EXHIBIT 99.1
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC,
as Depositor
AMERICAN HOME MORTGAGE INVESTMENT TRUST 2003-1,
as Issuer
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Indenture Trustee
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Master Servicer and Securities Administrator
and
EMC MORTGAGE CORPORATION,
as Seller and Company
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SALE AND SERVICING AGREEMENT
Dated as of December 31, 2003
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Structured Asset Mortgage Investments II Inc.
American Home Mortgage Investment Trust 2003-1,
Mortgage-Backed Notes, Series 2003-1
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.01 DEFINITIONS............................................................................2
Section 1.02 OTHER DEFINITIONAL PROVISIONS..........................................................2
ARTICLE II
Conveyance of Mortgage Loans;
Section 2.01 CONVEYANCE OF MORTGAGE LOANS TO ISSUER.................................................3
Section 2.02 ACCEPTANCE OF MORTGAGE LOANS BY THE ISSUER.............................................5
Section 2.03 ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE AGREEMENT.........................7
Section 2.04 SUBSTITUTION OF MORTGAGE LOANS.........................................................8
Section 2.05 REPRESENTATIONS AND WARRANTIES CONCERNING THE DEPOSITOR................................9
Section 2.06 REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER SERVICER..........................10
Section 2.07 ASSIGNMENT OF AGREEMENT...............................................................11
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 MASTER SERVICER.......................................................................12
Section 3.02 [Reserved]............................................................................13
Section 3.03 MONITORING OF SERVICER................................................................13
Section 3.04 FIDELITY BOND.........................................................................14
Section 3.05 POWER TO ACT; PROCEDURES..............................................................14
Section 3.06 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS............................................14
Section 3.07 RELEASE OF MORTGAGE FILES.............................................................15
Section 3.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER
TO BE HELD FOR ISSUER AND INDENTURE TRUSTEE...........................................15
Section 3.09 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES................................16
Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS......................................17
Section 3.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES................................17
Section 3.12 INDENTURE TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES
AND DOCUMENTS.........................................................................17
Section 3.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS.............................................18
Section 3.14 COMPENSATION FOR THE MASTER SERVICER..................................................18
Section 3.15 REO PROPERTY..........................................................................18
Section 3.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.........................................19
Section 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT......................................19
Section 3.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.................................20
Section 3.19 THE COMPANY...........................................................................21
Section 3.20 UCC...................................................................................21
Section 3.21 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.........................................21
Section 3.22 MONTHLY ADVANCES......................................................................21
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Section 3.23 COMPENSATING INTEREST PAYMENTS........................................................22
ARTICLE IV
Accounts
Section 4.01 PROTECTED ACCOUNTS....................................................................23
Section 4.02 MASTER SERVICER COLLECTION ACCOUNT....................................................24
Section 4.03 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER SERVICER
COLLECTION ACCOUNT....................................................................25
Section 4.04 PAYMENT ACCOUNT.......................................................................26
Section 4.05 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE PAYMENT ACCOUNT..........................27
ARTICLE V
Section 5.01 LIABILITIES OF THE MASTER SERVICER....................................................29
Section 5.02 MERGER OR CONSOLIDATION OF THE MASTER SERVICER........................................29
Section 5.03 INDEMNIFICATION OF THE INDENTURE TRUSTEE, OWNER TRUSTEE, THE MASTER
SERVICER AND THE SECURITIES ADMINISTRATOR.............................................29
Section 5.04 LIMITATIONS ON LIABILITY OF THE MASTER SERVICER AND OTHERS............................30
Section 5.05 MASTER SERVICER NOT TO RESIGN.........................................................31
Section 5.06 SUCCESSOR MASTER SERVICER.............................................................31
Section 5.07 SALE AND ASSIGNMENT OF MASTER SERVICING...............................................31
ARTICLE VI
Default
Section 6.01 MASTER SERVICER EVENTS OF DEFAULT.....................................................33
Section 6.02 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR....................................34
Section 6.03 NOTIFICATION TO NOTEHOLDERS...........................................................35
Section 6.04 WAIVER OF DEFAULTS....................................................................36
ARTICLE VII
Miscellaneous Provisions
Section 7.01 AMENDMENT.............................................................................37
Section 7.02 RECORDATION OF AGREEMENT..............................................................38
Section 7.03 GOVERNING LAW.........................................................................38
Section 7.04 NOTICES...............................................................................38
Section 7.05 SEVERABILITY OF PROVISIONS............................................................39
Section 7.06 SUCCESSORS AND ASSIGNS................................................................39
Section 7.07 ARTICLE AND SECTION HEADINGS..........................................................39
Section 7.08 COUNTERPARTS..........................................................................39
Section 7.09 NOTICE TO RATING AGENCIES.............................................................39
Section 7.10 TERMINATION...........................................................................39
Section 7.11 NO PETITION...........................................................................40
Section 7.12 NO RECOURSE...........................................................................40
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EXHIBITS
Exhibit A - Mortgage Loan Schedule
Exhibit B - Form of Initial Certification
Exhibit C - Form of Interim Certification
Exhibit D - Form of Final Certification
Exhibit E - Request for Release of Documents
Exhibit F - AHM Servicing Agreement
Exhibit G - Assignment Agreement
Exhibit H - Mortgage Loan Purchase Agreement
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SALE AND SERVICING AGREEMENT
Sale and Servicing Agreement dated as of December 31, 2003 (the
"Agreement"), among Structured Asset Mortgage Investments II Inc., a Delaware
corporation, as depositor (the "Depositor"), American Home Mortgage Investment
Trust 2003-1, as issuer (the "Issuer"), Deutsche Bank National Trust Company, a
national banking association, not in its individual capacity but solely as
indenture trustee (the "Indenture Trustee"), ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as master servicer (in such capacity, the "Master
Servicer") and as securities administrator (in such capacity, the "Securities
Administrator"), and EMC Mortgage Corporation, as seller (in such capacity, the
"Seller") and as company (in such capacity, the "Company").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor acquired the Mortgage
Loans from the Seller pursuant to the Mortgage Loan Purchase Agreement. Prior to
the Closing Date, pursuant to a Trust Agreement, as amended and restated on the
Closing Date, the Depositor created American Home Mortgage Investment Trust
2003-1, a Delaware statutory trust, for the purpose of holding the Mortgage
Loans and issuing the Trust Certificates (the "Certificates"), pursuant to the
Trust Agreement, and the Notes, pursuant to the Indenture. Pursuant to this
Agreement, on the Closing Date, the Depositor will sell the Mortgage Loans and
certain other property to the Issuer and pursuant to the Indenture, the Issuer
will pledge all of its right, title and interest in and to the Mortgage Loans
and other property acquired from the Depositor pursuant to this Agreement to the
Indenture Trustee to secure the Notes issued pursuant to the Indenture. In
consideration for the Mortgage Loans and other property conveyed pursuant to
this Agreement, the Depositor will receive from the Issuer the Certificates
evidencing the entire beneficial ownership interest in the Issuer and the Notes
representing indebtedness of the Issuer.
The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $215,651,899.
In consideration of the mutual agreements herein contained, each of the
Depositor, the Issuer, the Master Servicer, the Securities Administrator, the
Seller, the Company and the Indenture Trustee undertakes and agrees to perform
their respective duties hereunder as follows:
ARTICLE I
Definitions
Section 1.01 DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions contained in Appendix A to the Indenture which
is incorporated by reference herein. All other capitalized terms used herein
shall have the meanings specified herein.
Section 1.02 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document, to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
(d) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
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ARTICLE II
Conveyance of Mortgage Loans;
Section 2.01 CONVEYANCE OF MORTGAGE LOANS TO ISSUER. (a) The Depositor
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Issuer without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule,
including all interest and principal due with respect to the Mortgage Loans
after the Cut-off Date, but excluding any payments of principal and interest due
on or prior to the Cut-off Date; (ii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Master Servicer Collection Account, (iii) such assets relating to the Mortgage
Loans as from time to time may be held by the Servicer in the Protected Account,
the Master Servicer in the Master Servicer Collection Account and the Indenture
Trustee in the Payment Account, (iv) any REO Property, (v) the Required
Insurance Policies and any amounts paid or payable by the insurer under any
Insurance Policy (to the extent the mortgagee has a claim thereto), (vi) the
Mortgage Loan Purchase Agreement to the extent provided in Subsection 2.03(a),
(vii) the rights with respect to the AHM Servicing Agreement as assigned to the
Issuer by the Assignment Agreement and (viii) any proceeds of the foregoing.
Although it is the intent of the Depositor and the Issuer that the conveyance of
the Depositor's right, title and interest in and to the Mortgage Loans and other
assets in the Trust Estate to the Issuer pursuant to this Agreement shall
constitute a purchase and sale and not a loan, in the event that such conveyance
is deemed to be a loan, it is the intent of the parties to this Agreement that
the Depositor shall be deemed to have granted to the Issuer a first priority
perfected security interest in all of the Depositor's right, title and interest
in, to and under the Mortgage Loans and other assets in the Trust Estate, and
that this Agreement shall constitute a security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Depositor
hereby delivers to the Indenture Trustee, on behalf of the Issuer, with respect
to each Mortgage Loan:
(i) the original Mortgage Note, endorsed without recourse in
blank or to the order of the Indenture Trustee and showing an unbroken chain of
endorsements from the originator thereof to the Person endorsing it in blank or
to the Indenture Trustee, or lost note affidavit together with a copy of the
related Mortgage Note;
(ii) the original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or if the original
is not available, a copy), with evidence of such recording indicated thereon (or
if clause (w) in the proviso below applies, shall be in recordable form);
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if permitted
in the jurisdiction in which the Mortgaged Property is located) in blank or to
"Deutsche Bank National Trust Company, as Indenture Trustee, on behalf of the
Noteholders", with evidence of recording with respect to each Mortgage Loan in
the name of the Indenture Trustee thereon (or if clause (w) in the proviso below
applies or for Mortgage Loans with respect to which the related Mortgaged
Property is located in a state other
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than Maryland or an Opinion of Counsel has been provided as set forth in this
Section 2.01(b), shall be in recordable form);
(iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent available to the Depositor with evidence of
recording thereon;
(v) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any;
(vi) the original or a copy of the policy of title insurance
or mortgagee's certificate of title insurance or commitment or binder for title
insurance; and
(vii) originals of all modification agreements, if applicable
and available;
PROVIDED, HOWEVER, that in lieu of the foregoing, the Depositor may deliver to
the Indenture Trustee, the following documents, under the circumstances set
forth below: (w) in lieu of the original Security Instrument (including the
Mortgage), assignments to the Indenture Trustee or intervening assignments
thereof which have been delivered, are being delivered or will, upon receipt of
recording information relating to such documents required to be included
thereon, be delivered to recording offices for recording and have not been
returned to the Depositor in time to permit their delivery as specified above,
the Depositor may deliver a true copy thereof with a certification by the
Servicer, or its agent on its behalf, substantially to the effect that such copy
is a true and correct copy of the original; (x) in lieu of the Security
Instrument, assignment in blank or to the Indenture Trustee or intervening
assignments thereof, if the applicable jurisdiction retains the originals of
such documents (as evidenced by a certification from the Depositor to such
effect) the Depositor may deliver photocopies of such documents containing an
original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded or from the Depositor's agent,
escrow agent or closing attorney; (y) in lieu of the Mortgage Notes relating to
the Mortgage Loans identified on Exhibit 5 to the Mortgage Loan Purchase
Agreement, the Depositor may deliver lost note affidavits from the Seller; and
(z) the Depositor shall not be required to deliver intervening assignments or
Mortgage Note endorsements between the related Underlying Seller and the Seller,
between the Seller and the Depositor, between the Depositor and the Issuer, and
between the Issuer and the Indenture Trustee; and provided, further, however,
that in the case of Mortgage Loans which have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering
the above documents, may deliver to the Indenture Trustee, a certification to
such effect and shall deposit all amounts paid in respect of such Mortgage Loans
in the Master Servicer Collection Account on the Closing Date. The Depositor
shall deliver such original documents (including any original documents as to
which certified copies had previously been delivered) to the Indenture Trustee,
promptly after they are received. The Depositor shall cause the Seller, at its
expense, to cause each assignment of the Security Instrument to the Indenture
Trustee to be recorded not later than 180 days after the Closing Date, unless
(a) such recordation is not required by the Rating Agency as evidenced in
writing or an Opinion of Counsel addressed to the Indenture Trustee has been
provided to the Indenture Trustee and the Issuer which states that recordation
of such Security Instrument is not required to protect the interests of the
Noteholders in the related Mortgage Loans or (b) MERS is identified on the
Mortgage or on a properly recorded assignment of the Mortgage as the mortgagee
of record solely as nominee for the Seller and its
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successor and assigns; provided, however, notwithstanding the foregoing, each
assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Issuer or the Indenture Trustee, upon the
earliest to occur of: (i) reasonable direction by the Holders of Notes
aggregating at least 25% of the Note Principal Balance of the Notes, (ii) the
occurrence of a Master Servicer Event of Default or an Event of Default, (iii)
the occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller
and (iv) the occurrence of a servicing transfer as described in Section 6.02
hereof. Notwithstanding the foregoing, if the Seller fails to pay the cost of
recording the assignments, such expense will be paid by the Indenture Trustee
and the Indenture Trustee shall be reimbursed for such expenses by the Trust
Estate in accordance with Section 6.07 of the Indenture.
Section 2.02 ACCEPTANCE OF MORTGAGE LOANS BY THE ISSUER. (a) The Issuer
acknowledges the sale, transfer and assignment of the Trust Estate to it by the
Depositor and receipt of, subject to further review by the Indenture Trustee, on
its behalf, and the exceptions which may be noted by the Indenture Trustee, on
its behalf, pursuant to the procedures described below, and the Indenture
Trustee declares that it holds, the documents (or certified copies thereof)
delivered to the Indenture Trustee, pursuant to Section 2.01, and declares that
it will continue to hold those documents and any amendments, replacements or
supplements thereto and all other assets of the Trust Estate delivered to it, in
trust for the use and benefit of all present and future Holders of the Notes
issued pursuant to the Indenture. On the Closing Date, the Indenture Trustee,
with respect to the Mortgage Loans, shall acknowledge with respect to each
Mortgage Loan by delivery to the Depositor, the Seller and the Issuer of an
Initial Certification receipt of the Mortgage File, but without review of such
Mortgage File, except to the extent necessary to confirm that such Mortgage File
contains the related Mortgage Note or lost note affidavit. No later than 90 days
after the Closing Date (or, with respect to any Substitute Mortgage Loan, within
five Business Days after the receipt by the Indenture Trustee thereof), the
Indenture Trustee agrees, for the benefit of the Noteholders, to review, each
Mortgage File delivered to it and to execute and deliver, or cause to be
executed and delivered, to the Depositor, the Seller and Issuer an Interim
Certification. In conducting such review, the Indenture Trustee will ascertain
whether all documents required to be reviewed by it have been executed and
received, and based on the Mortgage Loan Schedule, whether the Mortgage Notes
relate, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans it has received, as identified in
the Mortgage Loan Schedule. In performing any such review, the Indenture Trustee
may conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Indenture Trustee finds any document constituting part of the Mortgage File has
not been executed or received, or is unrelated, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans identified in Exhibit A or does not conform on its face to the review
criteria specified in this Section (a "Material Defect"), the Indenture Trustee
shall promptly notify the Seller. In accordance with the Mortgage Loan Purchase
Agreement, the Seller shall correct or cure any such Material Defect within
ninety (90) days from the date of notice from the Indenture Trustee of the
defect and if the Seller fails to correct or cure the Material Defect within
such period, the Indenture Trustee shall enforce the Seller's obligation under
the Mortgage Loan Purchase Agreement to, within 90 days from the Indenture
Trustee's notification, provide a Substitute Mortgage Loan or purchase such
Mortgage Loan at the Repurchase Price; provided, however, that if such Material
Defect relates solely to the inability of the Seller to deliver the original
Security Instrument or intervening assignments thereof, or a certified copy
because the originals of such
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documents, or a certified copy have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan if
the Seller delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date. The
foregoing repurchase obligation shall not apply in the event that the Seller
cannot deliver such original or copy of any document submitted for recording to
the appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Indenture Trustee shall be effected
by the Seller within thirty days of its receipt of the original recorded
document.
(b) No later than 180 days after the Closing Date, the Indenture
Trustee will review, for the benefit of the Noteholders, the Mortgage Files
delivered to it and will execute and deliver or cause to be executed and
delivered to the Depositor, the Seller and the Issuer a Final Certification. In
conducting such review, the Indenture Trustee will ascertain whether an original
of each document required to be recorded has been returned from the recording
office with evidence of recording thereon or a certified copy has been obtained
from the recording office. If the Indenture Trustee finds a Material Defect, the
Indenture Trustee shall promptly notify the Seller (provided, however, that with
respect to those documents described in subsections (b)(iv), (v) and (vii) of
Section 2.01, the Indenture Trustee's obligations shall extend only to the
documents actually delivered to the Indenture Trustee pursuant to such
subsections). In accordance with the Mortgage Loan Purchase Agreement, the
Seller shall correct or cure any such Material Defect within 90 days from the
date of notice from the Indenture Trustee of the Material Defect and if the
Seller is unable to cure such Material Defect within such period, and if such
Material Defect materially and adversely affects the interests of the
Noteholders in the related Mortgage Loan, the Indenture Trustee shall enforce
the Seller's obligation under the Mortgage Loan Purchase Agreement to, within 90
days from the Indenture Trustee's notification, provide a Substitute Mortgage
Loan or purchase such Mortgage Loan at the Repurchase Price; provided, however,
that if such defect relates solely to the inability of the Seller to deliver the
original Security Instrument or intervening assignments thereof, or a certified
copy, because the originals of such documents or a certified copy, have not been
returned by the applicable jurisdiction, the Seller shall not be required to
purchase such Mortgage Loan, if the Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 360 days after
the Closing Date. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver such original or copy of any document
submitted for recording to the appropriate recording office in the applicable
jurisdiction because such document has not been returned by such office;
provided that the Seller shall instead deliver a recording receipt of such
recording office or, if such receipt is not available, a certificate confirming
that such documents have been accepted for recording, and delivery to the
Indenture Trustee shall be effected by the Seller within thirty days of its
receipt of the original recorded document.
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Subsections 2.02(a) or (b) above, the Seller shall remit to the
Master Servicer the Repurchase Price for deposit in the Master Servicer
Collection Account and the Seller shall provide to the Securities Administrator
and the Indenture Trustee written notification detailing the components of the
Repurchase Price. Upon deposit of the Repurchase Price in the Master Servicer
Collection Account, the Depositor shall notify the Indenture Trustee and, the
Indenture Trustee (upon receipt of a Request
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for Release in the form of Exhibit E attached hereto with respect to such
Mortgage Loan and certification that the Repurchase Price has been deposited in
the Master Servicer Collection Account), shall release to the Seller the related
Mortgage File and the Indenture Trustee shall execute and deliver all
instruments of transfer or assignment, without recourse, representation or
warranty, furnished to it by the Seller, as are necessary to vest in the Seller
title to and rights under the Mortgage Loan. Such purchase shall be deemed to
have occurred on the date on which the Repurchase Price in available funds is
deposited in the Master Servicer Collection Account. The Master Servicer shall
amend the Mortgage Loan Schedule, which was previously delivered to it by the
Depositor in a form agreed to between the Depositor and the Indenture Trustee,
to reflect such repurchase and shall promptly deliver to the Rating Agency, the
Indenture Trustee and the Issuer a copy of such amendment. The obligation of the
Seller to repurchase or substitute for any Mortgage Loan a Substitute Mortgage
Loan as to which such a Material Defect in a constituent document exists shall
be the sole remedy respecting such Material Defect available to the Issuer, the
Noteholders or to the Indenture Trustee on their behalf.
