________
(vi) if to the Depositor:
CWHEQ, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: _______ 200_-__
(vii) if to the Issuer:
c/o ___________________
________________
_____________________
_______________________
Attention: ______________________
All demands, notices and communications to a party hereunder shall be in
writing and shall be deemed to have been duly given when delivered to such
party at the relevant address, facsimile number or electronic mail address set
forth above or at such other address, facsimile number or electronic mail
address as such party may designate from time to time by written notice in
accordance with this Section 10.07.
Section 10.08. 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 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 Notes or
the rights of the Holders thereof.
Section 10.09. Indulgences; No Waivers. Neither the failure nor any
delay on the part of a party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right, remedy,
power or privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have
granted such waiver.
Section 10.10. Headings Not To Affect Interpretation. The headings
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 10.11. Benefits of Agreement. Nothing in this Agreement or in
the Notes, express or implied, shall give to any Person, other than the
parties to this Agreement and their
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successors hereunder and the Holders of the Notes, any benefit or any legal or
equitable right, power, remedy or claim under this Agreement. Notwithstanding
the foregoing, (i) the Owner Trustee shall be an express third-party
beneficiary of this Agreement and (ii) _____________________ shall be an
express third-party beneficiary with respect to Section 9.02.
Section 10.12. Special Notices to the Rating Agencies.
(a) The Servicer shall give prompt notice to each Rating Agency of the
occurrence of any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 10.03; and
(ii) the making of a final payment hereunder.
(b) All notices to the Rating Agencies provided for by this Section
shall be in writing and sent by first class mail, telecopy or overnight
courier, as follows:
if to [Moody's]:
[▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax no.: (▇▇▇) ▇▇▇-▇▇▇▇]
if to [S&P]:
[Standard & Poor's Ratings Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax no.: (▇▇▇) ▇▇▇-▇▇▇▇]
(c) The Trust Administrator shall make available to the Rating Agencies
each report prepared pursuant to Section 5.09.
Section 10.13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
Section 10.14. Execution by the Issuer. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by __________________, not individually or personally but solely as Owner
Trustee of the Issuer, in the exercise of the powers and authority conferred
and vested in it as trustee, (b) each of the representations, undertakings and
agreements herein made on the part of the Issuer is made and intended not as
personal representations, undertakings and agreements by _____________________
but is made and intended for the purpose of binding only the Issuer, (c)
nothing herein contained shall be construed as creating any liability on
______________________, individually or personally, to
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perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
person claiming by, through or under the parties hereto and (d) under no
circumstances shall ______________________ be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Issuer under this Agreement or any other document.
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ARTICLE XI
EXCHANGE ACT REPORTING
Section 11.01. Filing Obligations.
The Master Servicer, the Servicer, the Trust Administrator, the
[Indenture Trustee], the Custodian, the Owner Trustee and the Seller shall
reasonably cooperate with the Depositor in connection with the satisfaction of
the Depositor's reporting requirements under the Exchange Act with respect to
the Trust Fund. In addition to the information specified below, if so
requested by the Depositor for the purpose of satisfying its reporting
obligation under the Exchange Act, the Master Servicer, the Servicer, the
Trust Administrator, the [Indenture Trustee], the Custodian, the Owner Trustee
and the Seller shall (and the Servicer and the Master Servicer shall cause
each related Subservicer to) provide the Depositor with (a) such information
which is available to such Person without unreasonable effort or expense and
within such timeframe as may be reasonably requested by the Depositor to
comply with the Depositor's reporting obligations under the Exchange Act and
(b) to the extent such Person is a party (and the Depositor is not a party) to
any agreement or amendment required to be filed, copies of such agreement or
amendment in ▇▇▇▇▇-compatible form.
Section 11.02. Form 10-D Filings.
(a) In accordance with the Exchange Act, the Trust Administrator shall
prepare for filing and file within 15 days after each Payment Date (subject to
permitted extensions under the Exchange Act) with the Commission with respect
to the Trust Fund, a Form 10-D with copies of the Monthly Report and, to the
extent delivered to the Trust Administrator, no later than 10 days following
the Payment Date, such other information identified by the Depositor or the
Master Servicer, in writing, to be filed with the Commission (such other
information, the "Additional Designated Information"). If the Depositor or
Master Servicer directs that any Additional Designated Information is to be
filed with any Form 10-D, the Depositor or Master Servicer, as the case may
be, shall specify the Item on Form 10-D to which such information is
responsive and, with respect to any Exhibit to be filed on Form 10-D, the
Exhibit number. Any information to be filed on Form 10-D shall be delivered to
the Trust Administrator in ▇▇▇▇▇-compatible form or as otherwise agreed upon
by the Trust Administrator and the Depositor or the Master Servicer, as the
case may be, at the [Servicer's] expense, and any necessary conversion to
▇▇▇▇▇-compatible format will be at the Depositor's expense. At the reasonable
request of, and in accordance with the reasonable directions of, the Depositor
or the Master Servicer, subject to the two preceding sentences, the Trust
Administrator shall prepare for filing and file an amendment to any Form 10-D
previously filed with the Commission with respect to the Trust Fund. The
[Master Servicer] shall sign the Form 10-D filed on behalf of the Trust Fund.
