EXHIBIT 4
Trust Agreement
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GSAA HOME EQUITY TRUST 2005-12
ASSET-BACKED CERTIFICATES
SERIES 2005-12
MASTER SERVICING
and
TRUST AGREEMENT
among
GS MORTGAGE SECURITIES CORP.,
Depositor,
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
▇▇▇▇▇ FARGO BANK, N.A.
and
DEUTSCHE BANK NATIONAL TRUST COMPANY
and
▇.▇. ▇▇▇▇▇▇ TRUST COMPANY, NATIONAL ASSOCIATION,
Custodians
and
▇▇▇▇▇ FARGO BANK, N.A.,
Master Servicer and Securities Administrator
Dated October 1, 2005
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions..................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by the Custodians of the Mortgage Loans...........
Section 2.03 Execution and Delivery of Certificates.......................
Section 2.04 REMIC Matters................................................
Section 2.05 Representations and Warranties of the Depositor..............
Section 2.06 Representations and Warranties of JPMorgan...................
Section 2.07 Representations and Warranties of Deutsche Bank..............
Section 2.08 Representations and Warranties of ▇▇▇▇▇ Fargo................
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account............
Section 3.02 Investment of Funds in the Distribution Account..............
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution...................................
Section 4.02 Monthly Statements to Certificateholders.....................
Section 4.03 Allocation of Applied Realized Loss Amounts..................
Section 4.04 Certain Matters Relating to the Determination of LIBOR.......
Section 4.05 Certain Matters Regarding the Class AF-3W Certificate
Insurer.....................................................
Section 4.06 Claims Upon the Class AF-3W Certificate Insurance Policy;
Policy Payments Account.....................................
Section 4.07 Effect of Payments by Class AF-3W Certificate Insurer;
Subrogation.................................................
Section 4.08 Notices to Class AF-3W Certificate Insurer...................
Section 4.09 Securities Administrator To Hold Class AF-3W Certificate
Insurance Policy............................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.............................................
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates....................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............
Section 5.04 Persons Deemed Owners........................................
Section 5.05 Access to List of Certificateholders' Names and Addresses....
Section 5.06 Maintenance of Office or Agency..............................
Section 5.07 Rights of the Class AF-3W Certificate Insurer to Exercise
Rights of Class AF-3W Certificateholders....................
Section 5.08 Class AF-3W Certificate Insurer Default......................
ARTICLE VI
THE DEPOSITOR
Section 6.01 Respective Liabilities of the Depositor......................
Section 6.02 Merger or Consolidation of the Depositor.....................
Section 6.03 Limitation on Liability of the Depositor and Others..........
Section 6.04 Servicing Compliance Review..................................
Section 6.05 Option to Purchase Defaulted Mortgage Loans..................
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Master Servicer to Act; Appointment of Successor.............
Section 7.03 Master Servicer to Act as Servicer...........................
Section 7.04 Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIANS
Section 8.01 Duties of the Trustee and the Custodians.....................
Section 8.02 Custodial Responsibilities...................................
Section 8.03 Certain Matters Affecting the Trustee and the Custodians.....
Section 8.04 Trustee and Custodians Not Liable for Certificates or
Mortgage Loans..............................................
Section 8.05 Trustee and Securities Administrator May Own Certificates....
Section 8.06 Trustee's Fees and Expenses..................................
Section 8.07 Eligibility Requirements for the Trustee.....................
Section 8.08 Resignation and Removal of the Trustee.......................
Section 8.09 Successor Trustee............................................
Section 8.10 Merger or Consolidation of the Trustee or the Custodians.....
Section 8.11 Appointment of Co-Trustee or Separate Trustee................
Section 8.12 Tax Matters..................................................
Section 8.13 Periodic Filings.............................................
Section 8.14 Tax Classification of the Excess Reserve Fund Account........
Section 8.15 Resignation of Custodian; Limitation on Liability............
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicer's
Obligations.................................................
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance...................................................
Section 9.03 Representations and Warranties of the Master Servicer........
Section 9.04 Master Servicer Events of Default............................
Section 9.05 Waiver of Default............................................
Section 9.06 Successor to the Master Servicer.............................
Section 9.07 Compensation of the Master Servicer..........................
Section 9.08 Merger or Consolidation......................................
Section 9.09 Resignation of the Master Servicer...........................
Section 9.10 Assignment or Delegation of Duties by the Master Servicer....
Section 9.11 Limitation on Liability of the Master Servicer...............
Section 9.12 Indemnification; Third Party Claims..........................
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator...........................
Section 10.02 Certain Matters Affecting the Securities Administrator.......
Section 10.03 Securities Administrator Not Liable for Certificates or
Mortgage Loans..............................................
Section 10.04 Securities Administrator May Own Certificates................
Section 10.05 Securities Administrator's Fees and Expenses.................
Section 10.06 Eligibility Requirements for Securities Administrator........
Section 10.07 Resignation and Removal of Securities Administrator..........
Section 10.08 Successor Securities Administrator...........................
Section 10.09 Merger or Consolidation of Securities Administrator..........
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator...............................................
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the Mortgage
Loans.......................................................
Section 11.02 Final Distribution on the Certificates.......................