Section 2.03 ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE
AGREEMENT. (a) The Depositor hereby assigns to the Issuer, all of its right,
title and interest in the Mortgage Loan Purchase Agreement, including but not
limited to the Depositor's rights and obligations pursuant to the AHM Servicing
Agreement (noting that the Seller has retained the right in the event of breach
of the representations, warranties and covenants, if any, with respect to the
Mortgage Loans of the Servicer under the AHM Servicing Agreement to enforce the
provisions thereof and to seek all or any available remedies). The Depositor
hereby acknowledges that such right, title and interest in the Mortgage Loan
Purchase Agreement, will be pledged by the Issuer to the Indenture Trustee
pursuant to the Indenture. The obligations of the Seller to substitute or
repurchase, as applicable, a Mortgage Loan shall be the Issuer's, the Indenture
Trustee's and the Noteholders' sole remedy for any breach thereof. At the
request of the Issuer or the Indenture Trustee, the Depositor shall take such
actions as may be necessary to enforce the above right, title and interest on
behalf of the Issuer, the Indenture Trustee and the Noteholders shall execute
such further documents as the Issuer or the Indenture Trustee may reasonably
require in order to enable the Indenture Trustee to carry out such enforcement.
(b) If the Depositor, the Securities Administrator, the Issuer or the
Indenture Trustee discovers a breach of any of the representations and
warranties set forth in the Mortgage Loan Purchase Agreement, which breach
materially and adversely affects the value of the interests of the Issuer, the
Noteholders or the Indenture Trustee in the related Mortgage Loan, the party
discovering the breach shall give prompt written notice of the breach to the
other parties. The Seller, within 90 days of its discovery or receipt of notice
that such breach has occurred (whichever occurs earlier), shall cure the breach
in all material respects or, subject to the Mortgage Loan Purchase Agreement and
Section 2.04 of this Agreement, shall purchase the Mortgage Loan or any property
acquired with respect thereto from the Issuer; provided, however, that if there
is a breach of any representation set forth in the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, and the Mortgage
Loan or the related property acquired with respect thereto has been sold, then
the Seller shall pay, in lieu of the Repurchase Price, any excess of the
Repurchase Price over the Net Liquidation Proceeds received upon such sale. If
the Net Liquidation Proceeds exceed the Repurchase Price, any excess shall be
paid to the Seller to the extent not required by law to be paid to the borrower.
Any such purchase by the Seller shall be made by providing an amount equal to
the
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▇▇▇▇▇▇▇▇▇▇ Price to the Master Servicer for deposit in the Master Servicer
Collection Account and written notification detailing the components of such
Repurchase Price. The Depositor shall submit to the Indenture Trustee a Request
for Release, and the Indenture Trustee shall release upon receipt of
certification from the Master Servicer that the Repurchase Price has been
deposited in the Master Servicer Collection Account, to the Seller the related
Mortgage File and the Indenture Trustee shall execute and deliver all
instruments of transfer or assignment furnished to it by the Seller, without
recourse, representation or warranty as are necessary to vest in the Seller
title to and rights under the Mortgage Loan or any property acquired with
respect thereto. Such purchase shall be deemed to have occurred on the date on
which the Repurchase Price in available funds is deposited in the Master
Servicer Collection Account. The Master Servicer shall amend the Mortgage Loan
Schedule to reflect such repurchase and shall promptly deliver to the Issuer,
the Indenture Trustee and the Rating Agency a copy of such amendment.
Enforcement of the obligation of the Seller to purchase (or substitute a
Substitute Mortgage Loan for) any Mortgage Loan or any property acquired with
respect thereto (or pay the Repurchase Price as set forth in the above proviso)
as to which a breach has occurred and is continuing shall constitute the sole
remedy respecting such breach available to the Issuer, the Noteholders or the
Indenture Trustee on their behalf.
Section 2.04 SUBSTITUTION OF MORTGAGE LOANS. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this Agreement, the Seller may, no later than the date by which such purchase by
the Seller would otherwise be required, tender to the Indenture Trustee a
Substitute Mortgage Loan accompanied by a certificate of an authorized officer
of the Seller that such Substitute Mortgage Loan conforms to the requirements
set forth in the definition of "Substitute Mortgage Loan" in this Agreement. The
Indenture Trustee shall examine the Mortgage File for any Substitute Mortgage
Loan in the manner set forth in Section 2.02(a) and the Indenture Trustee shall
notify the Seller, in writing, within five Business Days after receipt, whether
or not the documents relating to the Substitute Mortgage Loan satisfy the
requirements of the fifth sentence of Subsection 2.02(a). Within two Business
Days after such notification, the Seller shall provide to the Master Servicer
for deposit in the Master Servicer Collection Account the amount, if any, by
which the Outstanding Principal Balance as of the next preceding Due Date of the
Mortgage Loan for which substitution is being made, after giving effect to the
Scheduled Principal due on such date, exceeds the Outstanding Principal Balance
as of such date of the Substitute Mortgage Loan, after giving effect to
Scheduled Principal due on such date, which amount shall be treated for the
purposes of this Agreement as if it were the payment by the Seller of the
Repurchase Price for the purchase of a Mortgage Loan by the Seller. After such
notification to the Seller and, if any such excess exists, upon receipt of
certification from the Master Servicer that such excess has been deposited in
the Master Servicer Collection Account, the Indenture Trustee shall accept such
Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage Loan
hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Trust Estate and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Seller. The Scheduled Principal on a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Seller and the Scheduled Principal on the Mortgage Loan
for which the substitution is made due on such Due Date shall be the property of
the Trust Estate. Upon acceptance of the Substitute Mortgage Loan (and delivery
to the Indenture
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Trustee of a Request for Release for such Mortgage Loan), the Indenture Trustee
shall release to the Seller the related Mortgage File related to any Mortgage
Loan released pursuant to the Mortgage Loan Purchase Agreement or Section 2.04
of this Agreement, as applicable, and shall execute and deliver all instruments
of transfer or assignment, without recourse, representation or warranty in form
as provided to it as are necessary to vest in the Seller title to and rights
under any Mortgage Loan released pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable. The Seller shall
deliver to the Indenture Trustee the documents related to the Substitute
Mortgage Loan in accordance with the provisions of the Mortgage Loan Purchase
Agreement and Subsections 2.01(b) and 2.02(b) of this Agreement, as applicable,
with the date of acceptance of the Substitute Mortgage Loan deemed to be the
Closing Date for purposes of the time periods set forth in those Subsections.
The representations and warranties set forth in the Mortgage Loan Purchase
Agreement shall be deemed to have been made by the Seller with respect to each
Substitute Mortgage Loan as of the date of acceptance of such Mortgage Loan by
the Indenture Trustee. The Master Servicer shall amend the Mortgage Loan
Schedule to reflect such substitution and shall provide a copy of such amended
Mortgage Loan Schedule to the Issuer, the Indenture Trustee and the Rating
Agencies.
Section 2.05 REPRESENTATIONS AND WARRANTIES CONCERNING THE DEPOSITOR.
The Depositor hereby represents and warrants to the Issuer, the Indenture
Trustee, the Master Servicer and the Securities Administrator as follows:
(i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (b) is
qualified and in good standing as a foreign corporation to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect on
the Depositor's business as presently conducted or on the Depositor's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(ii) the Depositor has full corporate power to own its
property, to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(iii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Depositor; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Depositor or its properties
or the articles of incorporation or by-laws of the Depositor, except those
conflicts, breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Depositor's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;
(iv) the execution, delivery and performance by the Depositor
of this Agreement and the consummation of the transactions contemplated hereby
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made;
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(v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid and binding obligation of the Depositor
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the enforcement
of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to
the knowledge of the Depositor, threatened against the Depositor, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii) with
respect to any other matter which in the judgment of the Depositor will be
determined adversely to the Depositor and will if determined adversely to the
Depositor materially and adversely affect the Depositor's ability to enter into
this Agreement or perform its obligations under this Agreement; and the
Depositor is not in default with respect to any order of any court,
administrative agency, arbitrator or governmental body so as to materially and
adversely affect the transactions contemplated by this Agreement; and
(vii) immediately prior to the transfer and assignment to the
Issuer, each Mortgage Note and each Mortgage were not subject to an assignment
or pledge, and the Depositor had good and marketable title to and was the sole
owner thereof and had full right to transfer and sell such Mortgage Loan to the
Issuer free and clear of any encumbrance, equity, lien, pledge, charge, claim or
security interest.
Section 2.06 REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER
SERVICER. The Master Servicer represents and warrants to the Issuer, the
Depositor, the Seller and the Indenture Trustee for the benefit of the
Noteholders, as follows:
(i) The Master Servicer is a national banking association duly
organized, validly existing and in good standing under the laws of the Untied
States of America and has the corporate power to own its assets and to transact
the business in which it is currently engaged. The Master Servicer 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
properties owned or leased by it requires such qualification and in which the
failure to so qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Master Servicer or
the validity or enforceability of this Agreement;
(ii) The Master Servicer has the power and authority to make,
execute, deliver and perform this Agreement and all of the transactions
contemplated under this 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 Master Servicer 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 Master Servicer is not required to obtain the
consent of any other Person or any consent, license, approval or authorization
from, or registration or declaration with, any
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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;
(iv) The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby by the Master Servicer will
not violate any provision of any existing law or regulation or any order or
decree of any court applicable to the Master Servicer or any provision of the
certificate of incorporation or bylaws of the Master Servicer, or constitute a
material breach of any mortgage, indenture, contract or other agreement to which
the Master Servicer is a party or by which the Master Servicer may be bound; and
(v) No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending (other than
litigation with respect to which pleadings or documents have been filed with a
court, but not served on the Master Servicer), or to the knowledge of the Master
Servicer threatened, against the Master Servicer or any of its properties or
with respect to this Agreement or the Notes or the Certificates which, to the
knowledge of the Master Servicer, has a reasonable likelihood of resulting in a
material adverse effect on the transactions contemplated by this Agreement.
The foregoing representations and warranties shall survive any
termination of the Master Servicer hereunder.
Section 2.07 ASSIGNMENT OF AGREEMENT. The Seller, the Depositor and the
Master Servicer hereby acknowledge and agree that the Issuer may assign its
interest under this Agreement to the Indenture Trustee, for the benefit of the
Noteholders, as may be required to effect the purposes of the Indenture, without
further notice to, or consent of, the Seller, the Depositor or the Master
Servicer, and the Indenture Trustee shall succeed to such of the rights of the
Issuer hereunder as shall be so assigned. The Issuer shall, pursuant to the
Indenture, assign all of its right, title and interest in and to the Mortgage
Loans and its right to exercise the remedies created by Article II of this
Agreement for breaches of the representations, warranties, agreements and
covenants of the Seller contained in the Mortgage Loan Purchase Agreement, to
the Indenture Trustee, for the benefit of the Noteholders. The Seller agrees
that, upon such assignment to the Indenture Trustee, such representations,
warranties, agreements and covenants will run to and be for the benefit of the
Indenture Trustee and the Indenture Trustee may enforce, without joinder of the
Depositor or the Issuer, the repurchase obligations of the Seller set forth
herein and in the Mortgage Loan Purchase Agreement with respect to breaches of
such representations, warranties, agreements and covenants.
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ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 MASTER SERVICER. The Master Servicer shall supervise,
monitor and oversee the obligations of the Servicer to service and administer
the Mortgage Loans in accordance with the terms of the AHM Servicing Agreement
and shall have full power and authority to do any and all things which it may
deem necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the Master Servicer
shall act in a manner consistent with Accepted Master Servicing Practices.
Furthermore, the Master Servicer shall oversee and consult with the Servicer as
necessary from time-to-time to carry out the Master Servicer's obligations
hereunder, shall receive, review and evaluate all reports, information and other
data provided to the Master Servicer by the Servicer and shall cause the
Servicer to perform and observe the covenants, obligations and conditions to be
performed or observed by such Servicer under the AHM Servicing Agreement. The
Master Servicer shall independently and separately monitor the Servicer's
servicing activities with respect to the Mortgage Loans, reconcile the results
of such monitoring with such information provided in the previous sentence on a
monthly basis and coordinate corrective adjustments to the Servicer's and Master
Servicer's records, and based on such reconciled and corrected information, the
Master Servicer shall provide such information to the Securities Administrator
as shall be necessary in order for it to prepare the statements specified in
Section 7.05 of the Indenture, and prepare any other information and statements
required to be forwarded by the Master Servicer hereunder. The Master Servicer
shall reconcile the results of its Mortgage Loan monitoring with the actual
remittances of the Servicer pursuant to the AHM Servicing Agreement.
The Indenture Trustee shall furnish the Servicer and the Master
Servicer with any powers of attorney and other documents in form as provided to
it necessary or appropriate to enable the Servicer and the Master Servicer to
service and administer the related Mortgage Loans and REO Property. The
Indenture Trustee shall not be liable for the Servicer's or the Master
Servicer's use or misuse of such powers of attorney.
The Indenture Trustee shall provide access to the records and
documentation in possession of the Indenture Trustee regarding the related
Mortgage Loans and REO Property and the servicing thereof to the Noteholders,
the FDIC, and the supervisory agents and examiners of the FDIC, such access
being afforded only upon reasonable prior written request and during normal
business hours at the office of the Indenture Trustee; provided, however, that,
unless otherwise required by law, the Indenture Trustee shall not be required to
provide access to such records and documentation to the Noteholders if the
provision thereof would violate the legal right to privacy of any Mortgagor. The
Indenture Trustee shall allow representatives of the above entities to photocopy
any of the records and documentation and shall provide equipment for that
purpose at a charge that covers the Indenture Trustee's actual costs.
The Indenture Trustee shall execute and deliver to the Servicer or the
Master Servicer, as applicable based on the requesting party, any court
pleadings, requests for trustee's sale or other documents necessary or desirable
to (i) the foreclosure or trustee's sale with respect to a Mortgaged Property;
(ii) any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Security Instrument; (iii) obtain a deficiency judgment against
the Mortgagor; or (iv) enforce
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any other rights or remedies provided by the Mortgage Note or Security
Instrument or otherwise available at law or equity.
Section 3.02 [Reserved]
Section 3.03 MONITORING OF SERVICER. (a) The Master Servicer shall be
responsible for reporting to the Issuer, the Indenture Trustee and the Depositor
the compliance by the Servicer with its duties under the AHM Servicing
Agreement. In the review of the Servicer's activities, the Master Servicer may
rely upon an officer's certificate of the Servicer (or similar document signed
by an officer of the Servicer) with regard to such Servicer's compliance with
the terms of the AHM Servicing Agreement. In the event that the Master Servicer,
in its judgment, determines that the Servicer should be terminated in accordance
with the AHM Servicing Agreement, or that a notice should be sent pursuant to
the AHM Servicing Agreement with respect to the occurrence of an event that,
unless cured, would constitute grounds for such termination, the Master Servicer
shall notify the Depositor, the Issuer and the Indenture Trustee thereof and the
Master Servicer shall issue such notice or take such other action as it deems
appropriate.
(b) The Master Servicer, for the benefit of the Issuer, the Indenture
Trustee and the Noteholders, shall enforce the obligations of the Servicer under
the AHM Servicing Agreement, and shall, in the event that the Servicer fails to
perform its obligations in accordance with the AHM Servicing Agreement, subject
to the preceding paragraph, terminate the rights and obligations of the Servicer
thereunder and act as servicer of the related Mortgage Loans or to cause the
Issuer and the Indenture Trustee to enter in to a new Servicing Agreement with a
successor Servicer selected by the Master Servicer; provided, however, it is
understood and acknowledged by the parties hereto that there will be a period of
transition (not to exceed 90 days) before the actual servicing functions can be
fully transferred to such successor Servicer. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of the AHM
Servicing Agreement and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, provided that the Master Servicer shall not be
required to prosecute or defend any legal action except to the extent that the
Master Servicer shall have received reasonable indemnity for its costs and
expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of the Servicer, appointment of a successor Servicer
or the transfer and assumption of servicing by the Master Servicer with respect
to the AHM Servicing Agreement (including, without limitation, (i) all legal
costs and expenses and all due diligence costs and expenses associated with an
evaluation of the potential termination of the Servicer as a result of an event
of default by the Servicer and (ii) all costs and expenses associated with the
complete transfer of servicing, including all servicing files and all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
service to service the Mortgage Loans in accordance with the AHM Servicing
Agreement) are not fully and timely reimbursed by the terminated Servicer, the
Master Servicer shall be entitled to reimbursement of such costs and expenses
from the Master Servicer Collection Account.
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(d) The Master Servicer shall require the Servicer to comply with the
remittance requirements and other obligations set forth in the AHM Servicing
Agreement.
(e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces.
Section 3.04 FIDELITY BOND. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05 POWER TO ACT; PROCEDURES. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority to do any and
all things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the Issuer,
Noteholders and the Indenture Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the AHM Servicing Agreement, as applicable. The Indenture
Trustee shall furnish the Master Servicer, upon written request from a Servicing
Officer, with any powers of attorney 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 the AHM Servicing Agreement and this Agreement, and the Indenture Trustee
shall execute and deliver such other documents, as the Master Servicer may
request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Indenture Trustee shall have
no liability for use or 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, 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 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 Issuer or the Indenture Trustee, be deemed to be the agent of the Issuer or
the Indenture Trustee.
Section 3.06 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the extent
provided in the AHM Servicing Agreement, to the extent Mortgage Loans contain
enforceable due-on-sale clauses, the Master Servicer shall cause the Servicer to
enforce such clauses in accordance with the AHM
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Servicing Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
the AHM Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed,
the original Mortgagor may be released from liability in accordance with the AHM
Servicing Agreement.
Section 3.07 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Noteholders on the next Payment Date, the Servicer
will, if required under the AHM Servicing Agreement, promptly furnish to the
Indenture Trustee two copies of a certification substantially in the form of
Exhibit E hereto signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from
a Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Protected Account maintained by the Servicer pursuant to the
AHM Servicing Agreement have been so deposited) and shall request that the
Indenture Trustee deliver to the Servicer the related Mortgage File. Upon
receipt of such certification and request, 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 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 Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the AHM Servicing
Agreement, the Indenture Trustee shall execute such documents as shall be
prepared and furnished to the Indenture Trustee by the Servicer or the Master
Servicer (in form reasonably acceptable to the Indenture Trustee) and as are
necessary to the prosecution of any such proceedings. The Indenture Trustee
shall, upon the request of the Servicer or the Master Servicer, and delivery to
the Indenture Trustee, of two copies of a request for release signed by a
Servicing Officer substantially in the form of Exhibit E (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File held in
its possession or control to the Servicer or the Master Servicer, as applicable.
The Servicer or the Master Servicer shall be obligated to return the Mortgage
File to the Indenture Trustee when the need therefor by the Servicer or the
Master Servicer, as it reasonably determines, no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of a Servicing Officer similar to that hereinabove specified, the Mortgage File
shall be released by the Indenture Trustee to the Servicer or the Master
Servicer.
Section 3.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER TO BE HELD FOR ISSUER AND INDENTURE TRUSTEE.