(b) No later than each Payment Date, each of the Master Servicer, the
Servicer, the Trust Administrator, the Owner Trustee and the [Indenture
Trustee] shall notify (and the Servicer and the Master Servicer shall cause
any related Subservicer to notify) the Depositor and the Master Servicer of
any Form 10-D Disclosure Item, together with a description of any such Form
10-D Disclosure Item in form and substance reasonably acceptable to the
Depositor. In addition to such information as the Master Servicer, the
Servicer, the Trust Administrator and the [Indenture Trustee] are obligated to
provide pursuant to other provisions of this Agreement, if so
159
requested by the Depositor, each of the Master Servicer, the Servicer, the
Trust Administrator and the [Indenture Trustee] shall provide such information
which is available to the Master Servicer, the Servicer, the Trust
Administrator and the [Indenture Trustee], as applicable, without unreasonable
effort or expense regarding the performance or servicing of the Mortgage Loans
(in the case of the Master Servicer, the [Indenture Trustee] and the Trust
Administrator, based on the information provided by the Servicer) as is
reasonably required to facilitate preparation of distribution reports in
accordance with Item 1121 of Regulation AB. Such information shall be provided
concurrently with the remittance reports in the case of the Servicer and the
reports to the noteholders in the case of the Trust Administrator and the
[Indenture Trustee], commencing with the first such report due not less than
five Business Days following such request.
(c) The Trust Administrator shall not have any responsibility to file
any items (other than those generated by it) that have not been received in a
format suitable (or readily convertible into a format suitable) for electronic
filing via the ▇▇▇▇▇ system and shall not have any responsibility to convert
any such items to such format (other than those items generated by it or that
are readily convertible to such format). The Trust Administrator shall have no
liability to the Noteholders, the Trust Fund, the Master Servicer, the
[Indenture Trustee] or the Depositor with respect to any failure to properly
prepare or file any of Form 10-D to the extent that such failure is not the
result of any negligence, bad faith or willful misconduct on its part.
Section 11.03. Form 8-K Filings.
The Master Servicer shall prepare and file on behalf of the Trust
Fund any Form 8-K required by the Exchange Act. [Each Form 8-K must be signed
by the Master Servicer.] Each of the Master Servicer, the Servicer (and the
Servicer and the Master Servicer shall cause any related Subservicer to
promptly notify), the Trust Administrator, the Owner Trustee and the
[Indenture Trustee] shall promptly notify the Depositor and the Master
Servicer (if the notifying party is not the Master Servicer), but in no event
later than one (1) Business Day after its occurrence, of any Reportable Event
of which it has actual knowledge. Each Person shall be deemed to have actual
knowledge of any such event to the extent that it relates to such Person or
any action or failure to act by such Person.
Section 11.04. Form 10-K Filings.
Prior to March 30th of each year, commencing in 20[ ] (or such
earlier date as may be required by the Exchange Act), the Master Servicer
shall prepare and file on behalf of the Trust Fund a Form 10-K, in form and
substance as required by the Exchange Act. A senior officer in charge of the
servicing function of the Master Servicer shall sign each Form 10-K filed on
behalf of the Trust Fund. Such Form 10-K shall include as exhibits each (i)
annual compliance statement described under Section 5.24, (ii) annual report
on assessments of compliance with servicing criteria described under Section
11.07 and (iii) accountant's report described under Section 11.07. Each Form
10-K shall also include any ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification required to be
included therewith, as described in Section 11.05.
If the Item 1119 Parties listed on Exhibit I have changed since
the Closing Date, no later than March 1 of each year, the [Depositor/Master
Servicer] shall provide each of the Master Servicer, the Servicer (and the
Servicer and the Master Servicer shall provide any related
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Subservicer), the Trust Administrator, the Owner Trustee and the [Indenture
Trustee] with an updated Exhibit I setting forth the Item 1119 Parties. No
later than March 15 of each year, commencing in 20[ ], the Master Servicer,
the Servicer, the Trust Administrator, the Owner Trustee and the [Indenture
Trustee] shall notify (and the Servicer and the Master Servicer shall cause
any related Subservicer to notify) the Depositor and the Master Servicer of
any Form 10-K Disclosure Item, together with a description of any such Form
10-K Disclosure Item in form and substance reasonably acceptable to the
Depositor. Additionally, each of the Master Servicer, the Servicer, the Trust
Administrator and the [Indenture Trustee] shall provide, and shall cause each
Reporting Subcontractor retained by the Master Servicer, the Servicer, the
Custodian, the Trust Administrator or the [Indenture Trustee], as applicable,
and in the case of the Servicer and the Master Servicer shall cause each
related Subservicer, to provide, the following information no later than March
15 of each year in which a Form 10-K is required to be filed on behalf of the
Trust Fund: (i) if such Person's report on assessment of compliance with
servicing criteria described under Section 11.07 or related registered public
accounting firm attestation report described under Section 11.07 identifies
any material instance of noncompliance, notification of such instance of
noncompliance and (ii) if any such Person's report on assessment of compliance
with servicing criteria or related registered public accounting firm
attestation report is not provided to be filed as an exhibit to such Form
10-K, information detailing the explanation why such report is not included.
Section 11.05. ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
(a) Each Form 10-K shall include a certification (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification") required by Rules 13a-14(d) and 15d-14(d) under the Exchange
Act (pursuant to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules
and regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff)). No later than March 15 of
each year, beginning in 20[ ], the Depositor, the Master Servicer, the
Servicer, the Trust Administrator, the Custodian and the [Indenture Trustee]
shall (unless such person is the Certifying Person), and the Servicer and the
Master Servicer shall cause each related Subservicer to, provide to the Person
who signs the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the "Certifying Person") a
certification (each, a "Performance Certification"), in the form attached
hereto as Exhibit H-1 (in the case of the Servicer and any Subservicer) and
Exhibit H-2 (in the case of the Trust Administrator, the Custodian and the
[Indenture Trustee]), on which the Certifying Person, the entity for which the
Certifying Person acts as an officer, and such entity's officers, directors
and Affiliates (collectively with the Certifying Person, "Certification
Parties") can reasonably rely. The senior officer in charge of the servicing
function of the Master Servicer shall serve as the Certifying Person on behalf
of the Trust Fund. Neither the Master Servicer nor the Depositor will request
delivery of a certification under this clause unless the Depositor is required
under the Exchange Act to file an annual report on Form 10-K with respect to
the Trust Fund. In the event that prior to the filing date of the Form 10-K in
March of each year, the Servicer, the Trust Administrator, the Custodian, the
[Indenture Trustee] or the Depositor has actual knowledge of information
material to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification, the Trust Administrator, the
Custodian, the Servicer, the [Indenture Trustee] or the Depositor, as the case
may be, shall promptly notify the Master Servicer and the Depositor. The
respective parties hereto agree to cooperate with all reasonable requests made
by any Certifying Person or Certification Party in connection with such
Person's attempt to conduct any due diligence that such Person reasonably
believes to be
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appropriate in order to allow it to deliver any ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification
or portion thereof with respect to the Trust Fund.
Section 11.06. Form 15 Filing.
Prior to January 30 of the first year in which the Depositor is
able to do so under applicable law, the Depositor shall file a Form 15
relating to the automatic suspension of reporting in respect of the Trust Fund
under the Exchange Act.
Section 11.07. Report on Assessment of Compliance and Attestation.
(a) On or before March 15 of each calendar year, commencing in 20[ ]:
(1) Each of the Master Servicer, the Servicer, the Trust
Administrator, the Custodian and the [Indenture Trustee] shall deliver
to the Depositor and the Master Servicer a report (in form and substance
reasonably satisfactory to the Depositor) regarding the Master
Servicer's, the Servicer's, the Trust Administrator's, the Custodian's
or the [Indenture Trustee]'s, as applicable, assessment of compliance
with the Servicing Criteria during the immediately preceding calendar
year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and
Item 1122 of Regulation AB. Such report shall be signed by an authorized
officer of such Person and shall address each of the Servicing Criteria
specified on a certification substantially in the form of Exhibit J
hereto delivered to the Depositor concurrently with the execution of
this Agreement. To the extent any of the Servicing Criteria are not
applicable to such Person, with respect to asset-backed securities
transactions taken as a whole involving such Person and that are backed
by the same asset type backing the Notes, such report shall include such
a statement to that effect. The Depositor and the Master Servicer, and
each of their respective officers and directors shall be entitled to
rely on upon each such servicing criteria assessment.
(2) Each of the Master Servicer, the Servicer, the Trust
Administrator, the Custodian and the [Indenture Trustee] shall deliver
to the Depositor and the Master Servicer a report of a registered public
accounting firm reasonably acceptable to the Depositor that attests to,
and reports on, the assessment of compliance made by Master Servicer,
the Servicer, the Trust Administrator, the Custodian or the [Indenture
Trustee], as applicable, and delivered pursuant to the preceding
paragraphs. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and
the Exchange Act, including, without limitation that in the event that
an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express
such an opinion. Such report must be available for general use and not
contain restricted use language. To the extent any of the Servicing
Criteria are not applicable to such Person, with respect to asset-backed
securities transactions taken as a whole involving such Person and that
are backed by the same asset type backing the Notes, such report shall
include such a statement to that effect.
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(3) Each of the Servicer and the Master Servicer shall cause each
Subservicer and each Reporting Subcontractor to deliver to the Depositor
an assessment of compliance and accountant's attestation as and when
provided in paragraphs (a) and (b) of this Section 11.07.
(4) Each of the Trust Administrator, the Custodian and the
[Indenture Trustee] shall cause each Reporting Subcontractor to deliver
to the Depositor and the Master Servicer an assessment of compliance and
accountant's attestation as and when provided in paragraphs (a) and (b)
of this Section.