(a) The Master Servicer shall transmit and the Servicer (to the extent
required by the AHM Servicing Agreement) shall transmit to the Indenture Trustee
such documents and instruments
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coming into the possession of the Master Servicer or the Servicer from time to
time as are required by the terms hereof, or in the case of the Servicer, the
AHM Servicing Agreement, to be delivered to the Indenture Trustee. 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 by the Servicer
as Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan
shall be held for the benefit of the Issuer and the Indenture Trustee subject to
the Master Servicer's right to retain or withdraw from the Master Servicer
Collection Account the Master Servicing Compensation and other amounts provided
in this Agreement, and to the right of the Servicer to retain its Servicing Fee
and other amounts as provided in the AHM Servicing Agreement. The Master
Servicer shall, and (to the extent provided in the AHM Servicing Agreement)
shall cause the Servicer to, provide access to information and documentation
regarding the Mortgage Loans to the Issuer, the Indenture Trustee, and 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, in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Issuer, the Indenture Trustee and the Noteholders and shall be and remain
the sole and exclusive property of the Issuer, subject to the pledge to the
Indenture Trustee; 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 or the AHM Servicing Agreement.
Section 3.09 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicer under the AHM Servicing Agreement to maintain or
cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the AHM
Servicing Agreement. It is understood and agreed that such insurance shall be
with insurers meeting the eligibility requirements set forth in the AHM
Servicing Agreement and that no earthquake or other additional insurance is to
be required of any Mortgagor or to be maintained on property acquired in respect
of a defaulted loan, other than pursuant to such applicable laws and regulations
as shall at any time be in force and as shall require such additional insurance.
(b) Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicer or the Master Servicer, under any insurance policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the AHM
Servicing Agreement) shall be deposited into the Master Servicer Collection
Account, subject to withdrawal pursuant to Section 4.02 and 4.03. Any cost
incurred by the Master Servicer
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or the Servicer in maintaining any such insurance if the Mortgagor defaults in
its obligation to do so shall be added to the amount owing under the Mortgage
Loan where the terms of the Mortgage Loan so permit; provided, however, that the
addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Noteholders and shall be recoverable
by the Master Servicer or such Servicer pursuant to Section 4.02 and 4.03.
Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Master Servicer shall (to the extent provided in the AHM Servicing Agreement)
cause the Servicer to prepare and present on behalf of the Issuer, the Indenture
Trustee and the Noteholders all claims under the Insurance Policies and take
such actions (including the negotiation, settlement, compromise or enforcement
of the insured's claim) as shall be necessary to realize recovery under such
policies. Any proceeds disbursed to the Master Servicer (or disbursed to the
Servicer and remitted to the Master Servicer) in respect of such policies, bonds
or contracts shall be promptly deposited in the Master Servicer Collection
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable Insurance Policy need not be so deposited (or
remitted).
Section 3.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
(a) The Master Servicer shall not take, or permit the Servicer (to the
extent such action is prohibited under the AHM Servicing Agreement) to take, any
action that would result in noncoverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of the Master Servicer
or the Servicer, would have been covered thereunder. The Master Servicer shall
use its best reasonable efforts to cause the Servicer (to the extent required
under the AHM Servicing Agreement) to keep in force and effect (to the extent
that the Mortgage Loan requires the Mortgagor to maintain such insurance),
primary mortgage insurance applicable to each Mortgage Loan in accordance with
the provisions of this Agreement and the AHM Servicing Agreement, as applicable.
The Master Servicer shall not, and shall not permit the Servicer (to the extent
required under the AHM Servicing Agreement) to, cancel or refuse to renew any
such Primary Mortgage Insurance Policy that is in effect at the date of the
initial issuance of the Mortgage Note and is required to be kept in force
hereunder except in accordance with the provisions of this Agreement and the AHM
Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause the Servicer (to
the extent required under the AHM Servicing Agreement) to present, on behalf of
the Issuer, the Indenture Trustee and the Noteholders, claims to the insurer
under any Primary Mortgage Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01 and 4.02, any amounts collected by the Master Servicer or the
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Master Servicer Collection Account, subject to withdrawal pursuant to Sections
4.02 and 4.03.
Section 3.12 INDENTURE TRUSTEE TO RETAIN POSSESSION OF CERTAIN
INSURANCE POLICIES AND DOCUMENTS.
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The Indenture Trustee shall retain possession and custody of the
originals (to the extent available) of any Primary Mortgage Insurance Policies,
or certificate of insurance if applicable, and any certificates of renewal as to
the foregoing as may be issued from time to time as contemplated by this
Agreement. Until all amounts distributable in respect of the Notes have been
distributed in full and the Indenture has been satisfied and discharged in
accordance with Section 4.10 of the Indenture, the Indenture Trustee shall also
retain possession and custody of each Mortgage File in accordance with and
subject to the terms and conditions of this Agreement. The Master Servicer shall
promptly deliver or cause to be delivered to the Indenture Trustee upon the
execution or receipt thereof the originals of any Primary Mortgage Insurance
Policies, any certificates of renewal, and such other documents or instruments
that constitute portions of the Mortgage File that come into the possession of
the Master Servicer from time to time.
Section 3.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS. The Master
Servicer shall cause the Servicer (to the extent required under the AHM
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the AHM Servicing Agreement.
Section 3.14 COMPENSATION FOR THE MASTER SERVICER.
On each Payment Date the Master Servicer shall be paid the Master
Servicing Fee. In addition, on each Payment Date the Master Servicer will be
entitled to all income and gain realized from any investment of funds in the
Master Servicer Collection Account, pursuant to Article IV, for the performance
of its activities hereunder (the "Additional Master Servicer Compensation").
Servicing compensation in the form of assumption fees, if any, late payment
charges, as collected, if any, or otherwise (but not including any prepayment
premium or penalty) shall be retained by the applicable Servicer and shall not
be deposited in the Protected Account. The Master Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder and
shall not be entitled to reimbursement therefor except as provided in this
Agreement.
Section 3.15 REO PROPERTY.
(a) In the event the Trust Estate acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Indenture Trustee, or to its nominee, on behalf of
the Noteholders. The Master Servicer shall, to the extent provided in the AHM
Servicing Agreement, cause the Servicer to sell any REO Property as
expeditiously as possible and in accordance with the provisions of the AHM
Servicing Agreement, as applicable. Pursuant to its efforts to sell such REO
Property, the Master Servicer shall cause the the Servicer to protect and
conserve, such REO Property in the manner and to the extent required by the AHM
Servicing Agreement.
(b) The Master Servicer shall, to the extent required by the AHM
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.
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(c) The Master Servicer and the Servicer, upon the final disposition of
any REO Property, shall be entitled to reimbursement for any related
unreimbursed Monthly Advances and other unreimbursed advances as well as any
unpaid Servicing Fees and Master Servicing Fees from Liquidation Proceeds
received in connection with the final disposition of such REO Property;
provided, that any such unreimbursed Monthly Advances as well as any unpaid
Servicing Fees may be reimbursed or paid, as the case may be, prior to final
disposition, out of any net rental income or other net amounts derived from such
REO Property.
(d) To the extent provided in the AHM Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the Servicer as provided above shall be
deposited in the Protected Account on or prior to the Determination Date in the
month following receipt thereof and be remitted by wire transfer in immediately
available funds to the Master Servicer for deposit into the related Master
Servicer Collection Account on the next succeeding Servicer Remittance Date.
Section 3.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
(a) The Master Servicer shall deliver to the Issuer, the Indenture
Trustee and the Rating Agency on or before March 1 of each year, commencing on
March 1, 2004, an Officer's Certificate, certifying that with respect to the
period ending December 31 of the prior year: (i) such Servicing Officer has
reviewed the activities of such Master Servicer during the preceding calendar
year or portion thereof and its performance under this Agreement, (ii) to the
best of such Servicing Officer's knowledge, based on such review, such Master
Servicer has performed and fulfilled its duties, responsibilities and
obligations under this Agreement in all material respects throughout such year,
or, if there has been a default in the fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof, (iii) nothing has come to
the attention of such Servicing Officer to lead such Servicing Officer to
believe that the Servicer has failed to perform any of its duties,
responsibilities and obligations under the AHM Servicing Agreement in all
material respects throughout such year, or, if there has been a material default
in the performance or fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof.
(b) Copies of such statements shall be provided to any 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 shall be unaware of the Master
Servicer's failure to provide such statement).
Section 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Issuer, the Indenture Trustee, the Rating Agency and
the Depositor on or before March 1 of each year, commencing on March 1, 2004 to
the effect that, with respect to the most recently ended fiscal year, such firm
has examined certain records and documents relating to the Master Servicer's
performance of its servicing obligations under this Agreement and pooling and
servicing and trust agreements in material respects similar to this
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Agreement and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
▇▇▇▇▇▇▇ Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by ▇▇▇▇▇▇▇ Mac
requires it to report. Copies of such statements shall be provided to any
Noteholder upon request by the Master Servicer, or by the Indenture Trustee at
the expense of the Master Servicer if the Master Servicer shall fail to provide
such copies. If such report discloses exceptions that are material, the Master
Servicer shall advise the Indenture Trustee whether such exceptions have been or
are susceptible of cure, and will take prompt action to do so.
Section 3.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.
Within 15 days after each Payment Date, the Securities Administrator shall, in
accordance with industry standards, file with the Commission via the Electronic
Data Gathering and Retrieval System ("▇▇▇▇▇"), a Form 8-K with a copy of the
statement to the Noteholders for such Payment Date as an exhibit thereto. Prior
to January 30 in any year, the Securities Administrator shall, in accordance
with industry standards and only if instructed by the Depositor, file a Form 15
Suspension Notice with respect to the Trust Estate, if applicable. Prior to (i)
March 15, 2004 and (ii) unless and until a Form 15 Suspension Notice shall have
been filed, prior to March 15 of each year thereafter, the Master Servicer shall
provide the Securities Administrator with a Master Servicer Certification,
together with a copy of the annual independent accountant's servicing report and
annual statement of compliance of the Servicer, in each case, required to be
delivered pursuant to the AHM Servicing Agreement, and, if applicable, the
annual independent accountant's servicing report and annual statement of
compliance to be delivered by the Master Servicer pursuant to Sections 3.16 and
3.17. Prior to (i) March 31, 2004, or such earlier filing date as may be
required by the Commission, and (ii) unless and until a Form 15 Suspension
Notice shall have been filed, March 31 of each year thereafter, or such earlier
filing date as may be required by the Commission, the Securities Administrator
shall file a Form 10-K, in substance conforming to industry standards, with
respect to the Trust. Such Form 10-K shall include the Master Servicer
Certification and other documentation provided by the Master Servicer pursuant
to the second preceding sentence. The Depositor hereby grants to the Securities
Administrator a limited power of attorney to execute and file each such document
on behalf of the Depositor. Such power of attorney shall continue until either
the earlier of (i) receipt by the Securities Administrator from the Depositor of
written termination of such power of attorney and (ii) the termination of the
Trust Estate. The Depositor agrees to promptly furnish to the Securities
Administrator, from time to time upon request, such further information, reports
and financial statements within its control related to this Agreement and the
Mortgage Loans as the Securities Administrator reasonably deems appropriate to
prepare and file all necessary reports with the Commission. The Securities
Administrator shall have no responsibility to file any items other than those
specified in this Section 3.18; provided, however, the Securities Administrator
will cooperate with the Depositor and the Issuer in connection with any
additional filings with respect to the Trust Estate as the Depositor deems
necessary under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Fees and expenses incurred by the Securities Administrator in connection
with this Section 3.18 shall not be reimbursable from the Trust Estate.
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Section 3.19 THE COMPANY. On the Closing Date, the Company will receive
from the Depositor a payment of $5,000.
Section 3.20 UCC. The Depositor shall inform the Indenture Trustee in
writing of any Uniform Commercial Code financing statements that were filed on
the Closing Date in connection with the Trust Estate with stamped recorded
copies of such financing statements to be delivered to the Indenture Trustee
promptly upon receipt by the Depositor. If directed by the Depositor in writing,
the Indenture Trustee will execute any continuation statements and deliver them
as directed solely at the expense of the Depositor. The Depositor shall file any
financing statements or amendments thereto required by any change in the Uniform
Commercial Code.
Section 3.21 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.
(a) With respect to any Mortgage Loan which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, the Company shall have the right to purchase such Mortgage Loan from
the Trust Estate at a price equal to the Repurchase Price; provided however (i)
that such Mortgage Loan is still 90 days or more delinquent or is an REO
Property as of the date of such purchase and (ii) this purchase option, if not
theretofore exercised, shall terminate on the date prior to the last day of the
related Calendar Quarter. This purchase option, if not exercised, shall not be
thereafter reinstated unless the delinquency is cured and the Mortgage Loan
thereafter again becomes 90 days or more delinquent or becomes an REO Property,
in which case the option shall again become exercisable as of the first day of
the related Calendar Quarter.
(b) If at any time the Company remits to the Master Servicer a payment
for deposit in the Master Servicer Collection Account covering the amount of the
Repurchase Price for such a Mortgage Loan, and the Master Servicer provides to
the Indenture Trustee a certification signed by a Servicing Officer stating that
the amount of such payment has been deposited in the Master Servicer Collection
Account, then the Indenture Trustee shall execute the assignment of such
Mortgage Loan to the Company at the request of the Company without recourse,
representation or warranty and the Company shall succeed to all of the Indenture
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Company will thereupon own such Mortgage, and
all such security and documents, free of any further obligation to the Issuer,
the Indenture Trustee or the Noteholders with respect thereto.
Section 3.22 MONTHLY ADVANCES. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date is delinquent other than as a result of
application of the Relief Act and for which the Servicer was required to make an
advance pursuant to the AHM Servicing Agreement exceeds the amount deposited in
the Master Servicer Collection Account which will be used for an advance with
respect to such Mortgage Loan, the Master Servicer will deposit in the Master
Servicer Collection Account not later than the Payment Account Deposit Date
immediately preceding the related Payment Date an amount equal to such
deficiency, net of the Servicing Fee and the Master Servicing Fee for such
Mortgage Loan except to the extent the Master Servicer determines any such
advance to be a Nonrecoverable Advance. Subject to the foregoing, the Master
Servicer shall
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continue to make such advances through the date that the Servicer is required to
do so under the AHM Servicing Agreement. If the Master Servicer deems an advance
to be a Nonrecoverable Advance, on the Payment Account Deposit Date, the Master
Servicer shall present an Officer's Certificate to the Indenture Trustee (i)
stating that the Master Servicer elects not to make a Monthly Advance in a
stated amount and (ii) detailing the reason it deems the advance to be a
Nonrecoverable Advance.
Section 3.23 COMPENSATING INTEREST PAYMENTS. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each Payment
Account Deposit Date an amount equal to the lesser of (i) the sum of the
aggregate amounts required to be paid by the Servicer under the AHM Servicing
Agreement with respect to subclauses (a) and (b) of the definition of Interest
Shortfalls with respect to the Mortgage Loans for the related Prepayment Period,
and not so paid by the Servicer and (ii) the Aggregate Master Servicer
Compensation for such Payment Date (such amount, the "Compensating Interest
Payment"). The Master Servicer shall not be entitled to any reimbursement of any
Compensating Interest Payment.
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ARTICLE IV
Accounts
Section 4.01 PROTECTED ACCOUNTS. (a) The Master Servicer shall enforce
the obligation of the Servicer to establish and maintain a Protected Account in
accordance with the AHM Servicing Agreement, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which account
shall be deposited within 48 hours (or as of such other time specified in the
AHM Servicing Agreement) of receipt, all collections of principal and interest
on any Mortgage Loan and any REO Property received by the Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances
made from the Servicer's own funds (less servicing compensation as permitted by
the AHM Servicing Agreement in the case of the Servicer) and all other amounts
to be deposited in the Protected Account. The Servicer is hereby authorized to
make withdrawals from and deposits to the Protected Account for purposes
required or permitted by this Agreement. To the extent provided in the AHM
Servicing Agreement, the Protected Account shall be held by a Designated
Depository Institution and segregated on the books of such institution in the
name of the Indenture Trustee for the benefit of the Noteholders.
(b) To the extent provided in the AHM Servicing Agreement, amounts on
deposit in the Protected Account may be invested in Permitted Investments in the
name of the Indenture Trustee for the benefit of Noteholders and, except as
provided in the preceding paragraph, not commingled with any other funds. Such
Permitted Investments shall mature, or shall be subject to redemption or
withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the Master Servicer Collection Account, and shall be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the Servicer
under the AHM Servicing Agreement, and the risk of loss of moneys required to be
distributed to the Noteholders resulting from such investments shall be borne by
and be the risk of the Servicer. The Servicer (to the extent provided in the AHM
Servicing Agreement) shall deposit the amount of any such loss in the Protected
Account within two Business Days of receipt of notification of such loss but not
later than the second Business Day prior to the Payment Date on which the moneys
so invested are required to be distributed to the Noteholders.
(c) To the extent provided in the AHM Servicing Agreement and subject
to this Article IV, on or before the Servicer Remittance Date, the Servicer
shall withdraw or shall cause to be withdrawn from its Protected Account and
shall immediately deposit or cause to be deposited in the Master Servicer
Collection Account amounts representing the following collections and payments
(other than with respect to principal of or interest on the Mortgage Loans due
on or before the Cut- off Date):
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the Servicer pursuant to the AHM Servicing
Agreement which were due on or before the related Due Date, net of the amount
thereof comprising the Servicing Fee or any fees with respect to any lender-paid
primary mortgage insurance policy;
(ii) Principal Prepayments in full and any Liquidation
Proceeds received by the Servicer with respect to the Mortgage Loans in the
related Prepayment Period, with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the Servicing Fee;
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(iii) Principal Prepayments in part received by the Servicer
for the Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals may be made from the Protected Account only to make
remittances as provided in Section 4.01(c), 4.02 and 4.03; to reimburse the
Master Servicer or the Servicer for Monthly Advances which have been recovered
by subsequent collections from the related Mortgagor; to remove amounts
deposited in error; to remove fees, charges or other such amounts deposited on a
temporary basis; or to clear and terminate the account at the termination of
this Agreement in accordance with Section 7.10. As provided in Sections 4.01(a)
and 4.02(b) certain amounts otherwise due to the Servicer may be retained by it
and need not be deposited in the Master Servicer Collection Account.