(5) The Master Servicer, the Servicer, the Trust Administrator,
the Custodian and the [Indenture Trustee] shall execute (and the
Servicer and the Master Servicer shall cause each related Subservicer to
execute, and the Master Servicer, the Servicer, the Trust Administrator,
the Custodian and the [Indenture Trustee] shall cause each Reporting
Subcontractor to execute) a reliance certificate to enable the
Certification Parties to rely upon each (i) annual compliance statement
provided pursuant to Section 5.24, (ii) annual report on assessments of
compliance with servicing criteria provided pursuant to this Section
11.07 and (iii) accountant's report provided pursuant to this Section
11.07 and shall include a certification that each such annual compliance
statement or report discloses any deficiencies or defaults described to
the registered public accountants of such Person to enable such
accountants to render the Notes provided for in this Section 11.07. In
the event the Master Servicer, the Servicer, any Subservicer, the Trust
Administrator, the Custodian or Reporting Subcontractor is terminated or
resigns during the term of this Agreement, such Person shall provide a
certification to the Certifying Person pursuant to this Section 11.07
with respect to the period of time it was subject to this Agreement or
provided services with respect to the Trust Fund, the Notes or the
Mortgage Loans.
(b) Each assessment of compliance provided by a Subservicer pursuant to
Section 11.07(a)(3) shall address each of the Servicing Criteria specified on
a certification substantially in the form of Exhibit J hereto delivered to the
Depositor concurrently with the execution of this Agreement or, in the case of
a Subservicer subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Subcontractor pursuant
to Section 11.07(a)(3) or (4) need not address any elements of the Servicing
Criteria other than those specified by the Master Servicer, the Servicer, the
Trust Administrator, the Custodian or the [Indenture Trustee], as applicable,
pursuant to Section 11.07(a)(1).
Section 11.08. Use of Subservicers and Subcontractors.
(a) Each of the Master Servicer and the Servicer shall cause any
Subservicer used by the Servicer (or by any Subservicer), respectively, for
the benefit of the Depositor to comply with the provisions of Section 5.24 and
Section 4.04(e), respectively, and this Article XI to the same extent as if
such Subservicer were the Servicer or the Master Servicer, as the case may be
(except with respect to the Master Servicer's duties with respect to preparing
and filing any Exchange Act Reports or as the Certifying Person). Each of the
Master Servicer and the Servicer shall be responsible for obtaining from each
related Subservicer and delivering to the Depositor any servicer compliance
statement required to be delivered by such Subservicer under Section
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5.24 and Section 4.04(e), respectively, any assessment of compliance and
attestation required to be delivered by such Subservicer under Section 11.07
and any certification required to be delivered to the Certifying Person under
Section 11.05 as and when required to be delivered. As a condition to the
succession to any Subservicer as subservicer under this Agreement by any
Person (i) into which such Subservicer may be merged or consolidated, or (ii)
which may be appointed as a successor to any Subservicer, the Servicer shall
provide to the Depositor, at least 15 calendar days prior to the effective
date of such succession or appointment, (x) written notice to the Depositor of
such succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K.
(b) It shall not be necessary for the Master Servicer, the Servicer, any
Subservicer, the Trust Administrator, the Custodian or the [Indenture Trustee]
to seek the consent of the Depositor or any other party hereto to the
utilization of any Subcontractor. The Master Servicer, the Servicer, the Trust
Administrator, the Custodian or the [Indenture Trustee], as applicable, shall
promptly upon request provide to the Depositor (or any designee of the
Depositor, such as the Servicer or administrator) a written description (in
form and substance satisfactory to the Depositor) of the role and function of
each Subcontractor utilized by such Person (or in the case of the Servicer or
the Master Servicer, any Subservicer), specifying (i) the identity of each
such Subcontractor, (ii) which (if any) of such Subcontractors are
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor
identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined
to be a Reporting Subcontractor, the Master Servicer, the Servicer, the Trust
Administrator, the Custodian or the [Indenture Trustee], as applicable, shall
cause any such Subcontractor used by such Person (or in the case of the
Servicer or the Master Servicer, any Subservicer) for the benefit of the
Depositor to comply with the provisions of Sections 11.07 and 11.09 of this
Agreement to the same extent as if such Subcontractor were the Master
Servicer, the Servicer, the Trust Administrator, the Custodian or the
[Indenture Trustee], as applicable (except with respect to the Master
Servicer's duties with respect to preparing and filing any Exchange Act
Reports or as the Certifying Person). The Master Servicer, the Servicer, the
Trust Administrator, the Custodian or the [Indenture Trustee], as applicable,
shall be responsible for obtaining from each Subcontractor and delivering to
the Depositor and the Master Servicer, any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section
11.07, in each case as and when required to be delivered.
Section 11.09. Amendments.
In the event the parties to this Agreement desire to further
clarify or amend any provision of this Article XI, this Agreement shall be
amended to reflect the new agreement between the parties covering matters in
this Article XI pursuant to Section 10.03, which amendment shall not require
any Opinion of Counsel or Rating Agency confirmations or the consent of any
Noteholder.