Section 4.02 MASTER SERVICER COLLECTION ACCOUNT. (a) The Master
Servicer shall establish and maintain in the name of the Indenture Trustee, for
the benefit of the Noteholders, the Master Servicer Collection Account as a
segregated trust account or accounts. The Master Servicer Collection Account
shall be an Eligible Account. The Master Servicer will deposit in the Master
Servicer Collection Account as identified by the Master Servicer and as received
by the Master Servicer, the following amounts:
(i) Any amounts withdrawn from the Protected Account;
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds
received by or on behalf of the Master Servicer or which were not deposited in
the Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans
purchased by the Seller pursuant to the Mortgage Loan Purchase Agreement or
Sections 2.02 or 2.03 hereof, any amounts which are to be treated pursuant to
Section 2.04 of this Agreement as the payment of a Repurchase Price in
connection with the tender of a Substitute Mortgage Loan by the Seller and the
Repurchase Price with respect to any Mortgage Loans purchased by the Company
pursuant to Section 3.21;
(v) Any amounts required to be deposited with respect to
losses on investments of deposits in the Master Servicer Collection Account or
Payment Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer and required to be deposited in the Master Servicer Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account
shall be held by the Master Servicer in the name of the Indenture Trustee in
trust for the benefit of the Noteholders in accordance with the terms and
provisions of this Agreement and the Indenture. The requirements for crediting
the Master Servicer Collection Account or the Payment Account shall be
exclusive, it being
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understood and agreed that, without limiting the generality of the foregoing,
payments in the nature of (i) prepayment or late payment charges or assumption,
tax service, statement account or payoff, substitution, satisfaction, release
and other like fees and charges and (ii) the items enumerated in Subsections
4.05(a)(i), (ii), (iii), (iv), (vi), (vii), (viii), (ix), (x), (xi) and (xii),
need not be credited by the Master Servicer or the Servicer to the Master
Servicer Collection Account or remitted by the Master Servicer or Servicer to
the Indenture Trustee for deposit in the Payment Account, as applicable. In the
event that the Master Servicer shall remit or cause to be remitted to the
Indenture Trustee for deposit to the Payment Account any amount not required to
be credited thereto, the Indenture Trustee, upon receipt of a written request
therefor signed by a Servicing Officer of the Master Servicer, shall promptly
transfer such amount to the Master Servicer, any provision herein to the
contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection
Account may be invested, in the name of the Indenture Trustee, or its nominee,
for the benefit of the Noteholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Payment Account Deposit Date. Any and all investment earnings on
amounts on deposit in the Master Servicer Account from time to time shall be for
the account of the Master Servicer. The Master Servicer from time to time shall
be permitted to withdraw or receive distribution of any and all investment
earnings from the Master Servicer Account. The risk of loss of moneys required
to be distributed to the Noteholders resulting from such investments shall be
borne by and be the risk of the Master Servicer. The Master Servicer shall
deposit the amount of any such loss in the Master Servicer Collection Account
within two Business Days of receipt of notification of such loss but not later
than the second Business Day prior to the Payment Date on which the moneys so
invested are required to be distributed to the Noteholders.
Section 4.03 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER
SERVICER COLLECTION ACCOUNT. (a) The Master Servicer will, from time to time on
demand of the Servicer or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the AHM Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 7.10 and
remove amounts from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (i) any expenses, costs and liabilities
recoverable by the Master Servicer or the Securities Administrator pursuant to
Sections 3.03 and 5.04 hereof and Section 6.07 of the Indenture and (ii) any
amounts payable to the Master Servicer as set forth in Section 3.14; provided
however, that the Master Servicer shall be obligated to pay from its own funds
any amounts which it is required to pay under Section 5.03(a).
(c) In addition, on or before each Payment Account Deposit Date, the
Master Servicer shall deposit in the Payment Account any Monthly Advances
required to be made by the Master Servicer with respect to the Mortgage Loans.
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(d) No later than 3:00 p.m. New York time on each Payment Account
Deposit Date, the Securities Administrator will transfer all Available Funds on
deposit in the Master Servicer Collection Account with respect to the related
Payment Date to the Indenture Trustee for deposit in the Payment Account.
Section 4.04 PAYMENT ACCOUNT. (a) The Indenture Trustee shall establish
and maintain in the name of the Indenture Trustee, for the benefit of the
Noteholders, the Payment Account as a segregated trust account or accounts.
(b) All amounts deposited to the Payment Account shall be held by the
Indenture Trustee in the name of the Indenture Trustee in trust for the benefit
of the Noteholders in accordance with the terms and provisions of this
Agreement.
(c) The Payment Account shall constitute a non-interest bearing trust
account of the Trust Estate segregated on the books of the Indenture Trustee and
held by the Indenture Trustee in trust, and the Payment Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Indenture
Trustee (whether made directly, or indirectly through a liquidator or receiver
of the Indenture Trustee). The Payment Account shall be an Eligible Account. The
amount at any time credited to the Payment Account shall be held in cash and
fully insured by the FDIC to the maximum coverage provided thereby. All amounts
on deposit in the Payment Account shall be uninvested and any benefit from funds
uninvested therein from time to time shall be for the account of the Indenture
Trustee.
(d) The Indenture Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Indenture Trustee's
economic self-interest for (i) servicing as investment advisor, administrator,
shareholder, servicing agent, custodian or sub- custodian with respect to
certain of the Permitted Investments, (ii) using Affiliates to effect
transactions in certain Permitted Investments and (iii) effecting transactions
in certain Permitted Investments. Such compensation shall not be considered an
amount that is reimbursable or payable pursuant to Section 4.05.
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Section 4.05 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE PAYMENT
ACCOUNT. (a) The Indenture Trustee will, from time to time on demand of the
Master Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Payment Account as the Master Servicer has
designated for such transfer or withdrawal pursuant to this Agreement and the
AHM Servicing Agreement or as the Securities Administrator has instructed
hereunder for the following purposes (limited in the case of amounts due the
Master Servicer to those not withdrawn from the Master Servicer Collection
Account as certified by the Securities Administrator in accordance with the
terms of this Agreement but not in any order of priority):
(i) to reimburse the Master Servicer or the Servicer for any
Monthly Advance of its own funds, the right of the Master Servicer or the
Servicer to reimbursement pursuant to this subclause (i) being limited to
amounts received on a particular Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which
represent late payments or recoveries of the principal of or interest on such
Mortgage Loan respecting which such Monthly Advance was made;
(ii) to reimburse the Master Servicer or the Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular Mortgage
Loan for amounts expended by the Master Servicer or such Servicer in good faith
in connection with the restoration of the related Mortgaged Property which was
damaged by an Uninsured Cause or in connection with the liquidation of such
Mortgage Loan;
(iii) to reimburse the Master Servicer or the Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master Servicer
or the Servicer from Liquidation Proceeds from a particular Mortgage Loan for
Liquidation Expenses incurred with respect to such Mortgage Loan; provided that
the Master Servicer shall not be entitled to reimbursement for Liquidation
Expenses with respect to a Mortgage Loan to the extent that (i) any amounts with
respect to such Mortgage Loan were paid as Excess Liquidation Proceeds pursuant
to clause (viii) of this Subsection 4.05 (a) to the Master Servicer; and (ii)
such Liquidation Expenses were not included in the computation of such Excess
Liquidation Proceeds;
(iv) to reimburse the Master Servicer or the Servicer for
advances of funds (other than Monthly Advances) made with respect to the
Mortgage Loans, and the right to reimbursement pursuant to this subclause being
limited to amounts received on the related Mortgage Loan (including, for this
purpose, the Repurchase Price therefor, Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries of the payments for which such
advances were made;
(v) to reimburse the Master Servicer or the Servicer for any
Monthly Advance or advance, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Monthly Advance or advance has not
been reimbursed pursuant to clauses (i) and (iv);
(vi) to pay the Master Servicer as set forth in Section 3.14;
(vii) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections 3.03,
5.04(c) and (d), to the extent that the Master
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Servicer has not already reimbursed itself for such amounts from the Master
Servicer Collection Account;
(viii) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by the
Servicer;
(ix) to reimburse or pay the Servicer any such amounts as are
due thereto under the AHM Servicing Agreement and have not been retained by or
paid to the Servicer, to the extent provided in the AHM Servicing Agreement;
(x) to reimburse the Indenture Trustee, the Owner Trustee and
the Securities Administrator for expenses, costs and liabilities incurred by or
reimbursable to it pursuant to this Agreement, the Indenture and the Trust
Agreement, to the extent such amounts have not already been reimbursed to such
party from the Master Servicer Collection Account;
(xi) to remove amounts deposited in error; and
(xii) to clear and terminate the Payment Account pursuant to
Section 7.10.
(b) The Master Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Payment Account pursuant to subclauses (i) through (iv)
or with respect to any such amounts which would have been covered by such
subclauses had the amounts not been retained by the Master Servicer without
being deposited in the Payment Account under Section 4.02(b).
(c) On each Payment Date, pursuant to Section 3.05 of the Indenture,
the Indenture Trustee shall distribute the Available Funds to the extent on
deposit in the Payment Account to the Holders of the Notes, in accordance with
payment instructions provided to it by the Securities Administrator no later
than two Business Days prior to such Payment Date, and determined by the
Securities Administrator in accordance with Section 3.03 of the Indenture.
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ARTICLE V
The Master Servicer
Section 5.01 LIABILITIES OF THE MASTER SERVICER. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 5.02 MERGER OR CONSOLIDATION OF THE MASTER SERVICER.
(a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Notes or any of the Mortgage Loans and to perform its duties under this
Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 5.03 INDEMNIFICATION OF THE INDENTURE TRUSTEE, OWNER TRUSTEE,
THE MASTER SERVICER AND THE SECURITIES ADMINISTRATOR. (a) The Master Servicer
agrees to indemnify the Indenture Trustee, Owner Trustee and Securities
Administrator (each an "Indemnified Person") for, and to hold them harmless
against, any loss, liability or expense (including reasonable legal fees and
disbursements of counsel) incurred on their part that may be sustained in
connection with, arising out of, or relating to, any claim or legal action
(including any pending or threatened claim or legal action) relating to this
Agreement, the Indenture, the AHM Servicing Agreement, the Assignment Agreement
or the Notes or the powers of attorney delivered by the Indenture Trustee
hereunder (i) related to the Master Servicer's failure to perform its duties in
compliance with this Agreement (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) or (ii) incurred by
reason of the Master Servicer's willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder, provided, in each case, that with
respect to any such claim or legal action (or pending or threatened claim or
legal action), the Indemnified Person shall have given the Master Servicer and
the Depositor written notice thereof promptly after such Indemnified Person
shall have with respect to such claim or legal action knowledge thereof. The
Master Servicer's failure to receive any such notice shall not affect an
Indemnified Persons' right to indemnification hereunder, except to the extent
the Master Servicer is materially prejudiced by such failure to give notice.
This indemnity shall survive the resignation or removal of the Indenture
Trustee, Owner Trustee, Master Servicer and the Securities Administrator and the
termination of this Agreement.
(b) The Depositor (or the Seller, in the case of the Owner Trustee)
will indemnify any Indemnified Person for any loss, liability or expense of any
Indemnified Person not otherwise covered by the Master Servicer's
indemnification pursuant to Subsection (a) above.
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Section 5.04 LIMITATIONS ON LIABILITY OF THE MASTER SERVICER AND
OTHERS. Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 5.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Trust Estate or the Noteholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer and any director, officer, employee or agent of
the Master Servicer shall be indemnified by the Trust Estate and held harmless
thereby against any loss, liability or expense (including reasonable legal fees
and disbursements of counsel) incurred on their part that may be sustained in
connection with, arising out of, or related to, any claim or legal action
(including any pending or threatened claim or legal action) relating to this
Agreement, the Indenture, the Notes or the AHM Servicing Agreement (except to
the extent that the Master Servicer is indemnified by the Servicer thereunder),
other than (i) any such loss, liability or expense related to the Master
Servicer's failure to perform its duties in compliance with this Agreement
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement), or (ii) any such loss, liability or expense
incurred by reason of the Master Servicer's willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to this Agreement or the Indenture and the rights and duties of the parties
hereto and the interests of the Noteholders hereunder and thereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Estate, and the
Master Servicer shall be entitled to be reimbursed therefor out of the Master
Servicer Collection Account as provided by Section 4.03. Nothing in this
Subsection 5.04(d) shall affect the Master Servicer's obligation to supervise,
or to take such actions as are necessary to ensure, the servicing and
administration of the Mortgage Loans pursuant to Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust Estate might incur as a result
of such course of action by reason of the condition of the Mortgaged Properties
but shall give notice to the Indenture Trustee if it has notice of such
potential liabilities.
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(f) The Master Servicer shall not be liable for any acts or omissions
of the Servicer, except as otherwise expressly provided herein.
Section 5.05 MASTER SERVICER NOT TO RESIGN. Except as provided in
Section 5.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
addressed to the Indenture Trustee and the Issuer to such effect delivered to
the Indenture Trustee and the Issuer. No such resignation by the Master Servicer
shall become effective until the Company or the Indenture Trustee or a successor
to the Master Servicer reasonably satisfactory to the Indenture Trustee shall
have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 6.02 hereof. The Indenture Trustee shall notify the
Rating Agency of the resignation of the Master Servicer.
Section 5.06 SUCCESSOR MASTER SERVICER. In connection with the
appointment of any successor master servicer or the assumption of the duties of
the Master Servicer, the Company or the Indenture Trustee may make such
arrangements for the compensation of such successor master servicer out of
payments on the Mortgage Loans as the Company or the Indenture Trustee and such
successor master servicer shall agree. If the successor master servicer does not
agree that such market value is a fair price, such successor master servicer
shall obtain two quotations of market value from third parties actively engaged
in the servicing of single-family mortgage loans. Notwithstanding the foregoing,
the compensation payable to a successor master servicer may not exceed the
compensation which the Master Servicer would have been entitled to retain if the
Master Servicer had continued to act as Master Servicer hereunder.
Section 5.07 SALE AND ASSIGNMENT OF MASTER SERVICING. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in its entirety as Master Servicer under this Agreement and the Company may
terminate the Master Servicer without cause and select a new Master Servicer;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation (a) shall be a Person which shall be qualified (or
have an Affiliate that is qualified) to service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac; (b) shall have a net worth of not less than $10,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (c)
shall be reasonably satisfactory to the Indenture Trustee (as evidenced in a
writing signed by the Indenture Trustee); and (d) shall execute and deliver to
the Indenture Trustee an agreement, in form and substance reasonably
satisfactory to the Issuer and the Indenture Trustee, which contains an
assumption by such Person of the due and punctual performance and observance of
each covenant and condition to be performed or observed by it as master servicer
under this Agreement; (ii) the Rating Agency shall be given prior written notice
of the identity of the proposed successor to the Master Servicer and the Rating
Agency's rating of the Notes in effect immediately prior to such assignment,
sale and delegation will not be downgraded, qualified or withdrawn as a result
of such assignment, sale and delegation, as evidenced by a letter to such effect
delivered to the Master Servicer, the Issuer and the Indenture Trustee; (iii)
the Master Servicer assigning and selling the master servicing shall deliver to
the Issuer and the Indenture Trustee an Officer's Certificate and an Opinion of
Counsel addressed to the Issuer and the Indenture Trustee, each stating that all
conditions precedent to such action under this Agreement have been completed and
such action is permitted by
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and complies with the terms of this Agreement; and (iv) in the event the Master
Servicer is terminated without cause by the Company, the Company shall pay the
terminated Master Servicer a termination fee equal to 0.25% of the aggregate
Scheduled Principal Balance of the Mortgage Loans at the time the master
servicing of the Mortgage Loans is transferred to the successor Master Servicer.
No such assignment or delegation shall affect any liability of the Master
Servicer arising prior to the effective date thereof.
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ARTICLE VI
Default
Section 6.01 MASTER SERVICER EVENTS OF DEFAULT. "Master Servicer Event
of Default," wherever used herein, means any one of the following events
(whatever the reason for such Master Servicer Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) and only with respect to the
defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Payment Account any amount so required to be deposited pursuant to this
Agreement (other than a Monthly Advance), and such failure continues unremedied
for a period of three Business Days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any
material respect any other material covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements materially
affect the rights of Noteholders, and such failure continues unremedied for a
period of 60 days after the date on which written notice of such failure,
properly requiring the same to be remedied, shall have been given to the Master
Servicer by the Indenture Trustee or to the Master Servicer and the Indenture
Trustee by the Holders of Notes aggregating at least 25% of the Note Principal
Balance of the Notes; or
(iii) There is entered against the Master Servicer a decree or
order by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order is unstayed and in effect for a
period of 60 consecutive days, or an involuntary case is commenced against the
Master Servicer under any applicable insolvency or reorganization statute and
the petition is not dismissed within 60 days after the commencement of the case;
or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Master Servicer or substantially all of its property; or the Master Servicer
admits in writing its inability to pay its debts generally as they become due,
files a petition to take advantage of any applicable insolvency or
reorganization statute, makes an assignment for the benefit of its creditors, or
voluntarily suspends payment of its obligations;
(v) The Master Servicer assigns or delegates its duties or
rights under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 5.05 or 5.07; or
(vi) The Master Servicer fails to deposit, or cause to be
deposited, in the Payment Account any Monthly Advance (other than a
Nonrecoverable Advance) by 5:00 p.m. New York City time on the Payment Account
Deposit Date.
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In each and every such case, so long as such Master Servicer Event of Default
with respect to the Master Servicer shall not have been remedied, either the
Indenture Trustee or the Holders of Notes aggregating at least 51% of the Note
Principal Balance of the Notes, by notice in writing to the Master Servicer (and
to the Indenture Trustee if given by such Noteholders), with a copy to the
Rating Agency, and with the consent of the Company, may terminate all of the
rights and obligations (but not the liabilities) of the Master Servicer under
this Agreement and in and to the Mortgage Loans and/or the REO Property serviced
by the Master Servicer and the proceeds thereof. Upon the receipt by the Master
Servicer of the written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Notes, the Mortgage Loans, REO
Property or under any other related agreements (but only to the extent that such
other agreements relate to the Mortgage Loans or related REO Property) shall,
subject to Section 6.02, automatically and without further action pass to and be
vested in the Indenture Trustee pursuant to this Section 6.01; and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer as attorney-in-fact or otherwise, any
and all documents and other instruments and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Indenture Trustee in effecting the termination of
the Master Servicer's rights and obligations hereunder, including, without
limitation, the transfer to the Indenture Trustee of (i) the property and
amounts which are then or should be part of the Trust Estate or which thereafter
become part of the Trust Estate; and (ii) originals or copies of all documents
of the Master Servicer reasonably requested by the Indenture Trustee to enable
it to assume the Master Servicer's duties thereunder. In addition to any other
amounts which are then, or, notwithstanding the termination of its activities
under this Agreement, may become payable to the Master Servicer under this
Agreement, the Master Servicer shall be entitled to receive, out of any amount
received on account of a Mortgage Loan or related REO Property, that portion of
such payments which it would have received as reimbursement under this Agreement
if notice of termination had not been given. The termination of the rights and
obligations of the Master Servicer shall not affect any obligations incurred by
the Master Servicer prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 6.01 shall occur of which a Responsible Officer of
the Indenture Trustee has received written notice or has actual knowledge, the
Indenture Trustee shall, by notice in writing to the Master Servicer, which may
be delivered by telecopy, immediately terminate all of the rights and
obligations of the Master Servicer thereafter arising under this Agreement, but
without prejudice to any rights it may have as a Noteholder or to reimbursement
of Monthly Advances and other advances of its own funds, and the Indenture
Trustee shall thereupon become the successor Master Servicer as provided in
Section 6.02 and carry out the duties of the Master Servicer, including the
obligation to make any Monthly Advance the nonpayment of which was an Event of
Default described in clause (vi) of this Section 6.01. Any such action taken by
the Indenture Trustee must be prior to the distribution on the relevant Payment
Date.
Section 6.02 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a)
Upon the receipt by the Master Servicer of a notice of termination pursuant to
Section 6.01 or an Opinion of Counsel pursuant to Section 5.05 to the effect
that the Master Servicer is legally unable to act or to delegate
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its duties to a Person which is legally able to act, the Indenture Trustee shall
automatically become the successor in all respects to the Master Servicer in its
capacity under this Agreement and the transactions set forth or provided for
herein and shall thereafter be subject to all the responsibilities, duties,
liabilities and limitations on liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof; provided, however, that the Seller
shall have the right to either (a) immediately assume the duties of the Master
Servicer or (b) select a successor Master Servicer; provided further, however,
that the Indenture Trustee shall have no obligation whatsoever with respect to
any liability (including advances deemed recoverable and not previously made
with respect to the relevant Payment Date giving rise to the Master Servicer
Event of Default which shall be made by such successor Master Servicer )
incurred by the Master Servicer at or prior to the time of termination. As
compensation therefor, but subject to Section 5.06, the Indenture Trustee shall
be entitled to compensation which the Master Servicer would have been entitled
to retain if the Master Servicer had continued to act hereunder, except for
those amounts due the Master Servicer as reimbursement permitted under this
Agreement for advances previously made or expenses previously incurred.