164
If, during the period that the Depositor is required to file Exchange
Act Reports with respect to the Trust Fund, the Master Servicer is no longer
an Affiliate of the Depositor, the Depositor shall assume the obligations and
responsibilities of the Master Servicer in this Article XI with respect to the
preparation and filing of the Exchange Act Reports and/or acting as the
Certifying Person, if the Depositor has received indemnity from such successor
Master Servicer satisfactory to the Depositor, and such Master Servicer has
agreed to provide a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification to the Depositor
substantially in the form of Exhibit M.
165
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers hereunto duly authorized as of the
day and year first above written.
______ MORTGAGE INVESTMENT TRUST
200_-__,
as Issuer
By: ________________________, not in
its individual capacity but solely
as Owner Trustee
By:_________________________________
Name:
Title:
CWHEQ, INC.,
as Depositor
By:_________________________________
Name:
Title:
____________________________________, not
in its individual capacity but solely as
Indenture Trustee
By:_________________________________
Name:
Title:
____________________,
as Trust Administrator and Master Servicer
By:_________________________________
Name:
Title:
Sale and Servicing Agreement
_________________________,
as Servicer
By:_________________________________
Name:
Title:
____________________________, as Seller
By:_________________________________
Name:
Title:
With Respect to Article XI only
_________________________, as Owner Trustee
By:______________________
Name:
Title:
Sale and Servicing Agreement
STATE OF )
: ss.:
COUNTY OF )
On this ___ day of ___________ 200_, before me, personally
appeared ____________, known to me to be a _______ of ____________________,
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]
Notary page to Sale and Servicing Agreement
STATE OF CALIFORNIA )
: ss.:
COUNTY OF LOS ANGELES )
On the ___ day of ___________ 200_, before me, personally appeared
__________, known to me to be a _________________ of CWHEQ, 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]
Notary page to Sale and Servicing Agreement
STATE OF )
: ss.:
COUNTY OF )
On the ____ of ___________ 200_, before me, a Notary Public in and
for said State, personally appeared ______________ known to me to be a
_____________ of ____________________________________, 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]
Notary page to Sale and Servicing Agreement
STATE OF )
: ss.:
COUNTY OF )
On the ____ of ___________ 200_, before me, a Notary Public in and
for said State, personally appeared ______________ known to me to be a
_____________ of ____________________, a national banking association that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
__________________________________
Notary Public
[NOTARIAL SEAL]
Notary page to Sale and Servicing Agreement
STATE OF )
: ss.:
COUNTY OF )
On the ____ of ___________ 200_, before me, a Notary Public in and
for said State, personally appeared ______________ known to me to be a
_____________ of _________________________, 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]
Notary page to Sale and Servicing Agreement
STATE OF )
: ss.:
COUNTY OF )
On the ____ of ___________ 200_, before me, a Notary Public in and
for said State, personally appeared ______________ known to me to be a
_____________ of ____________________________, 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]
Notary page to Sale and Servicing Agreement
EXHIBIT A-1
-----------
FORM OF INITIAL CERTIFICATION
-----------------------------
_________________
Date
[Indenture [Trust
Trustee]________________________ Administrator]________________________
_______________________ _______________________
_______________________ _______________________
Attention: __________________ Attention: __________________
[CWHEQ, Inc. ____________________________________
4500 Park Granada _______________________
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇] _______________________
Attention: __________________
Re: Sale and Servicing Agreement (the "Sale and Servicing Agreement")
dated as of _______, 200_ by and among [CWHEQ, Inc.], as
Depositor, ____________________________________, as Indenture
Trustee, ____________________, as Trust Administrator and Master
Servicer, ______ Mortgage Investment Trust 200_-__, as Issuer,
_________________________, as Servicer, and
, as Seller
------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the Sale and Servicing Agreement,
subject to review of the contents thereof, the undersigned, as Custodian,
hereby certifies that it has received the documents listed in Section 2.01(b)
of the Sale and Servicing Agreement for each Mortgage File pertaining to each
Mortgage Loan listed on Schedule A to the Sale and Servicing Agreement,
subject to any exceptions noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Sale and
Servicing Agreement. This certificate is subject in all respects to the terms
of Section 2.02 of the Sale and Servicing Agreement and the Sale and Servicing
Agreement sections cross-referenced therein.
[Custodian]
By:_____________________________________
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF INTERIM CERTIFICATION
-----------------------------
_________________
Date
[Indenture [Trust
Trustee]________________________ Administrator]________________________
_______________________ _______________________
_______________________ _______________________
Attention: __________________ Attention: __________________
[CWHEQ, Inc. ____________________________________
4500 Park Granada _______________________
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇] _______________________
Attention: __________________
Re: Sale and Servicing Agreement (the "Sale and Servicing Agreement")
dated as of _______, 200_ by and among [CWHEQ, Inc.], as
Depositor, ____________________________________, as Indenture
Trustee, ____________________, as Trust Administrator and Master
Servicer, ______ Mortgage Investment Trust 200_-__, as Issuer,
_________________________, as Servicer, and
, as Seller
------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Sale and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed on Schedule I hereto) it (or its custodian) has received the
applicable documents listed in Section 2.01(b) of the Sale and Servicing
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the documents identified above and has
determined that each such document appears regular on its face and appears to
relate to the Mortgage Loan identified in such document.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Sale and Servicing Agreement. This
certificate is qualified in all respects by the terms of said Sale and
Servicing Agreement including, but not limited to, Section 2.02(b).
[Custodian]
By:_____________________________________
A-2-1
Name:
Title:
EXHIBIT A-3
-----------
FORM OF FINAL CERTIFICATION
---------------------------
_________________
Date
[Indenture [Trust
Trustee]________________________ Administrator]________________________
_______________________ _______________________
_______________________ _______________________
Attention: __________________ Attention: __________________
[CWHEQ, Inc. ____________________________________
4500 Park Granada _______________________
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇] _______________________
Attention: __________________
Re: Sale and Servicing Agreement (the "Sale and Servicing Agreement")
dated as of _______, 200_ by and among [CWHEQ, Inc.], as
Depositor, ____________________________________, as Indenture
Trustee, ____________________, as Trust Administrator and Master
Servicer, ______ Mortgage Investment Trust 200_-__, as Issuer,
_________________________, as Servicer, and
, as Seller
------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02(d) of the Sale and Servicing Agreement,
the undersigned, as Custodian on behalf of the Indenture Trustee, hereby
certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or listed on Schedule I hereto) it
(or its custodian) has received the applicable documents listed in Section
2.01(b) of the Sale and Servicing Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the documents listed above and has
determined that each such document appears to be complete and, based on an
examination of such documents, the information set forth in the Mortgage Loan
Schedule is correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Sale and Servicing Agreement. This
certificate is qualified in all respects by the terms of said Sale and
Servicing Agreement.
[Custodian]
By:_____________________________________
A-3-1
Name:
Title:
EXHIBIT A-4
-----------
FORM OF ENDORSEMENT
-------------------
Pay to the order of ____________________________________, as indenture
trustee (the "Indenture Trustee") under the Sale and Servicing Agreement dated
as of _______, 200_ by and among [CWHEQ, Inc.], as Depositor, the Indenture
Trustee, ____________________, as Trust Administrator and Master Servicer,
______ Mortgage Investment Trust 200_-__, as Issuer,
_________________________, as Servicer, and ____________________________, as
Seller, relating to ______ Mortgage Investment Trust 200_-__ Asset-Backed
Notes, Series 200_-__, without recourse.
__________________________________
[current signatory on note]
By:_______________________________
Name:
Title:
A-4-1
EXHIBIT B
---------
[Reserved]
B-1
EXHIBIT C
---------
FORM OF LOST NOTE AFFIDAVIT
I, _________________________________________, being duly sworn, do
hereby state under oath that:
1. I am a duly elected ______________________ of
____________________________ (the "Company") and am duly authorized to make
this affidavit.
2. This affidavit is being delivered in connection with the transfer of
the Mortgage Loan described in Paragraph 3 hereof by the Company pursuant to
the Sale and Servicing Agreement, dated as of _______, 200_, among ______
Mortgage Investment Trust 200_-__, as Issuer, [CWHEQ, Inc.], as Depositor,
____________________, as Master Servicer and as Trust Administrator,
_________________________, as Servicer, ____________________________, as
Seller, and ____________________________________, as Indenture Trustee,
relating to the ______ Mortgage Investment Trust 200_-__ Asset-Backed Notes,
Series 200_-__ (the "Agreement").
3. The ______________ is the payee under the following described
Mortgage Note ("Mortgage Note") which evidences the obligation of the
borrower(s) to repay the Mortgage Loan:
Loan Number: __________________________________
Mortgage Note Date:_____________________________
Borrower(s): ___________________________________
Original Payee (if not the Company): ___________
Original Amount:________________________________
Mortgage Rate: _________________________________
Address of Mortgaged Property: _________________
________________________________________________
4. The Company is the lawful owner of the Mortgage Note and has not
cancelled, altered, assigned or hypothecated the Mortgage Note.
5. A thorough and diligent search for the executed original Mortgage
Note was undertaken and was unsuccessful.
6. Attached hereto is a true and correct copy of the Mortgage Note.
7. The Mortgage Note has not been endorsed by the Company in any manner
inconsistent with its transfer of the Mortgage Loan under the Mortgage Loan
Purchase Agreement.
8. Without limiting the generality of the rights and remedies of the
Indenture Trustee contained in the Agreement, the Company hereby confirms and
agrees that in the event the inability to produce the executed original
Mortgage Note results in a breach of the
C-1
representations, warranties and covenants appearing in Section 2 of the
Mortgage Loan Purchase Agreement and Section 3.01 of the Agreement, the
Company shall repurchase the Mortgage Loan at the Purchase Price and otherwise
in accordance with Section 3.03 of the Agreement. In addition, the Company
covenants and agrees to indemnify the Indenture Trustee and the Trust from and
hold them harmless against any and all losses, liabilities, damages, claims or
expenses arising from the Company's failure to have delivered the Mortgage
Note to the Indenture Trustee, including without limitation any such losses,
liabilities, damages, claims or expenses arising from any action to enforce
the indebtedness evidenced by the Mortgage Note or any claim by any third
party who is the holder of such indebtedness by virtue of possession of the
Mortgage Note.