Notwithstanding the above, the Indenture Trustee may, if it shall be unwilling
so to act, or shall, if it is legally unable so to act, appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution which is a ▇▇▇▇▇▇ ▇▇▇- or ▇▇▇▇▇▇▇ Mac- approved servicer,
and with respect to a successor to the Master Servicer only, having a net worth
of not less than $10,000,000, as the successor to the Master Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Master Servicer hereunder; provided, that the Indenture
Trustee shall obtain a letter from the Rating Agency that the ratings, if any,
on each of the Notes will not be lowered as a result of the selection of the
successor to the Master Servicer. Pending appointment of a successor to the
Master Servicer hereunder, the Indenture Trustee shall be the successor and act
in such capacity as hereinabove provided. 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 the provisions of Section
5.06 shall apply, the compensation shall not be in excess of that which the
Master Servicer would have been entitled to if the Master Servicer had continued
to act hereunder, and that such successor shall undertake and assume the
obligations of the Master Servicer to pay compensation to any third Person
acting as an agent or independent contractor in the performance of master
servicing responsibilities hereunder. The Indenture Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) If the Indenture Trustee shall succeed to any duties of the Master
Servicer respecting the Mortgage Loans as provided herein, it shall do so in a
separate capacity and not in its capacity as Indenture Trustee and, accordingly,
the provisions of Article VI of the Indenture shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Master Servicer in the
servicing of the Mortgage Loans (although such provisions shall continue to
apply to the Indenture Trustee in its capacity as Indenture Trustee); the
provisions of Article V, however, shall apply to it in its capacity as successor
master servicer.
Section 6.03 NOTIFICATION TO NOTEHOLDERS. Upon any termination or
appointment of a successor to the Master Servicer, the Indenture Trustee shall
give prompt written notice thereof to Noteholders at their respective addresses
appearing in the Note Register and to the Rating Agency.
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Section 6.04 WAIVER OF DEFAULTS. The Indenture Trustee shall transmit
by mail to all Noteholders, within 60 days after the occurrence of any Master
Servicer Event of Default of which a Responsible Officer of the Indenture
Trustee received written notice or has actual knowledge, unless such Master
Servicer Event of Default shall have been cured, notice of each such Master
Servicer Event of Default. The Holders of Notes aggregating at least 51% of the
Note Principal Balance of the Notes may, on behalf of all Noteholders, waive any
default by the Master Servicer in the performance of its obligations hereunder
and the consequences thereof, except a default in the making of or the causing
to be made any required distribution on the Notes, which default may only be
waived by Holders of Notes aggregating 100% of the Note Principal Balance of the
Notes. Upon any such waiver of a past default, such default shall be deemed to
cease to exist, and any Master Servicer Event of Default arising therefrom shall
be deemed to have been timely remedied for every purpose of this Agreement. No
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived. The Indenture
Trustee shall give notice of any such waiver to the Rating Agency.
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ARTICLE VII
Miscellaneous Provisions
Section 7.01 AMENDMENT. (a) This Agreement may be amended from time to
time by the Issuer, the Company, the Depositor, the Master Servicer, the
Securities Administrator and the Indenture Trustee, without notice to or the
consent of any of the Noteholders, to cure any ambiguity, to correct or
supplement any provisions herein or therein that may be defective or
inconsistent with any other provisions herein or therein, to comply with any
changes in the Code or to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be inconsistent with the
provisions of this Agreement; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, addressed to the Indenture Trustee,
adversely affect in any material respect the interests of any Noteholder.
(b) This Agreement may also be amended from time to time by the Issuer,
the Company, the Master Servicer, the Depositor, the Securities Administrator
and the Indenture Trustee, with the consent of the Holders of Notes aggregating
at least 51% of Note Principal Balance of the Notes, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Note without the consent of the Holder of such
Note or (ii) reduce the aforesaid percentage of Notes the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all Notes then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 7.01(b), Notes registered in the name of or held for the benefit of
the Issuer, the Depositor, the Securities Administrator, the Master Servicer, or
the Indenture Trustee or any Affiliate thereof shall be entitled to vote their
Percentage Interests with respect to matters affecting such Notes.
(c) Promptly after the execution of any such amendment, the Indenture
Trustee shall furnish a copy of such amendment or written notification of the
substance of such amendment to each Noteholder, with a copy to the Rating
Agencies.
(d) In the case of an amendment under Subsection 7.01(b) above, it
shall not be necessary for the Noteholders to approve the particular form of
such an amendment. Rather, it shall be sufficient if the Noteholders approve the
substance of the amendment. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Noteholders shall be
subject to such reasonable regulations as the Indenture Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Indenture Trustee shall be entitled to receive and rely upon an Opinion of
Counsel addressed to the Indenture Trustee stating that the execution of such
amendment is authorized or permitted by this Agreement. The Indenture Trustee,
the Master Servicer and the Securities Administrator may, but shall not be
obligated to, enter into any such amendment which affects its own respective
rights, duties or immunities under this Agreement.
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Section 7.02 RECORDATION OF AGREEMENT. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Depositor
shall effect such recordation, at the expense of the Trust Estate upon the
request in writing of a Noteholder, but only if such direction is accompanied by
an Opinion of Counsel (provided at the expense of the Noteholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Noteholders or is required by law.
Section 7.03 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5- 1401 OF THE GENERAL
OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE CHOICE OF
SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 7.04 NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice
President-Servicing, telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Indenture Trustee, at Deutsche Bank National Trust Company, ▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:Trust
Administration - BS03A1, or such other address as may hereafter be furnished to
the other parties hereto in writing; (iii) in the case of the Company, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice President-Servicing,
telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇, or to such other address as may hereafter be
furnished to the other parties hereto in writing; (iv) in the case of the Master
Servicer or Securities Administrator, ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or, in the case of overnight
deliveries, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 21045) (Attention:
Corporate Trust Services - AHMIT 2003-1), facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇, or such
other address as may hereafter be furnished to the other parties hereto in
writing; or (v) in the case of the Issuer, to American Home Mortgage Investment
Trust 2003-1 c/o Wilmington Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Administration, or such other address as may hereafter be furnished to the other
parties hereto in writing; (vi) in the case of the Owner Trustee, to Wilmington
Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration, or such other address
as may hereafter be furnished to the other parties hereto in writing; and (vii)
in the case of the Rating Agency, Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Any
notice delivered to the Depositor, the Master Servicer, the Securities
Administrator, the Indenture Trustee, the Issuer or the Owner Trustee under this
Agreement shall be effective only upon receipt. Any notice required or permitted
to be mailed to a Noteholder, unless otherwise provided herein, shall be given
by first-class mail, postage prepaid, at the address of such Noteholder as shown
in the Note Register. Any notice so mailed within the time prescribed in this
-38-
Agreement shall be conclusively presumed to have been duly given when mailed,
whether or not the Noteholder receives such notice.
Section 7.05 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Notes or the
rights of the Noteholders thereof.
Section 7.06 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon the parties hereto, the Noteholders and their respective
successors and assigns. The Indenture Trustee shall have the right to exercise
all rights of the Issuer under this Agreement.
Section 7.07 ARTICLE AND SECTION HEADINGS. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 7.08 COUNTERPARTS. This Agreement may be executed in two or
more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same instrument.
Section 7.09 NOTICE TO RATING AGENCIES. The Indenture Trustee shall
promptly provide notice to each Rating Agency with respect to each of the
following of which a Responsible Officer of the Indenture Trustee has actual
knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Master Servicer Event of Default that
has not been cured;
3. The resignation or termination of the Master Servicer, the
Indenture Trustee or the Securities Administrator; and
4. Any change in the location of the Master Servicer
Collection Account or the Payment Account.
Section 7.10 TERMINATION. The respective obligations and
responsibilities of the parties hereto created hereby shall terminate upon the
satisfaction and discharge of the Indenture pursuant to Section 4.10 thereof
and, if applicable, the optional redemption of the Notes pursuant to Section
8.07 thereof. In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under this Section, the Master
Servicer shall deliver to the Indenture Trustee for deposit in the Payment
Account all distributable amounts remaining in the Master Servicer Collection
Account. Upon the presentation and surrender of the Notes, the Indenture Trustee
shall distribute to the remaining Noteholders, pursuant to the written direction
of the Securities Administrator and in accordance with their respective
interests, all distributable amounts remaining in the Payment
-39-
Account. Upon deposit by the Master Servicer of such distributable amounts, and
following such final Payment Date, the Indenture Trustee shall release promptly
to the Issuer or its designee the Mortgage Files for the remaining Mortgage
Loans, and the Master Servicer Collection Account and the Payment Account shall
terminate, subject to the Indenture Trustee's obligation to hold any amounts
payable to the Noteholders in trust without interest pending final distributions
pursuant to the Indenture.
Section 7.11 NO PETITION. The Master Servicer, by entering into this
Agreement, hereby covenants and agrees that it will not at any time institute
against the Issuer, or join in any institution against the Issuer, any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations of the Issuer. This section shall
survive the termination of this Agreement by one year.
Section 7.12 NO RECOURSE. The Master Servicer acknowledges that no
recourse may be had against the Issuer, except as may be expressly set forth in
this Agreement.
-40-
IN WITNESS WHEREOF, the Depositor, the Issuer, the Company, the
Indenture Trustee, the Master Servicer and the Securities Administrator have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., as Depositor
By: /s/: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
AMERICAN HOME MORTGAGE
INVESTMENT TRUST 2003-1, as Issuer
By: WILMINGTON TRUST COMPANY, not
in its individual capacity, but solely
as Owner Trustee
By: /s/: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Financial Services Officer
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Indenture Trustee
By: /s/: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
By: /s/: ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Associate
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Master
Servicer
By: /s/: ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
-41-
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Securities
Administrator
By: /s/: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
EMC MORTGAGE CORPORATION
By: /s/: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of December, 2003 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, known to me to be a(n) Vice
President of Structured Asset Mortgage Investments II Inc., the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
---------------------------------
Notary Public
[Notarial Seal]
-43-
STATE OF DELAWARE )
) ss.:
COUNTY OF WILMINGTON )
On the 31st day of December, 2003 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me to be a Financial
Services Officer of Wilmington Trust Company, the entity that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said entity, and acknowledged to me that such entity executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
---------------------------------
Notary Public
[Notarial Seal]
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF ORANGE )
On the 31st day of December, 2003 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, known to me to be a Assistant
Vice President of Deutsche Bank National Trust Company, the entity that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said entity, and acknowledged to me that such entity executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
---------------------------------
Notary Public
[Notarial Seal]
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 31st day of December, 2003 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an Assistant
Vice President of ▇▇▇▇▇ Fargo Bank Minnesota, National Association, the entity
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
---------------------------------
Notary Public
[Notarial Seal]
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 31st day of December, 2003 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be a(n) Assistant
Vice President of ▇▇▇▇▇ Fargo Bank Minnesota, National Association, the entity
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
---------------------------------
Notary Public
[Notarial Seal]
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
) ss.:
COUNTY OF DALLAS )
On the 31st day of December, 2003 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, known to me to be an Executive
Vice President of EMC Mortgage Corporation, the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
---------------------------------
Notary Public
[Notarial Seal]
-48-
EXHIBIT A
MORTGAGE LOAN SCHEDULE
----------------------
[Provided Upon Request]
A-1
EXHIBIT B
FORM OF INITIAL CERTIFICATION
_________, 200_
American Home Mortgage Investment Trust 2003-1
c/o Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Structured Asset Mortgage Investments II Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Sale and Servicing Agreement, dated as of December 31, 2003 (the
"Sale and Servicing Agreement"), among American Home Mortgage
Investment Trust 2003-1, as Issuer, Structured Asset Mortgage
Investments II Inc., as Depositor, EMC Mortgage Corporation, as
Seller and Company, Deutsche Bank National Trust Company, as
Indenture Trustee and ▇▇▇▇▇ Fargo Bank, National Association, as
Master Servicer and Securities Administrator, relating to
American Home Mortgage Investment Trust 2003-1, Mortgage-Backed
Notes, Series 2003-1.
---------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the above-captioned Sale
and Servicing Agreement, the undersigned, as Indenture Trustee, hereby certifies
that it has received a Mortgage File (which contains an original Mortgage Note
or lost note affidavit) to the extent required in Section 2.01 of the Sale and
Servicing Agreement with respect to each Mortgage Loan listed in the Mortgage
Loan Schedule, with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in Appendix A to the Indenture.
The Indenture Trustee has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the Sale and Servicing Agreement. The Indenture Trustee makes no
representations as to: (i) validity, legality, sufficiency, recordability,
enforceability or genuineness of any of the documents contained in the Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, perfection, priority, effectiveness or
suitability of any such Mortgage Loan.
B-1
DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Indenture Trustee
By:
---------------------------------
Name:
Title:
B-2
EXHIBIT C
FORM OF INTERIM CERTIFICATION
______________, 200__
American Home Mortgage Investment Trust 2003-1
c/o Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Structured Asset Mortgage Investments II Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Sale and Servicing Agreement, dated as of December 31, 2003 (the
"Sale and Servicing Agreement"), among American Home Mortgage
Investment Trust 2003-1, as Issuer, Structured Asset Mortgage
Investments II Inc., as Depositor, EMC Mortgage Corporation, as
Seller and Company, Deutsche Bank National Trust Company, as
Indenture Trustee and ▇▇▇▇▇ Fargo Bank, National Association, as
Master Servicer and Securities Administrator, relating to
American Home Mortgage Investment Trust 2003-1, Mortgage-Backed
Notes, Series 2003-1.
---------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the above-captioned Sale
and Servicing Agreement, the undersigned, as Indenture Trustee, hereby certifies
that it has received a Mortgage File to the extent required pursuant to Section
2.01 of the Sale and Servicing Agreement with respect to each Mortgage Loan
listed in the Mortgage Loan Schedule, and it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that: all documents required to be
reviewed by it have been executed and received and that such documents relate to
the Mortgage Loans identified on the Mortgage Loan Schedule, with any exceptions
listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in Appendix A to the Indenture.
The Indenture Trustee has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the Sale and Servicing Agreement. The Indenture Trustee makes no
representations as to: (i) validity, legality, sufficiency, recordability,
enforceability or genuineness of any of the documents contained in the Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, perfection, priority, effectiveness or
suitability of any such Mortgage Loan.
C-1
DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Indenture Trustee
By:
---------------------------------
Name:
Title:
C-2
EXHIBIT D
FORM OF FINAL CERTIFICATION
________________, 200__
American Home Mortgage Investment Trust 2003-1
c/o Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Structured Asset Mortgage Investments II Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Sale and Servicing Agreement, dated as of December 31, 2003 (the
"Sale and Servicing Agreement"), among American Home Mortgage
Investment Trust 2003-1, as Issuer, Structured Asset Mortgage
Investments II Inc., as Depositor, EMC Mortgage Corporation, as
Seller and Company, Deutsche Bank National Trust Company, as
Indenture Trustee and ▇▇▇▇▇ Fargo Bank, National Association, as
Master Servicer and Securities Administrator, relating to
American Home Mortgage Investment Trust 2003-1, Mortgage-Backed
Notes, Series 2003-1.
---------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the above-captioned Sale
and Servicing Agreement and subject to Section 2.02(b) of the Sale and Servicing
Agreement, the undersigned, as Indenture Trustee, hereby certifies that it has
received a Mortgage File with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule containing with respect to each such Mortgage Loan:
(i) the original Mortgage Note, including any riders thereto,
endorsed without recourse in blank or to the order of
"Deutsche Bank National Trust Company, as Indenture Trustee
for noteholders of American Home Mortgage Investment Trust
2003-1, Mortgage-Backed Notes, Series 2003-1," and showing to
the extent available to the Seller an unbroken chain of
endorsements from the originator thereof to the Person
endorsing it in blank or to the Indenture Trustee, or a lost
note affidavit with a copy of the related Mortgage Note,
(ii) The original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language
indicating that such Mortgage Loan is a MOM Loan, which shall
have been recorded (or if the original is not available, a
copy), with evidence of such recording indicated thereon (or
if the
D-1
original Security Instrument, assignments to the Indenture
Trustee or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of
recording information relating to the Security Instrument
required to be included thereon, be delivered to recording
offices for recording and have not been returned to the Seller
in time to permit their recording as specified in Section
2.01(b) of the Sale and Servicing Agreement, shall be in
recordable form);
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket
assignment if permitted in the jurisdiction in which the
Mortgaged Property is located) in blank or to "Deutsche Bank
National Trust Company, as Indenture Trustee for noteholders
of American Home Mortgage Investment Trust 2003-1,
Mortgage-Backed Notes, Series 2003-1", with evidence of
recording with respect to each Mortgage Loan in the name of
the Indenture Trustee thereon (or if (A) the original Security
Instrument, assignments to the Indenture Trustee or
intervening assignments thereof which have been delivered, are
being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included
thereon, be delivered to recording offices for recording and
have not been returned to the Seller in time to permit their
delivery as specified in Section 2.01(b) of the Sale and
Servicing Agreement, a true copy thereof with a certification
by the Seller, on the face of such copy, substantially as
follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording" or (B) the
related Mortgaged Property is located in a state other than
Maryland and an Opinion of Counsel has been provided as set
forth in Section 2.01(b), shall be in recordable form);
(iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent available to the
Depositor with evidence of recording thereon;
(v) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available,
if any;
(vi) the original or a copy of the policy of title insurance
or mortgagee's certificate of title insurance or commitment or
binder for title insurance; and
(vii) originals of all modification agreements, if applicable
and available.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in Appendix A to the Indenture.
The Indenture Trustee has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the Sale and Servicing Agreement. The Indenture Trustee makes no
representations as to: (i) validity, legality, sufficiency, recordability,
enforceability or genuineness of any of the documents contained in the Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, perfection, priority, effectiveness or
suitability of any such Mortgage Loan.
D-2
DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Indenture Trustee
By:
---------------------------------
Name:
Title:
D-3
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
RE: Sale and Servicing Agreement, dated as of December 31, 2003 (the "Sale
and Servicing Agreement"), among American Home Mortgage Investment
Trust 2003-1 as Issuer, Structured Asset Mortgage Investments II Inc.,
as Depositor, Deutsche Bank National Trust Company, as Indenture
Trustee, ▇▇▇▇▇ Fargo Bank Minnesota, National Associations, as
Securities Administrator and Master Servicer and EMC Mortgage
Corporation, as Seller.
In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Sale and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.
MORTGAGE LOAN NUMBER:
MORTGAGOR NAME, ADDRESS & ZIP CODE:
REASON FOR REQUESTING DOCUMENTS (CHECK ONE):
_____ 1. Mortgage Paid in Full and proceeds have been
deposited into the Master Servicer Collection Account
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation
_____ 5. Nonliquidation Reason:______________
_____ 6. California Mortgage Loan paid in full
By:
_______________________________
(authorized signer)
Issuer:
____________________________
Address:
___________________________
Date:
______________________________
E-1
EXHIBIT F
AHM SERVICING AGREEMENT
-----------------------
[Provided Upon Request]
F-1
EXHIBIT G
ASSIGNMENT AGREEMENT
--------------------
[Provided Upon Request]
G-1
EXHIBIT H
MORTGAGE LOAN PURCHASE AGREEMENT
--------------------------------
MORTGAGE LOAN PURCHASE AGREEMENT
between
EMC MORTGAGE CORPORATION
as Mortgage Loan Seller
and
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
as Purchaser
Dated as of
December 31, 2003
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS.........................................................................2
SECTION 2. PURCHASE AND SALE OF THE MORTGAGE LOANS AND RELATED RIGHTS..........................3
SECTION 3. MORTGAGE LOAN SCHEDULES.............................................................4
SECTION 4. MORTGAGE LOAN TRANSFER..............................................................4
SECTION 5. EXAMINATION OF MORTGAGE FILES.......................................................6
SECTION 6. RECORDATION OF ASSIGNMENTS OF MORTGAGE..............................................8
SECTION 7. REPRESENTATIONS AND WARRANTIES OF MORTGAGE LOAN SELLER CONCERNING THE
MORTGAGE LOANS. ..................................................................................................9
SECTION 8. REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOAN SELLER.................13
SECTION 9. REPRESENTATIONS AND WARRANTIES CONCERNING THE PURCHASER............................14
SECTION 10. CONDITIONS TO CLOSING.............................................................15
SECTION 11. FEES AND EXPENSES.................................................................17
SECTION 12. ACCOUNTANTS' LETTERS..............................................................18
SECTION 13. INDEMNIFICATION...................................................................18
SECTION 14. NOTICES...........................................................................20
SECTION 15. TRANSFER OF MORTGAGE LOANS........................................................21
SECTION 16. TERMINATION.......................................................................21
SECTION 17. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY....................21
SECTION 18. SEVERABILITY......................................................................22
SECTION 19. COUNTERPARTS......................................................................22
SECTION 20. AMENDMENT.........................................................................22
SECTION 21. GOVERNING LAW.....................................................................22
H-i
SECTION 22. FURTHER ASSURANCES................................................................22
SECTION 23. SUCCESSORS AND ASSIGNS............................................................22
SECTION 24. THE MORTGAGE LOAN SELLER..........................................................22
SECTION 25. ENTIRE AGREEMENT..................................................................22
SECTION 26. NO PARTNERSHIP....................................................................23
EXHIBITS AND SCHEDULE TO
MORTGAGE LOAN PURCHASE AGREEMENT
Exhibit 1 Contents of Mortgage File
Exhibit 2 Mortgage Loan Schedule Information
Exhibit 3 Mortgage Loan Seller's Information
Exhibit 4 Purchaser's Information
Exhibit 5 Schedule of Lost Notes
Schedule A Required Ratings for Each Class of Notes
Schedule B Mortgage Loan Schedule
H-ii
MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of December 31,
2003, as amended and supplemented by any and all amendments hereto
(collectively, the "AGREEMENT"), by and between EMC MORTGAGE CORPORATION, a
Delaware corporation (the "MORTGAGE LOAN SELLER"), and STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., a Delaware corporation (the "PURCHASER").
Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, first lien mortgage loans secured primarily by
one- to four-family residential properties and individual condominium units
(collectively, the "MORTGAGE LOANS") as described herein. The Purchaser has
established American Home Mortgage Investment Trust 2003-1, a Delaware statutory
trust (the "Issuer") pursuant to a Trust Agreement, dated as of December 29,
2003, as amended and restated on December 31, 2003, among the Purchaser, the
Issuer and Deutsche Bank National Trust Company, as certificate registrar and
certificate paying agent. The Purchaser intends to sell the Mortgage Loans to
the Issuer pursuant to a Sale and Servicing Agreement, dated as of December 31,
2003 among the Purchaser, the Issuer, the Mortgage Loan Seller, Deutsche Bank
National Trust Company, as indenture trustee (the "Indenture Trustee") and ▇▇▇▇▇
Fargo Bank Minnesota, National Association, as securities administrator (in such
capacity the "Securities Administrator") and as master Servicer (in such
capacity the "Master Servicer"). The Issuer, pursuant to an Indenture, dated as
of December 31, 2003 (the "INDENTURE") among the Issuer, the Indenture Trustee
and the Securities Administrator, intends to pledge the Mortgage Loans to the
Indenture Trustee and, issue and transfer to the Purchaser the American Home
Mortgage Investment Trust 2003-1, Mortgage-Backed Notes, Series 2003-1 and the
Certificates issued pursuant to the Trust Agreement. The Master Servicer will
master service the Mortgage Loans on behalf of the Issuer, pursuant to the Sale
and Servicing Agreement. Primary servicing of the Mortgage Loans will be
provided by American Home Mortgage Corp. (the "SERVICER") pursuant to a
Purchase, Warranties and Servicing Agreement, dated as of December 31, 2003 (the
"AHM SERVICING AGREEMENT") between the Mortgage Loan Seller, American Home
Mortgage Investment Corp. and the Servicer, which (other than with respect to
certain rights of the Mortgage Loan Seller against the Servicer) will be
assigned to the Issuer on the Closing Date.
The Purchaser has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (Number
333-106323) relating to its Mortgage- Backed Notes and the offering of certain
series thereof (including certain classes of the Notes) from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder (the "SECURITIES
ACT"). Such registration statement, when it became effective under the
Securities Act, and the prospectus relating to the public offering of certain
classes of the Notes by the Purchaser (the "PUBLIC OFFERING"), as each may be
amended or supplemented from time to time pursuant to the Securities Act or
otherwise, are referred to herein as the "REGISTRATION STATEMENT" and the
"PROSPECTUS," respectively. The "PROSPECTUS SUPPLEMENT" shall mean that
supplement, dated December 31, 2003 to the Prospectus, dated September 29, 2003,
relating to certain classes of the Notes. With respect to the Public Offering of
certain classes of the Notes, the Purchaser and Bear, ▇▇▇▇▇▇▇ & Co. Inc. ("BEAR
▇▇▇▇▇▇▇") have entered into a terms agreement dated as of December 31, 2003 to
an underwriting agreement dated December 31, 2003, between the Purchaser and
Bear ▇▇▇▇▇▇▇ (collectively, the "UNDERWRITING AGREEMENT").
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Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:
SECTION 1.DEFINITIONS. Certain terms are defined herein. Capitalized terms used
herein but not defined herein shall have the meanings specified in Appendix A to
the Indenture. The following other terms are defined as follows:
ACQUISITION PRICE: Cash in an amount equal to $______ (plus
$______ in accrued interest)1.
BEAR ▇▇▇▇▇▇▇: Bear, ▇▇▇▇▇▇▇ & Co. Inc.
CLOSING DATE: December 31, 2003.
CUT-OFF DATE: December 1, 2003.
CUT-OFF DATE BALANCE: $215,651,899.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a Substitute Mortgage Loan.
DUE DATE: With respect to each Mortgage Loan, the date in each
month on which its scheduled payment is due if such due date is the first day of
a month and otherwise is deemed to be the first day of the following month or
such other date specified in the AHM Servicing Agreement.
▇▇▇▇▇▇ MAE: The Federal National Mortgage Association, or any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
MASTER SERVICER: ▇▇▇▇▇ Fargo Bank Minnesota, National
Association.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MORTGAGE: The mortgage or deed of trust creating a first lien
on an interest in real property securing a Mortgage Note.
MORTGAGE FILE: The items referred to in EXHIBIT 1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such documents pursuant to this Agreement.
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1 Please contact Bear, ▇▇▇▇▇▇▇ & Co. Inc. for Purchase Price.
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MORTGAGE INTEREST RATE: The annual rate of interest borne by a
Mortgage Note as stated therein.
MORTGAGOR: The obligor(s) on a Mortgage Note.
NET RATE: For each Mortgage Loan, the Mortgage Interest Rate
for such Mortgage Loan less the Servicing Fee Rate, the Indenture Trustee Fee
Rate and the Master Servicing Fee Rate, in each case expressed as a per annum
rate.
OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Indenture Trustee.
PERSON: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
PURCHASE PRICE: With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the
Mortgage Loan Seller pursuant to this Agreement, an amount equal to the sum of
(i)(a) 100% of the Outstanding Principal Balance of such Mortgage Loan as of the
date of repurchase (or if the related Mortgaged Property was acquired with
respect thereto, 100% of the Outstanding Principal Balance at the date of the
acquisition), plus (b) accrued but unpaid interest on the Outstanding Principal
Balance at the related Mortgage Interest Rate, through and including the last
day of the month of repurchase, plus (c) any unreimbursed Monthly Advances and
servicing advances payable to the Servicer with respect to such Mortgage Loan
and (ii) any costs and damages (if any) incurred by the Trust in connection with
any violation of such Mortgage Loan of any predatory lending laws.
RATING AGENCY: Standard & Poor's.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITY INSTRUMENT: A written instrument creating a valid
first lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.
STANDARD & POOR'S: Standard & Poor's, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or its successors in interest.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan substituted for a
Deleted Mortgage Loan, which is tendered to the Indenture Trustee pursuant to
this Agreement and Section 2.04 of the Sale and Servicing Agreement, (i) which
has an Outstanding Principal Balance not greater nor materially less than the
Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage
Interest Rate and Net Rate not less than, and not materially greater than, such
Mortgage Loan; (iii) which has a maturity date not materially earlier or later
than such Mortgage Loan and not later than the latest maturity date of any
Mortgage Loan; (iv) which is of the same property type and occupancy type as
such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the
Loan-to-Value Ratio
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of such Mortgage Loan; (vi) which is current in payment of principal and
interest as of the date of substitution; (vii) as to which the payment terms do
not vary in any material respect from the payment terms of the Mortgage Loan for
which it is to be substituted and (viii) which has a Gross Margin, Periodic Rate
Cap and Maximum Lifetime Mortgage Rate no less than those of such Mortgage Loan,
has the same Index and interval between Interest Adjustment Dates as such
Mortgage Loan, and a Minimum Lifetime Mortgage Rate no lower than that of such
Mortgage Loan. Upon such substitution, such mortgage loan shall be a "Mortgage
Loan" hereunder.
VALUE: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.
SECTION 2.PURCHASE AND SALE OF THE MORTGAGE LOANS AND RELATED
RIGHTS. (a) Upon satisfaction of the conditions set forth in Section 10 hereof,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.
(b) The closing for the purchase and sale of the Mortgage Loans and the
closing for the issuance of the Notes will take place on the Closing Date at the
office of the Purchaser's counsel in New York, New York or such other place as
the parties shall agree.
(c) Upon the satisfaction of the conditions set forth in Section 10
hereof, on the Closing Date, the Purchaser shall pay to the Mortgage Loan Seller
the Acquisition Price for the Mortgage Loans in immediately available funds by
wire transfer to such account or accounts as shall be designated by the Mortgage
Loan Seller.
(d) In addition to the foregoing, on the Closing Date the Mortgage Loan
Seller assigns to the Purchaser all of its right, title and interest in the AHM
Servicing Agreement (other than its right to enforce the representations and
warranties set forth therein).
SECTION ▇.▇▇▇▇▇▇▇▇ LOAN SCHEDULES. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "PRELIMINARY MORTGAGE LOAN SCHEDULE") setting forth
the information listed on EXHIBIT 2 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "FINAL
MORTGAGE LOAN SCHEDULE") setting forth the information listed on EXHIBIT 2 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "AMENDMENT"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.
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SECTION ▇.▇▇▇▇▇▇▇▇ LOAN TRANSFER.
(a) The Purchaser will be entitled to all scheduled payments of
principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereon, other than
scheduled principal and interest due on or before the Cut-off Date but received
after the Cut-off Date. The Mortgage Loan Seller will be entitled to all
scheduled payments of principal and interest on the Mortgage Loans due on or
before the Cut-off Date (including payments collected after the Cut-off Date)
and all payments thereon, other than scheduled principal and interest due after
the Cut-off Date but received on or before the Cut-off Date. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.
(b) Pursuant to the Sale and Servicing Agreement, the Purchaser will
sell, assign and transfer on the Closing Date all of its right, title and
interest in and to the Mortgage Loans to the Issuer and, pursuant to the
Indenture, the Issuer will assign all of its right, title and interest to the
Mortgage Loans to the Indenture Trustee for the benefit of the Noteholders, to
secure the Notes issued pursuant to the Indenture. In connection with such
transfers and assignments of the Mortgage Loans, the Mortgage Loan Seller has
delivered or will deliver or cause to be delivered to the Indenture Trustee by
the Closing Date or such later date as is agreed to by the Purchaser and the
Mortgage Loan Seller (each of the Closing Date and such later date is referred
to as a "MORTGAGE FILE DELIVERY DATE"), the items of each Mortgage File,
PROVIDED, HOWEVER, that in lieu of the foregoing, the Mortgage Loan Seller may
deliver the following documents, under the circumstances set forth below: (w) in
lieu of the original Security Instrument (including the Mortgage), assignments
to the Indenture Trustee or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to such documents required to be included thereon, be delivered to
recording offices for recording and have not been returned to the Mortgage Loan
Seller in time to permit their delivery as specified above, the Mortgage Loan
Seller may deliver a true copy thereof with a certification by the Mortgage Loan
Seller, or its agent on its behalf, substantially to the effect that such copy
is a true and correct copy of the original; (x) in lieu of the Security
Instrument, assignments to the Indenture Trustee or intervening assignments
thereof, if the applicable jurisdiction retains the originals of such documents
(as evidenced by a certification from the Mortgage Loan Seller to such effect)
the Mortgage Loan Seller may deliver photocopies of such documents containing an
original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each identified in the list delivered by
the Purchaser to the Indenture Trustee on the Closing Date and attached hereto
as Exhibit 5, the Mortgage Loan Seller may deliver lost note affidavits and
indemnities of the Mortgage Loan Seller; and (z) the Mortgage Loan Seller shall
not be required to deliver intervening assignments or Mortgage Note endorsements
between the related Underlying Seller and the Mortgage Loan Seller, between the
Mortgage Loan Seller and the Depositor, between the Depositor and the Issuer and
between the Issuer and the Indenture Trustee; and provided further, however,
that in the case of Mortgage Loans which have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Mortgage Loan Seller, in lieu of
delivering the above documents, may deliver to the Indenture Trustee a
certification by the Mortgage Loan Seller or the Master Servicer to such effect
and shall deposit all amounts paid in respect of such Mortgage Loans in the
Master Servicer Collection Account on the Closing Date. The Mortgage
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Loan Seller shall deliver such original documents (including any original
documents as to which certified copies had previously been delivered) or such
certified copies to the Indenture Trustee promptly after they are received. The
Mortgage Loan Seller shall cause the Mortgage and intervening assignments, if
any, and the assignment of the Security Instrument to be recorded not later than
180 days after the Closing Date, unless such assignment is not required to be
recorded under the terms set forth in Section 6(a) hereof.
(c) In connection with the assignment of any Mortgage Loan registered
on the MERS(R) System, the Mortgage Loan Seller further agrees that it will
cause, at the Mortgage Loan Seller's own expense, within 30 days after the
Closing Date, the MERS(R) System to indicate that such Mortgage Loans have been
assigned by the Mortgage Loan Seller to the Purchaser, by the Purchaser to the
Issuer and by the Issuer to the Indenture Trustee in accordance with this
Agreement for the benefit of the Noteholders by including (or deleting, in the
case of Mortgage Loans which are repurchased in accordance with this Agreement)
in such computer files (a) the code in the field which identifies the specific
Indenture Trustee and (b) the code in the field "Pool Field" which identifies
the series of the Notes issued in connection with such Mortgage Loans. The
Mortgage Loan Seller further agrees that it will not, and will not permit any
Servicer or the Master Servicer to, and the Master Servicer agrees that it will
not, alter the codes referenced in this paragraph with respect to any Mortgage
Loan during the term of the Indenture unless and until such Mortgage Loan is
repurchased in accordance with the terms of the Sale and Servicing Agreement.
(d) The Mortgage Loan Seller and the Purchaser acknowledge hereunder
that all of the Mortgage Loans and the related servicing will ultimately be
assigned to Deutsche Bank National Trust Company, as Indenture Trustee on behalf
of the Noteholders, on the date hereof.
SECTION 5.EXAMINATION OF MORTGAGE FILES.
(a) On or before the Mortgage File Delivery Date, the Mortgage Loan
Seller will have made the Mortgage Files available to the Purchaser or its agent
for examination which may be at the offices of the Indenture Trustee or the
Mortgage Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that
the Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure, repurchase, substitution or other relief as provided in
this Agreement. In furtherance of the foregoing, the Mortgage Loan Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Mortgage Loan Seller's
compliance with the delivery and recordation requirements of this Agreement and
the Sale and Servicing Agreement. In addition, upon request of the Purchaser,
the Mortgage Loan Seller agrees to provide to the Purchaser, Bear ▇▇▇▇▇▇▇ and to
any investors or prospective investors in the Notes information regarding the
Mortgage Loans and their servicing, to make the Mortgage Files available to the
Purchaser, Bear ▇▇▇▇▇▇▇ and to such investors or prospective investors (which
may be at the offices of the Mortgage Loan Seller and/or the Mortgage Loan
Seller's custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear ▇▇▇▇▇▇▇ and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear ▇▇▇▇▇▇▇ and such
investors or potential investors to conduct such due diligence as any such party
reasonably believes is appropriate.
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(b) Pursuant to the Sale and Servicing Agreement, on the Closing Date
the Indenture Trustee, for the benefit of the Noteholders, will acknowledge
receipt of each Mortgage Loan, by delivery to the Mortgage Loan Seller, the
Purchaser and the Issuer of an initial certification in the form attached as
Exhibit B to the Sale and Servicing Agreement.
(c) Pursuant to the Sale and Servicing Agreement, within 90 days of the
Closing Date (or, with respect to any Substitute Mortgage Loan, within five
Business Days after the receipt by the Indenture Trustee, the Indenture Trustee
will, in accordance with the Sale and Servicing Agreement, review items of the
Mortgage Files as set forth on EXHIBIT 1 and will deliver to the Mortgage Loan
Seller, the Purchaser and the Indenture Trustee an interim certification
substantially in the form of Exhibit C to the Sale and Servicing Agreement. If
the Indenture Trustee finds any document listed on EXHIBIT 1 which it is
required to review has not been executed or received, or is unrelated,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage Loans identified in the Final Mortgage Loan
Schedule does not conform on its face to the review criteria specified in
Section 2.01 of the Sale and Servicing Agreement (a "MATERIAL DEFECT"), the
Indenture Trustee, in accordance with the Sale and Servicing Agreement, shall
promptly notify the Mortgage Loan Seller of such Material Defect. The Mortgage
Loan Seller shall correct or cure any such Material Defect within 90 days from
the date of notice from the Indenture Trustee of the Material Defect and if the
Mortgage Loan Seller fails to correct or cure such Material Defect within such
period, the Mortgage Loan Seller will, within 90 days of the date of notice,
provide the Indenture Trustee with a Substitute Mortgage Loan or purchase the
related Mortgage Loan at the applicable Purchase Price; PROVIDED, HOWEVER, that
if such Material Defect relates solely to the inability of the Mortgage Loan
Seller to deliver the original Security Instrument or intervening assignments
thereof, or a certified copy because the originals of such documents, or a
certified copy, have not been returned by the applicable jurisdiction, the
Mortgage Loan Seller shall not be required to purchase such Mortgage Loan if the
Mortgage Loan Seller delivers such original documents or certified copy promptly
upon receipt, but in no event later than 360 days after the Closing Date. The
foregoing repurchase obligation shall not apply in the event that the Mortgage
Loan Seller cannot deliver such original or copy of any document submitted for
recording to the appropriate recording office in the applicable jurisdiction
because such document has not been returned by such office; provided that the
Mortgage Loan Seller shall instead deliver a recording receipt of such recording
office or, if such receipt is not available, a certificate confirming that such
documents have been accepted for recording, and delivery to the Indenture
Trustee shall be effected by the Mortgage Loan Seller within thirty days of its
receipt of the original recorded document.