9. In the event that the Company locates the executed original Mortgage
Note, it shall promptly provide the Mortgage Note to the Indenture Trustee.
10. Capitalized terms used but not otherwise defined herein shall have
the meanings given to them in the Agreement.
Date: _______________________
______________________________
(signature)
______________________________
(print name)
______________________________
(print title)
C-2
EXHIBIT D
---------
CUSTODIAL AGREEMENT
D-1
EXHIBIT E
---------
CUSTODIAL ACCOUNT LETTER AGREEMENT
______________ __, ____
To: ______________________
______________________
______________________
(the "Depository")
As Servicer under the Sale and Servicing Agreement dated as of
_______, 200_, by and among [CWHEQ, Inc.], as Depositor, you, as Indenture
Trustee, ____________________, as Trust Administrator and Master Servicer,
______ Mortgage Investment Trust 200_-__, as Issuer,
_________________________, as Servicer and ____________________________, as
Seller (the "Sale and Servicing Agreement"), we hereby authorize and request
you to establish an account, as a Custodial Account pursuant to Section
4.02(d) of the Sale and Servicing Agreement, designated as
"_________________________ in trust for____________________, as Indenture
Trustee for ______ Mortgage Investment Trust 200_-__." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Servicer. This letter is submitted to you in duplicate. Please execute and
return one original to us.
_________________________
Servicer
By: ________________________________
Name: __________________________
Title: _________________________
Date: __________________________
E-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above.
__________________________________________
Depository
By: ______________________________________
Name:
Title:
Date:
E-2
EXHIBIT F
---------
ESCROW ACCOUNT LETTER AGREEMENT
______________ __, ____
To: ______________________
______________________
______________________
(the "Depository")
As Servicer under the Sale and Servicing Agreement dated as of
_______, 200_, by and among [CWHEQ, Inc.], as Depositor, you, as Indenture
Trustee, ____________________, as Trust Administrator and Master Servicer,
______ Mortgage Investment Trust 200_-__, as Issuer,
_________________________, as Servicer and ____________________________, as
Seller (the "Sale and Servicing Agreement"), we hereby authorize and request
you to establish an account, as an Escrow Account pursuant to Section 4.02(f)
of the Sale and Servicing Agreement, designated as "_________________________
in trust for _________________________, as Indenture Trustee for ______
Mortgage Investment Trust 200_-__." All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Servicer. This letter
is submitted to you in duplicate. Please execute and return one original to
us.
_________________________
Servicer
By: ________________________________
Name: __________________________
Title: _________________________
Date: __________________________
F-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above.
__________________________________________
Depository
By: ______________________________________
Name:
Title:
Date:
F-2
EXHIBIT G-1
-----------
FORM OF MONTHLY REMITTANCE ADVICE
[On file with the Master Servicer]
G-1-1
EXHIBIT G-2
-----------
STANDARD LAYOUT FOR MONTHLY DEFAULTED LOAN REPORT
[On file with the Master Servicer]
G-1-1
Exhibit G-3
Form 332 Realized Loss Report
____________________
[On file with Master Servicer]
G-3-1
EXHIBIT H-1
FORM OF PERFORMANCE CERTIFICATION
(Servicer/Subservicer)
[On file with the Trust Administrator]
H-1-1
EXHIBIT H-2
FORM OF PERFORMANCE CERTIFICATION
(Trust Administrator/Indenture Trustee/Custodian)
[On file with the Trust Administrator]
H-2-1
EXHIBIT I
FORM OF
SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE STATEMENT
The assessment of compliance to be delivered by [the Servicer] [the Master Servicer] [Indenture Trustee] [Trust
Administrator] [Name of Subservicer] shall address, at a minimum, the criteria identified as below as "Applicable Servicing
Criteria":
-----------------------------------------------------------------------------------------------------------------------------------
Applicable
Servicing Criteria Servicing Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
------------------ --------------------------
Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
1122(d)(1)(i) accordance with the transaction agreements.
------------------ --------------------------
If any material servicing activities are outsourced to
third parties, policies and procedures are instituted to
monitor the third party's performance and
1122(d)(1)(ii) compliance with such servicing activities.
------------------ --------------------------
Any requirements in the transaction agreements to maintain a back-up
1122(d)(1)(iii) servicer for the mortgage loans are maintained.
------------------ --------------------------
A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the amount
of coverage required by and otherwise in accordance with
1122(d)(2)(i) the terms of the transaction agreements.
------------------ --------------------------
Cash Collection and Administration
------------------ --------------------------
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days
following receipt, or such other number of days
1122(d)(2)(i) specified in the transaction agreements.
------------------ --------------------------
Disbursements made via wire transfer on behalf of an obligor or to an investor
1122(d)(2)(ii) are made only by authorized personnel.
------------------ --------------------------
Advances of funds or guarantees regarding collections,
cash flows or distributions, and any interest or other
fees charged for such advances, are
1122(d)(2)(iii) made, reviewed and approved as specified in the transaction agreements.