(d) Pursuant to the Sale and Servicing Agreement, within 180 days of
the Closing Date (or, with respect to any Substitute Mortgage Loan, within five
Business Days after the receipt by the Indenture Trustee thereof) the Indenture
Trustee will, in accordance with the Sale and Servicing Agreement, review items
of the Mortgage Files as set forth on EXHIBIT 1 and will deliver to the Mortgage
Loan Seller, the Purchaser and the Issuer a final certification substantially in
the form of Exhibit D to the Sale and Servicing Agreement. If the Indenture
Trustee finds a Material Defect, the Indenture Trustee shall promptly notify the
Mortgage Loan Seller of such Material Defect. The Mortgage Loan Seller shall
correct or cure any such Material Defect within 90 days from the date of notice
from the Indenture Trustee of the Material Defect and if the Mortgage Loan
Seller fails to correct or cure such Material Defect within such period, the
Mortgage Loan Seller will, within 90 days of the date of notice, provide the
Indenture Trustee with a Substitute Mortgage Loan or
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purchase the related Mortgage Loan at the applicable Purchase Price; PROVIDED,
HOWEVER, that if such Material Defect relates solely to the inability of the
Mortgage Loan Seller to deliver the original Security Instrument or intervening
assignments thereof, or a certified copy because the originals of such
documents, or a certified copy, have not been returned by the applicable
jurisdiction, the Mortgage Loan Seller shall not be required to purchase such
Mortgage Loan if the Mortgage Loan Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 360 days after
the Closing Date. The foregoing repurchase obligation shall not apply in the
event that the Mortgage Loan Seller cannot deliver such original or copy of any
document submitted for recording to the appropriate recording office in the
applicable jurisdiction because such document has not been returned by such
office; provided that the Mortgage Loan Seller shall instead deliver a recording
receipt of such recording office or, if such receipt is not available, a
certificate confirming that such documents have been accepted for recording, and
delivery to the Indenture Trustee shall be effected by the Mortgage Loan Seller
within thirty days of its receipt of the original recorded document.
(e) At the time of any substitution, the Mortgage Loan Seller shall
deliver or cause to be delivered the Substitute Mortgage Loan, the related
Mortgage File and any other documents and payments required to be delivered in
connection with a substitution pursuant to the Sale and Servicing Agreement. At
the time of any purchase or substitution, the Indenture Trustee in accordance
with the terms of the Sale and Servicing Agreement will be required (i) assign
to the Mortgage Loan Seller and release the documents (including, but not
limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File)
in the possession of Indenture Trustee relating to the Deleted Mortgage Loan and
(ii) execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be necessary to vest in the Mortgage Loan Seller
title to such Deleted Mortgage Loan.
SECTION 6.RECORDATION OF ASSIGNMENTS OF MORTGAGE.
(a) The Mortgage Loan Seller shall cause each assignment of the
Security Instrument from the Mortgage Loan Seller to the Indenture Trustee to be
recorded not later than 180 days after the Closing Date, unless (a) such
recordation is not required by the Rating Agency or an Opinion of Counsel has
been provided to the Indenture Trustee which states that the recordation of such
assignments is not necessary to protect the interests of the Noteholders in the
related Mortgage Loans or (b) MERS is identified on the Mortgage or a properly
recorded assignment of the Mortgage, as the Mortgagee of record solely as
nominee for the Mortgage Loan Seller and its successors and assigns; PROVIDED,
HOWEVER, notwithstanding the foregoing, each assignment shall be submitted for
recording by the Mortgage Loan Seller in the manner described above, at no
expense to the Issuer or the Indenture Trustee, upon the earliest to occur of
(i) reasonable direction by the Holders of Notes aggregating at least 25% of the
Note Principal Balance of the Notes, (ii) the occurrence of a Master Servicer
Event of Default or an Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgage Loan Seller and (iv) the
occurrence of a servicing transfer as described in Section 6.02 of the Sale and
Servicing Agreement.
While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Indenture Trustee a certified copy of such Mortgage or assignment. All customary
recording fees and reasonable expenses relating to the
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recordation of the assignments of mortgage to the Indenture Trustee or the
Opinion of Counsel, as the case may be, shall be borne by the Mortgage Loan
Seller.
(b) It is the express intent of the parties hereto that the conveyance
of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser, as
contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser to secure a debt or
other obligation of the Mortgage Loan Seller. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held by a
court to continue to be property of the Mortgage Loan Seller, then (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the applicable Uniform Commercial Code; (b) the transfer of
the Mortgage Loans provided for herein shall be deemed to be a grant by the
Mortgage Loan Seller to the Purchaser of a security interest in all of the
Mortgage Loan Seller's right, title and interest in and to the Mortgage Loans
and all amounts payable to the holders of the Mortgage Loans in accordance with
the terms thereof and all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, instruments, securities or other property, to the
extent the Purchaser would otherwise be entitled to own such Mortgage Loans and
proceeds pursuant to Section 4 hereof, including all amounts, other than
investment earnings, from time to time held or invested in any accounts created
pursuant to the Indenture or the Sale and Servicing Agreement, whether in the
form of cash, instruments, securities or other property; (c) the possession by
the Purchaser, the Issuer or the Indenture Trustee of Mortgage Notes and such
other items of property as constitute instruments, money, negotiable documents
or chattel paper shall be deemed to be "possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-313 (or
comparable provision) of the applicable Uniform Commercial Code; and (d)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Purchaser for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Purchaser pursuant to any provision hereof or
pursuant to the Sale and Servicing Agreement and any subsequent assignment
pursuant to the Indenture shall also be deemed to be an assignment of any
security interest created hereby. The Mortgage Loan Seller and the Purchaser
shall, to the extent consistent with this Agreement, take such actions as may be
reasonably necessary to ensure that, if this Agreement were deemed to create a
security interest in the Mortgage Loans, such security interest would be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of the Indenture.
SECTION 7.REPRESENTATIONS AND WARRANTIES OF MORTGAGE LOAN
SELLER CONCERNING THE MORTGAGE LOANS. The Mortgage Loan Seller hereby represents
and warrants to the Purchaser as of the Closing Date or such other date as may
be specified below with respect to each Mortgage Loan being sold by it:
(i) the information set forth in the Mortgage Loan Schedule
hereto is true and correct in all material respects and the information
provided to the Rating Agency, including the Mortgage Loan level
detail, is true and correct according to the Rating Agency
requirements;
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(ii) immediately prior to the transfer to the Purchaser, the
Mortgage Loan Seller was the sole owner of beneficial title and holder
of each Mortgage and Mortgage Note relating to the Mortgage Loans and
is conveying the same free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or
security interests of any nature and the Mortgage Loan Seller has full
right and authority to sell or assign the same pursuant to this
Agreement;
(iii) Each Mortgage Loan at the time it was made complied in
all material respects with all applicable laws and regulations,
including, without limitation, usury, equal credit opportunity,
disclosure and recording laws and all predatory lending laws; and each
Mortgage Loan has been serviced in all material respects in accordance
with all applicable laws and regulations, including, without
limitation, usury, equal credit opportunity, disclosure and recording
laws and all predatory lending laws and the terms of the related
Mortgage Note, the Mortgage and other loan documents;
(iv) there is no monetary default existing under any Mortgage
or the related Mortgage Note and there is no material event which, with
the passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach or event of
acceleration; and neither the Mortgage Loan Seller, any of its
affiliates nor any servicer of any related Mortgage Loan has taken any
action to waive any default, breach or event of acceleration; no
foreclosure action is threatened or has been commenced with respect to
the Mortgage Loan;
(v) the terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by
written instruments, (i) if required by law in the jurisdiction where
the Mortgaged Property is located, or (ii) to protect the interests of
the Indenture Trustee on behalf of the Noteholders;
(vi) no selection procedure reasonably believed by the
Mortgage Loan Seller to be adverse to the interests of the Noteholders
was utilized in selecting the Mortgage Loans;
(vii) each Mortgage is a valid and enforceable first lien on
the property securing the related Mortgage Note and each Mortgaged
Property is owned by the Mortgagor in fee simple (except with respect
to common areas in the case of condominiums, PUDs and DE MINIMIS PUDs)
or by leasehold for a term longer than the term of the related
Mortgage, subject only to (i) the lien of current real property taxes
and assessments, (ii) covenants, conditions and restrictions, rights of
way, easements and other matters of public record as of the date of
recording of such Mortgage, such exceptions being acceptable to
mortgage lending institutions generally or specifically reflected in
the appraisal obtained in connection with the origination of the
related Mortgage Loan or referred to in the lender's title insurance
policy delivered to the originator of the related Mortgage Loan and
(iii) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security intended
to be provided by such Mortgage;
(viii) there is no mechanics' lien or claim for work, labor or
material affecting the premises subject to any Mortgage which is or may
be a lien prior to, or equal with, the lien
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of such Mortgage except those which are insured against by the title
insurance policy referred to in (xiiii) below;
(ix) as of the Cut-off Date, to the best of the Mortgage Loan
Seller's knowledge, there was no delinquent tax or assessment lien
against the property subject to any Mortgage, except where such lien
was being contested in good faith and a stay had been granted against
levying on the property;
(x) there is no valid offset, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor to
pay the unpaid principal and interest on such Mortgage Note;
(xi) to the best of the Mortgage Loan Seller's knowledge,
except to the extent insurance is in place which will cover such
damage, the physical property subject to any Mortgage is free of
material damage and is in good repair and there is no proceeding
pending or threatened for the total or partial condemnation of any
Mortgaged Property;
(xii) to the best of the Mortgage Loan Seller's knowledge, the
Mortgaged Property and all improvements thereon comply with all
requirements of any applicable zoning and subdivision laws and
ordinances;
(xiii) a lender's title insurance policy (on an ALTA or CLTA
form) or binder, or other assurance of title customary in the relevant
jurisdiction therefor in a form acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac, was issued on the date that each Mortgage Loan was created by a
title insurance company which, to the best of the Mortgage Loan
Seller's knowledge, was qualified to do business in the jurisdiction
where the related Mortgaged Property is located, insuring the Mortgage
Loan Seller and its successors and assigns that the Mortgage is a first
priority lien on the related Mortgaged Property in the original
principal amount of the Mortgage Loan. The Mortgage Loan Seller is the
sole insured under such lender's title insurance policy, and such
policy, binder or assurance is valid and remains in full force and
effect, and each such policy, binder or assurance shall contain all
applicable endorsements including a negative amortization endorsement,
if applicable;
(xiv) at the time of origination, each Mortgaged Property was
the subject of an appraisal which conformed to the underwriting
requirements of the originator of the Mortgage Loan and, the appraisal
is in a form acceptable to ▇▇▇▇▇▇ Mae or FHLMC;
(xv) as of the Closing Date, the improvements on each
Mortgaged Property securing a Mortgage Loan is insured (by an insurer
which is acceptable to the Mortgage Loan Seller) against loss by fire
and such hazards as are covered under a standard extended coverage
endorsement in the locale in which the Mortgaged Property is located,
in an amount which is not less than the lesser of the maximum insurable
value of the improvements securing such Mortgage Loan or the
outstanding principal balance of the Mortgage Loan, but in no event in
an amount less than an amount that is required to prevent the Mortgagor
from being deemed to be a co-insurer thereunder; if the improvement on
the Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the
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condominium project; if upon origination of the related Mortgage Loan,
the improvements on the Mortgaged Property were in an area identified
as a federally designated flood area, a flood insurance policy is in
effect in an amount representing coverage not less than the least of
(i) the outstanding principal balance of the Mortgage Loan, (ii) the
restorable cost of improvements located on such Mortgaged Property or
(iii) the maximum coverage available under federal law; and each
Mortgage obligates the Mortgagor thereunder to maintain the insurance
referred to above at the Mortgagor's cost and expense;
(xvi) none of the Mortgage Loans are secured by an interest in
a leasehold estate;
(xvii) each Mortgage Loan was originated or funded by (a) a
savings and loan association, savings bank, commercial bank, credit
union, insurance company or similar institution which is supervised and
examined by a federal or state authority (or originated by (i) a
subsidiary of any of the foregoing institutions which subsidiary is
actually supervised and examined by applicable regulatory authorities
or (ii) a mortgage loan correspondent of any of the foregoing and that
was originated pursuant to the criteria established by any of the
foregoing) or (b) a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to sections 203 and 211 of the National
Housing Act, as amended;
(xviii) none of the Mortgage Loans are (a) loans subject to 12
CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation
Z, the regulation implementing TILA, which implements the Home
Ownership and Equity Protection Act of 1994, as amended or (b)
classified and/or defined as a "high cost home loan" under any federal,
state or local law, including, but not limited to, the States of
Georgia or North Carolina; and
(xxix) the information set forth in Schedule A of the
Prospectus Supplement with respect to the Mortgage Loans is true and
correct in all material respects.
It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or assignment of Mortgage or the
examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the
representations and warranties set forth above shall be deemed to be made by the
Mortgage Loan Seller as to any Substitute Mortgage Loan as of the date of
substitution.
Upon discovery or receipt of notice by the Mortgage Loan
Seller, the Purchaser, the Issuer or the Indenture Trustee of a breach of any
representation or warranty of the Mortgage Loan Seller set forth in this Section
7 which materially and adversely affects the value of the interests of the
Purchaser, the Issuer, the Noteholders or the Indenture Trustee in any of the
Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the party
discovering or receiving notice of such breach shall give prompt written notice
to the others. In the case of any such breach of a representation or warranty
set forth in this Section 7, within 90 days from the date of discovery by the
Mortgage Loan Seller, or the date the Mortgage Loan Seller is notified by the
party discovering or receiving notice of such breach (whichever occurs earlier),
the Mortgage Loan Seller will (i) cure such breach in all material respects,
(ii) purchase the affected Mortgage Loan at the applicable Purchase Price or
(iii) substitute a qualifying Substitute Mortgage Loan in exchange for such
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Mortgage Loan. The obligations of the Mortgage Loan Seller to cure, purchase or
substitute a qualifying Substitute Mortgage Loan shall constitute the
Purchaser's, the Issuer's, the Indenture Trustee's and the Noteholder's sole and
exclusive remedy under this Agreement or otherwise respecting a breach of
representations or warranties hereunder with respect to the Mortgage Loans,
except for the obligation of the Mortgage Loan Seller to indemnify the Purchaser
for such breach as set forth in and limited by Section 13 hereof.
Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.
SECTION 8.REPRESENTATIONS AND WARRANTIES CONCERNING THE
MORTGAGE LOAN SELLER. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser as to itself in
the capacity indicated as follows:
(a) the Mortgage Loan Seller (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and (ii) is qualified and in good standing to do business in each jurisdiction
where such qualification is necessary, except where the failure so to qualify
would not reasonably be expected to have a material adverse effect on the
Mortgage Loan Seller's business as presently conducted or on the Mortgage Loan
Sellers ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(b) the Mortgage Loan Seller has full power to own its property, to
carry on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(c) the execution and delivery by the Mortgage Loan Seller of this
Agreement have been duly authorized by all necessary action on the part of the
Mortgage Loan Seller; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Mortgage Loan Seller or its
properties or the charter or by- laws of the Mortgage Loan Seller, except those
conflicts, breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Mortgage Loan Seller's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(d) the execution, delivery and performance by the Mortgage Loan Seller
of this Agreement and the consummation of the transactions contemplated hereby
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;
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(e) this Agreement has been duly executed and delivered by the Mortgage
Loan Seller and, assuming due authorization, execution and delivery by the
Purchaser, constitutes a valid and binding obligation of the Mortgage Loan
Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to the
knowledge of the Mortgage Loan Seller, threatened against the Mortgage Loan
Seller, before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions contemplated by
this Agreement or (ii) with respect to any other matter which in the judgment of
the Mortgage Loan Seller will be determined adversely to the Mortgage Loan
Seller and will if determined adversely to the Mortgage Loan Seller materially
and adversely affect the Mortgage Loan Seller's ability to perform its
obligations under this Agreement; and the Mortgage Loan Seller is not in default
with respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement; and
(g) the Mortgage Loan Seller's Information (as defined in Section 13(a)
hereof) does not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.
SECTION 9.REPRESENTATIONS AND WARRANTIES CONCERNING THE
PURCHASER. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Mortgage Loan Seller as follows:
(a) the Purchaser (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and (ii) is
qualified and in good standing as a foreign corporation to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect on
the Purchaser's business as presently conducted or on the Purchaser's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(b) the Purchaser has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(c) the execution and delivery by the Purchaser of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Purchaser; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or constitute a
default under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Purchaser or its properties or the
articles of incorporation or by-laws of the Purchaser, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on the Purchaser's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
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(d) the execution, delivery and performance by the Purchaser of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except those consents, approvals,
notices, registrations or other actions as have already been obtained, given or
made;
(e) this Agreement has been duly executed and delivered by the
Purchaser and, assuming due authorization, execution and delivery by the
Mortgage Loan Seller, constitutes a valid and binding obligation of the
Purchaser enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to the
knowledge of the Purchaser, threatened against the Purchaser, before or by any
court, administrative agency, arbitrator or governmental body (i) with respect
to any of the transactions contemplated by this Agreement or (ii) with respect
to any other matter which in the judgment of the Purchaser will be determined
adversely to the Purchaser and will if determined adversely to the Purchaser
materially and adversely affect the Purchaser's ability to perform its
obligations under this Agreement; and the Purchaser is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement; and
(g) the Purchaser's Information (as defined in Section 13(b) hereof)
does not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
SECTION 10.CONDITIONS TO CLOSING.
(a) The obligations of the Purchaser under this Agreement will be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:
(1) Each of the obligations of the Mortgage Loan
Seller required to be performed at or prior to the Closing
Date pursuant to the terms of this Agreement shall have been
duly performed and complied with in all material respects; all
of the representations and warranties of the Mortgage Loan
Seller under this Agreement shall be true and correct as of
the date or dates specified in all material respects; and no
event shall have occurred which, with notice or the passage of
time, would constitute a default under this Agreement or the
Sale and Servicing Agreement; and the Purchaser shall have
received certificates to that effect signed by authorized
officers of the Mortgage Loan Seller.
(2) The Purchaser shall have received all of the
following closing documents, in such forms as are agreed upon
and reasonably acceptable to the Purchaser, duly executed by
all signatories (other than the Purchaser) as required
pursuant to the respective terms thereof:
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(i) If required pursuant to Section 3 hereof, the Amendment
dated as of the Closing Date and any documents referred to therein;
(ii) If required pursuant to Section 3 hereof, the Final
Mortgage Loan Schedule containing the information set forth on Exhibit
2 hereto, one copy to be attached to each counterpart of the Amendment;
(iii) The Trust Agreement, in form and substance reasonably
satisfactory to the Purchaser, and all documents required thereby duly
executed by all signatories;
(iv) The Sale and Servicing Agreement, in form and substance
reasonably satisfactory to the Indenture Trustee, the Issuer and the
Purchaser, and all documents required thereby duly executed by all
signatories;
(v) The Indenture, in form and substance reasonably
satisfactory to the Indenture Trustee, the Issuer and the Purchaser,
and all documents required thereby duly executed by all signatories;
(vi) A certificate of an officer of the Mortgage Loan Seller
dated as of the Closing Date, in a form reasonably acceptable to the
Purchaser, and attached thereto the resolutions of the Mortgage Loan
Seller authorizing the transactions contemplated by this Agreement,
together with copies of the charter and by-laws of the Mortgage Loan
Seller;
(vii) One or more opinions of counsel from the Mortgage Loan
Seller's counsel otherwise in form and substance reasonably
satisfactory to the Purchaser, the Issuer the Indenture Trustee and the
Rating Agency;
(viii) A letter from the Rating Agency giving each Class of
Notes set forth on Schedule A the rating set forth on Schedule A; and
(ix) Such other documents, certificates (including additional
representations and warranties) and opinions as may be reasonably
necessary to secure the intended ratings from the Rating Agency for the
Notes.