------------------ --------------------------
The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g.,
with respect to commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
------------------ --------------------------
Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this criterion,
"federally insured depository institution" with respect
to a foreign financial institution means a foreign
financial institution that meets the
1122(d)(2)(v) requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
------------------ --------------------------
Unissued checks are safeguarded so as to prevent unauthorized
1122(d)(2)(vi) access.
------------------ --------------------------
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate;
(B) prepared within 30 calendar days after the bank
statement cutoff date, or such other number of days
specified in the transaction agreements; (C) reviewed
and approved by someone other than the person who
prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling
items are resolved within 90 calendar days of their
original identification, or such other number of days
1122(d)(2)(vii) specified in the
------------------ --------------------------
I-1
-----------------------------------------------------------------------------------------------------------------------------------
Applicable
Servicing Criteria Servicing Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
transaction agreements.
------------------ --------------------------
Investor Remittances and Reporting
------------------ --------------------------
Reports to investors, including those to be filed with
the Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms
set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and
regulations; and (D) agree with investors' or the Trust
Administrator's records as to the total unpaid principal
balance and
1122(d)(3)(i) number of mortgage loans serviced by the Servicer.
------------------ --------------------------
Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and
other terms set forth in the transaction
1122(d)(3)(ii) agreements.
------------------ --------------------------
Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or
such other number of days specified in the
1122(d)(3)(iii) transaction agreements.
------------------ --------------------------
Amounts remitted to investors per the investor reports agree with cancelled
1122(d)(3)(iv) checks, or other form of payment, or custodial bank statements.
------------------ --------------------------
Pool Asset Administration
------------------ --------------------------
Collateral or security on mortgage loans is maintained as required by the
1122(d)(4)(i) transaction agreements or related mortgage loan documents.
------------------ --------------------------
Mortgage loan and related documents are safeguarded as required by the
1122(d)(4)(ii) transaction agreements.
------------------ --------------------------
Any additions, removals or substitutions to the asset
pool are made, reviewed and approved in accordance with
any conditions or requirements in the
1122(d)(4)(iii) transaction agreements.
------------------ --------------------------
Payments on mortgage loans, including any payoffs, made
in accordance with the related mortgage loan documents
are posted to the Servicer's obligor records maintained
no more than two business days after receipt, or such
other number of days specified in the transaction
agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the
1122(d)(4)(iv) related mortgage loan documents.
------------------ --------------------------
The Servicer's records regarding the mortgage loans agree with the
1122(d)(4)(v) Servicer's records with respect to an obligor's unpaid principal balance.
------------------ --------------------------
Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications or
re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements
1122(d)(4)(vi) and related pool asset documents.
------------------ --------------------------
Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with
the timeframes or other requirements established by the
1122(d)(4)(vii) transaction agreements.
------------------ --------------------------
Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such records
are maintained on at least a monthly basis, or such
other period specified in the transaction agreements,
and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone
calls, letters and payment rescheduling plans in cases
where delinquency is deemed temporary (e.g., illness or
1122(d)(4)(viii) unemployment).
------------------ --------------------------
Adjustments to interest rates or rates of return for mortgage loans with
1122(d)(4)(ix) variable rates are computed based on the related mortgage loan documents.
------------------ --------------------------
I-2
-----------------------------------------------------------------------------------------------------------------------------------
Applicable
Servicing Criteria Servicing Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor (such
as escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents,
on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest on
such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and
state laws; and (C) such funds are returned to the
obligor within 30 calendar days of full repayment of the
related mortgage loans, or such other number of days
1122(d)(4)(x) specified in the transaction agreements.
------------------ --------------------------
Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such other
1122(d)(4)(xi) number of days specified in the transaction agreements.
------------------ --------------------------
Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid from
the servicer's funds and not charged to the obligor, unless
1122(d)(4)(xii) the late payment was due to the obligor's error or omission.
------------------ --------------------------
Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other
1122(d)(4)(xiii) number of days specified in the transaction agreements.
------------------ --------------------------
Delinquencies, charge-offs and uncollectible accounts are recognized and
1122(d)(4)(xiv) recorded in accordance with the transaction agreements.
------------------ --------------------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation
AB, is maintained as set forth in the
1122(d)(4)(xv) transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
[NAME OF SERVICER] [NAME OF MASTER
SERVICER] [NAME OF TRUST
ADMINISTRATOR] [NAME OF INDENTURE
TRUSTEE] [NAME OF SUBSERVICER]
Date: _________________________
By: ________________________________
Name:
Title:
I-3
EXHIBIT J
Item 1119 Parties
ASSET-BACKED NOTES,
Series 200_-__
[Date]
-------------------------------------------------------------------------------
Party Contact Information
-------------------------------------------------------------------------------
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J-1
EXHIBIT K
[FORM OF] [CLASS AF-5B] INSURANCE POLICY
[On file with the Custodian.]
K-1
EXHIBIT L
[FORM OF] SUBSEQUENT TRANSFER AGREEMENT
[On file with the Custodian.]
L-1
EXHIBIT M
[FORM OF] ▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATION
(Replacement of Master Servicer)
[On file with the Custodian.]
L-1
SCHEDULE A
----------
MORTGAGE LOAN SCHEDULE
[On file with the Custodian.]
Schedule A-1