(3) The Notes to be sold to Bear ▇▇▇▇▇▇▇ pursuant to the
Underwriting Agreement and the Certificates to be sold to Bear ▇▇▇▇▇▇▇
pursuant to the Purchase Agreement shall have been issued and sold to
Bear ▇▇▇▇▇▇▇.
(4) The Mortgage Loan Seller shall have furnished to the
Purchaser such other certificates of its officers or others and such
other documents and opinions of counsel to evidence fulfillment of the
conditions set forth in this Agreement and the transactions
contemplated hereby as the Purchaser and its counsel may reasonably
request.
(b) The obligations of the Mortgage Loan Seller under this Agreement
shall be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
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(1) The obligations of the Purchaser required to be performed
by it on or prior to the Closing Date pursuant to the terms of
this Agreement shall have been duly performed and complied
with in all material respects, and all of the representations
and warranties of the Purchaser under this Agreement shall be
true and correct in all material respects as of the date
hereof and as of the Closing Date, and no event shall have
occurred which would constitute a breach by it of the terms of
this Agreement, and the Mortgage Loan Seller shall have
received a certificate to that effect signed by an authorized
officer of the Purchaser.
(2) The Mortgage Loan Seller shall have received copies of all
of the following closing documents, in such forms as are
agreed upon and reasonably acceptable to the Mortgage Loan
Seller, duly executed by all signatories other than the
Mortgage Loan Seller as required pursuant to the respective
terms thereof:
(i) If required pursuant to Section 3 hereof, the Amendment
dated as of the Closing Date and any documents referred to
therein;
(ii) The Trust Agreement, in form and substance reasonably
satisfactory to the Mortgage Loan Seller, and all documents
required thereby duly executed by all signatories;
(iii) The Sale and Servicing Agreement, in form and substance
reasonably satisfactory to the Mortgage Loan Seller, and all
documents required thereby duly executed by all signatories;
(iv) The Indenture, in form and substance reasonably
satisfactory to the Mortgage Loan Seller, and all documents
required thereby duly executed by all signatories;
(v) A certificate of an officer of the Purchaser dated as of
the Closing Date, in a form reasonably acceptable to the
Mortgage Loan Seller, and attached thereto the resolutions of
the Purchaser authorizing the transactions contemplated by
this Agreement and the Sale and Servicing Agreement, together
with copies of the Purchaser's articles of incorporation, and
evidence as to the good standing of the Purchaser dated as of
a recent date;
(vi) One or more opinions of counsel from the Purchaser's
counsel in form and substance reasonably satisfactory to the
Mortgage Loan Seller;
(vii) Such other documents, certificates (including additional
representations and warranties) and opinions as may be
reasonably necessary to secure the intended rating from the
Rating Agency for the Notes;
SECTION 11.FEES AND EXPENSES. Subject to Section 16 hereof,
the Mortgage Loan Seller shall pay on the Closing Date or such later date as may
be agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan
Seller's attorneys and the reasonable fees and expenses of the Purchaser's
attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the fee
for the use of Purchaser's Registration Statement based on the aggregate
original principal amount of the
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Certificates and the filing fee of the Commission as in effect on the date on
which the Registration Statement was declared effective, (iv) the fees and
expenses including counsel's fees and expenses in connection with any "blue sky"
and legal investment matters, (v) the fees and expenses of the Indenture Trustee
which shall include without limitation the fees and expenses of the Indenture
Trustee (and the fees and disbursements of its counsel) with respect to (A)
legal and document review of this Agreement, the Trust Agreement, the Indenture,
the Sale and Servicing Agreement, the Notes and related agreements, (B)
attendance at the Closing and (C) review of the Mortgage Loans to be performed
by the Indenture Trustee, (vi) the expenses for printing or otherwise
reproducing the Notes, the Prospectus and the Prospectus Supplement, (vii) the
fees and expenses of the Rating Agency (both initial and ongoing), (viii) the
fees and expenses relating to the preparation and recordation of mortgage
assignments (including intervening assignments, if any and if available, to
evidence a complete chain of title from the originator to the Indenture Trustee)
from the Mortgage Loan Seller to the Indenture Trustee or the expenses relating
to the Opinion of Counsel referred to in Section 6(a) hereof, as the case may
be, and (ix) Mortgage File due diligence expenses and other out-of-pocket
expenses incurred by the Purchaser in connection with the purchase of the
Mortgage Loans and by Bear ▇▇▇▇▇▇▇ in connection with the sale of the Notes and
the Certificates. The Mortgage Loan Seller additionally agrees to pay directly
to any third party on a timely basis the fees provided for above which are
charged by such third party and which are billed periodically.
SECTION ▇▇.▇▇▇▇▇▇▇▇▇▇▇' LETTERS.
(a) Deloitte & Touche LLP will review the characteristics of a sample
of the Mortgage Loans described in the Final Mortgage Loan Schedule and will
compare those characteristics to the description of the Mortgage Loans contained
in the Prospectus Supplement under the captions "Summary of Prospectus
Supplement--The Mortgage Loans" and "The Mortgage Pool" and in Schedule A
thereto. The Mortgage Loan Seller will cooperate with the Purchaser in making
available all information and taking all steps reasonably necessary to permit
such accountants to complete the review and to deliver the letters required of
them under the Underwriting Agreement. Deloitte & Touche LLP will also confirm
certain calculations as set forth under the caption "Yield On The Notes" in the
Prospectus Supplement.
(b) To the extent statistical information with respect to the Master
Servicer's or a Servicer's servicing portfolio is included in the Prospectus
Supplement under the caption "The Master Servicer and the Servicer," a letter
from the certified public accountant for the Master Servicer and such Servicer
or Servicers will be delivered to the Purchaser dated the date of the Prospectus
Supplement, in the form previously agreed to by the Mortgage Loan Seller and the
Purchaser, with respect to such statistical information.
SECTION 13.INDEMNIFICATION.
(a) The Mortgage Loan Seller shall indemnify and hold harmless the
Purchaser and its directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage or
liability or action in respect thereof, to which they or any of them may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon (i) any untrue
statement of a material fact contained in the MORTGAGE LOAN SELLER'S INFORMATION
as identified in EXHIBIT 3, the omission to state in the
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Prospectus Supplement or Prospectus (or any amendment thereof or supplement
thereto approved by the Mortgage Loan Seller and in which additional Mortgage
Loan Seller's Information is identified), in reliance upon and in conformity
with Mortgage Loan Seller's Information a material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances in which they were made, not misleading, (ii) any representation
or warranty assigned or made by the Mortgage Loan Seller in Section 7 or Section
8 hereof being, or alleged to be, untrue or incorrect, or (iii) any failure by
the Mortgage Loan Seller to perform its obligations under this Agreement; and
the Mortgage Loan Seller shall reimburse the Purchaser and each other
indemnified party for any legal and other expenses reasonably incurred by them
in connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action.
The foregoing indemnity agreement is in addition to any liability which
the Mortgage Loan Seller otherwise may have to the Purchaser or any other such
indemnified party.
(b) The Purchaser shall indemnify and hold harmless the Mortgage Loan
Seller and its respective directors, officers and controlling persons (as
defined in Section 15 of the Securities Act) from and against any loss, claim,
damage or liability or action in respect thereof, to which they or any of them
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon (i) any
untrue statement of a material fact contained in the PURCHASER'S INFORMATION as
identified in EXHIBIT 4, the omission to state in the Prospectus Supplement or
Prospectus (or any amendment thereof or supplement thereto approved by the
Purchaser and in which additional Purchaser's Information is identified), in
reliance upon and in conformity with the Purchaser's Information, a material
fact required to be stated therein or necessary to make the statements therein
in light of the circumstances in which they were made, not misleading, (ii) any
representation or warranty made by the Purchaser in Section 9 hereof being, or
alleged to be, untrue or incorrect, or (iii) any failure by the Purchaser to
perform its obligations under this Agreement; and the Purchaser shall reimburse
the Mortgage Loan Seller, and each other indemnified party for any legal and
other expenses reasonably incurred by them in connection with investigating or
defending or preparing to defend any such loss, claim, damage, liability or
action. The foregoing indemnity agreement is in addition to any liability which
the Purchaser otherwise may have to the Mortgage Loan Seller, or any other such
indemnified party,
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 13 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it may have
otherwise). In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent it
may elect by written notice delivered to the indemnified party promptly (but, in
any event, within 30 days) after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
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such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action, or
(iii) such indemnified party or parties shall have reasonably concluded that
there is a conflict of interest between itself or themselves and the
indemnifying party in the conduct of the defense of any claim or that the
interests of the indemnified party or parties are not substantially co-
extensive with those of the indemnifying party (in which case the indemnifying
parties shall not have the right to direct the defense of such action on behalf
of the indemnified party or parties), in any of which events such fees and
expenses shall be borne by the indemnifying parties (PROVIDED, HOWEVER, that the
indemnifying party shall be liable only for the fees and expenses of one counsel
in addition to one local counsel in the jurisdiction involved. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement or any claim or action effected without its written
consent; PROVIDED, HOWEVER, that such consent was not unreasonably withheld.
(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 13 shall for any reason be unavailable to an indemnified party in
respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to in Section 13, then the indemnifying party shall in lieu of
indemnifying the indemnified party contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, in such proportion as shall be appropriate to reflect
the relative benefits received by the Mortgage Loan Seller on the one hand and
the Purchaser on the other from the purchase and sale of the Mortgage Loans, the
offering of the Notes and the Certificates and the other transactions
contemplated hereunder. No person found liable for a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not also found liable
for such fraudulent misrepresentation.
(e) The parties hereto agree that reliance by an indemnified party on
any publicly available information or any information or directions furnished by
an indemnifying party shall not constitute negligence, bad faith or willful
misconduct by such indemnified party.
SECTION 14.NOTICES. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to EMC Mortgage Corporation, Mac ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Telecopy: (972-444-2880)), and notices to
the Purchaser shall be directed to Structured Asset Mortgage Investments II
Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Telecopy: (212-272-7206)),
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇; or to any other address as may hereafter be
furnished by one party to the other party by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on the
date received at the premises of the addressee (as evidenced, in the case of
registered or certified mail, by the date noted on the return receipt) provided
that it is received on a business day during normal business hours and, if
received after normal business hours, then it shall be deemed to be received on
the next business day.
SECTION 15.TRANSFER OF MORTGAGE LOANS. The Purchaser retains
the right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Issuer, with the
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understanding that the Issuer will then assign such rights to the Indenture
Trustee pursuant to the Indenture, without the consent of the Mortgage Loan
Seller, and, upon such assignment, the Indenture Trustee, as the ultimate
assignee, shall succeed to the applicable rights and obligations of the
Purchaser hereunder; PROVIDED, HOWEVER, the Purchaser shall remain entitled to
the benefits set forth in Sections 11, 13 and 17 hereto and as provided in
Section 2(a). Notwithstanding the foregoing, the sole and exclusive right and
remedy of the Issuer or the Indenture Trustee with respect to a breach of
representation or warranty of the Mortgage Loan Seller shall be the purchase or
substitution obligations of the Mortgage Loan Seller contained in Sections 5 and
7 hereof.
SECTION 16.TERMINATION. This Agreement may be terminated (a)
by the mutual consent of the parties hereto prior to the Closing Date, (b) by
the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the Mortgage
Loan Seller's obligation to close set forth under Section 10(b) hereof are not
fulfilled as and when required to be fulfilled. In the event of termination
pursuant to clause (b), the Mortgage Loan Seller shall pay, and in the event of
termination pursuant to clause (c), the Purchaser shall pay, all reasonable
out-of- pocket expenses incurred by the other in connection with the
transactions contemplated by this Agreement. In the event of a termination
pursuant to clause (a), each party shall be responsible for its own expenses.
SECTION 17.REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Mortgage Loan
Seller submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser,
delivery by the Purchaser to the Issuer and the pledge by the Issuer to the
Indenture Trustee on behalf of the Noteholders. Subsequent to the delivery of
the Mortgage Loans to the Purchaser, the Mortgage Loan Seller's representations
and warranties contained herein with respect to the Mortgage Loans shall be
deemed to relate to the Mortgage Loans actually delivered to the Purchaser and
included in the Final Mortgage Loan Schedule and any Substitute Mortgage Loan
and not to those Mortgage Loans deleted from the Preliminary Mortgage Loan
Schedule pursuant to Section 3 hereof prior to the Closing.
SECTION 18.SEVERABILITY. If any provision of this Agreement
shall be prohibited or invalid under applicable law, the Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.
SECTION 19.COUNTERPARTS. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.
SECTION 20.AMENDMENT. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.
SECTION 21.GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
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SECTION 22.FURTHER ASSURANCES. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by the Rating Agency.
SECTION 23.SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 13 hereof, Bear
▇▇▇▇▇▇▇, and their directors, officers and controlling persons (within the
meaning of federal securities laws). The Mortgage Loan Seller acknowledges and
agrees that the Purchaser may assign its rights under this Agreement (including,
without limitation, with respect to the Mortgage Loan Seller's representations
and warranties respecting the Mortgage Loans) to Issuer and that the Issuer may
further assign such rights to the Indenture Trustee. Any person into which the
Mortgage Loan Seller may be merged or consolidated (or any person resulting from
any merger or consolidation involving the Mortgage Loan Seller), any person
resulting from a change in form of the Mortgage Loan Seller or any person
succeeding to the business of the Mortgage Loan Seller, shall be considered the
"successor" of the Mortgage Loan Seller hereunder and shall be considered a
party hereto without the execution or filing of any paper or any further act or
consent on the part of any party hereto. Except as provided in the two preceding
sentences, this Agreement cannot be assigned, pledged or hypothecated by either
party hereto without the written consent of the other parties to this Agreement
and any such assignment or purported assignment shall be deemed null and void.
SECTION 24.THE MORTGAGE LOAN SELLER. The Mortgage Loan Seller
will keep in full effect all rights as are necessary to perform their respective
obligations under this Agreement.
SECTION 25.ENTIRE AGREEMENT. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.
SECTION ▇▇.▇▇ PARTNERSHIP. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.
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IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.
EMC MORTGAGE CORPORATION
By:
------------------------------
Name:
Title:
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC.
By:
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
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EXHIBIT 1
---------
CONTENTS OF MORTGAGE FILE
-------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser or its designee, and which shall be delivered to the Purchaser or its
designee pursuant to the terms of the Agreement.
(a) with respect to each Mortgage Loan:
(i) The original Mortgage Note, endorsed without recourse in
blank or to the order of the Indenture Trustee and showing an unbroken
chain of endorsements from the originator thereof to the Person
endorsing it in blank or to the Indenture Trustee, or a lost note
affidavit together with a copy of the related Mortgage Note;
(ii) The original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating
that such Mortgage Loan is a MOM Loan, which shall have been recorded
(or if the original is not available, a copy), with evidence of such
recording indicated thereon (or if the original Security Instrument,
assignments to the Indenture Trustee or intervening assignments thereof
which have been delivered, are being delivered or will, upon receipt of
recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording
and have not been returned to the Seller in time to permit their
recording as specified in Section 2.01(b) of the Sale and Servicing
Agreement, shall be in recordable form);
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is
located) in blank or to "Deutsche Bank National Trust Company, as
Indenture Trustee", with evidence of recording with respect to each
Mortgage Loan in the name of the Indenture Trustee thereon (or if (A)
the original Security Instrument, assignments to the Indenture Trustee
or intervening assignments thereof which have been delivered, are being
delivered or will, upon receipt of recording information relating to
the Security Instrument required to be included thereon, be delivered
to recording offices for recording and have not been returned to the
Seller in time to permit their delivery as specified in Section 2.01(b)
of the Sale and Servicing Agreement, the Seller may deliver a true copy
thereof with a certification by the Seller, on the face of such copy,
substantially as follows: "Certified to be a true and correct copy of
the original, which has been transmitted for recording" or (B) the
related Mortgaged Property is located in a state other than Maryland
and an Opinion of Counsel has been provided as set forth in Section
2.01(b) of the Sale and Servicing Agreement, shall be in recordable
form);
(iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent available to the Mortgage Loan
Seller with evidence of recording thereon;
(v) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any;
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(vi) the original or copy of the policy of title insurance or
mortgagee's certificate of title insurance or commitment or binder for
title insurance; and
(vii) originals of all modification agreements, if applicable
and available.
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EXHIBIT 2
---------
MORTGAGE LOAN SCHEDULE INFORMATION
----------------------------------
The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:
(a) the loan number;
(b) the Mortgagor's name;
(c) the street address (including city, state and zip code) of the Mortgaged
Property;
(d) the property type;
(e) the Mortgage Interest Rate;
(f) the Servicing Rate;
(g) the Net Rate;
(h) the original term to maturity;
(i) the maturity date;
(j) the stated remaining term to maturity;
(k) the original principal balance;
(1) the first payment date;
(m) the Monthly Payment in effect as of the Cut-off Date;
(n) the Cut-off Date Principal Balance;
(o) the Loan-to-Value Ratio at origination;
(p) the paid-through date of the Mortgage Loan;
(q) the insurer of any Primary Mortgage Insurance Policy;
(r) the Index and Gross Margin, if applicable;
(s) the Maximum Lifetime Mortgage Rate, if applicable;
(t) the Minimum Lifetime Mortgage Rate, if applicable;
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(u) the Adjustment Date frequency, if applicable; and
(u) the number of days delinquent, if any.
Such schedule also shall set forth the total number of Mortgage Loans, the total
of each of the amounts described under (k) and (n) above for all of the Mortgage
Loans, the weighted average by principal balance as of the Cut-off Date of each
of the rates described under (e), (f) and (g) above for all of the Mortgage
Loans, and the weighted average remaining term to maturity by unpaid principal
balance as of the Cut-off Date for all of the Mortgage Loans.
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EXHIBIT 3
---------
MORTGAGE LOAN SELLER'S INFORMATION
----------------------------------
All information in the Prospectus Supplement described under the
following Sections: "SUMMARY OF PROSPECTUS SUPPLEMENT -- The Mortgage Loans,"
"THE MORTGAGE POOL" and "SCHEDULE A -- CERTAIN CHARACTERISTICS OF THE MORTGAGE
LOANS."
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EXHIBIT 4
---------
PURCHASER'S INFORMATION
-----------------------
All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.
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EXHIBIT 5
---------
SCHEDULE OF LOST NOTES
----------------------
Available Upon Request
H-E-5
SCHEDULE A
----------
REQUIRED RATINGS FOR EACH CLASS OF NOTES
----------------------------------------
NOTES
Class S&P
--------------------------- ------------------------------
Class A................... AAA
Class M-1................. AA
Class M-2................. A
None of the above ratings has been lowered since the respective dates of such
letters.
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SCHEDULE B
----------
MORTGAGE LOAN SCHEDULE
----------------------
[Provided upon request]
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