Section 11.03 Additional Termination Requirements..........................
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment....................................................
Section 12.02 Recordation of Agreement; Counterparts.......................
Section 12.03 Governing Law................................................
Section 12.04 Intention of Parties.........................................
Section 12.05 Notices......................................................
Section 12.06 Severability of Provisions...................................
Section 12.07 Limitation on Rights of Certificateholders...................
Section 12.08 Certificates Nonassessable and Fully Paid....................
Section 12.09 Third Party Beneficiary......................................
Section 12.10 Waiver of Jury Trial.........................................
SCHEDULES
Schedule I Mortgage Loan Schedule
EXHIBITS
EXHIBIT A Form of Class A, Class M and Class B Certificates
EXHIBIT B Form of Class P Certificate
EXHIBIT C Form of Request for Release
EXHIBIT D Form of Class R-1 and R-2 Certificates
EXHIBIT E Form of Class X Certificate
EXHIBIT F Form of Initial Certification of Custodian
EXHIBIT G Form of Document Certification and Exception Report of Custodian
EXHIBIT H Form of Residual Transfer Affidavit
EXHIBIT I Form of Transferor Certificate
EXHIBIT J Form of Rule 144A Letter
EXHIBIT K Form of Certification to be Provided with Form 10-K
EXHIBIT L Form of Master Servicer Certification to be Provided to Depositor
EXHIBIT M Master Seller's Warranties and Servicing Agreement, dated August
1, 2004, as amended by Amendment No. 1, dated as of April 26, 2005,
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and ▇▇▇▇▇ Fargo Bank, N.A.
EXHIBIT N Master Mortgage Loan Purchase and Interim Servicing Agreement,
dated March 24, 2004, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and
First National Bank of Nevada
EXHIBIT O Flow Servicing Rights Purchase and Servicing Agreement, dated
August 22, 2005, between ▇▇▇▇▇▇▇ Sachs Mortgage Company and M&T
Mortgage Corporation
EXHIBIT P Form of Master Loan Purchase Agreement, between various sellers
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
EXHIBIT Q Flow Servicing Agreement, dated May 1, 2005, between ▇▇▇▇▇▇▇
Sachs Mortgage Company and Countrywide Home Loans Servicing LP
EXHIBIT R Representations and Warranties Agreement, dated as of October 28,
2005, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and GS Mortgage
Securities Corp.
THIS MASTER SERVICING AND TRUST AGREEMENT, dated as of October 1,
2005 (this "Agreement"), is hereby executed by and among GS MORTGAGE SECURITIES
CORP., a Delaware corporation (the "Depositor"), HSBC BANK USA, NATIONAL
ASSOCIATION, as trustee (in such capacity, the "Trustee"), ▇▇▇▇▇ FARGO BANK,
N.A. ("▇▇▇▇▇ Fargo"), as a custodian, DEUTSCHE BANK NATIONAL TRUST COMPANY
("Deutsche Bank"), as a custodian, ▇.▇. ▇▇▇▇▇▇ TRUST COMPANY, NATIONAL
ASSOCIATION ("JPMorgan"), as a custodian (▇▇▇▇▇ Fargo, Deutsche Bank and
JPMorgan, each a "Custodian" and together the "Custodians") and ▇▇▇▇▇ FARGO
BANK, N.A., as master servicer (in such capacity, the "Master Servicer") and as
securities administrator (in such capacity, the "Securities Administrator").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Securities Administrator on behalf of the Trust shall elect that
two segregated asset pools within the Trust Fund be treated for federal income
tax purposes as comprising two REMICs (each, a "Trust REMIC" or, in the
alternative, the "Lower-Tier REMIC" and the "Upper-Tier REMIC", respectively).
The Class X Interest and each Class of Principal Certificates (other than the
right of each Class of Principal Certificates to receive Basis Risk Carry
Forward Amounts), represents ownership of a regular interest in the Upper-Tier
REMIC for purposes of the REMIC Provisions. The Class R-1 Certificates represent
ownership of the sole class of residual interest in the Upper-Tier REMIC, and
the Class R-2 Certificates represent ownership of the sole class of residual
interest in the Lower-Tier REMIC for purposes of the REMIC Provisions. The
Startup Day for each REMIC described herein is the Closing Date. The latest
possible maturity date for each Certificate is the latest date referenced in
Section 2.04. The Upper-Tier REMIC shall hold as assets the several classes of
uncertificated Lower-Tier Regular Interests, set out below. The Lower-Tier REMIC
shall hold as assets the assets described in the definition of "Trust Fund"
herein (other than the Prepayment Premiums and the Excess Reserve Fund Account).
Each such Lower-Tier Regular Interest is hereby designated as a regular interest
in the Lower-Tier REMIC. The Class LT-AV-1, Class LT-AF-2, Class LT-AF-3, Class
LT-AF-3W, Class LT-AF-4, Class LT-AF-5, Class LT-AF-6, Class LT-M-1, Class
LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1,
Class LT-B-2, Class LT-B-3 and Class LT-B-4 Interests are hereby designated the
LT-Accretion Directed Classes (the "LT Accretion Directed Classes"). The Class P
Certificates represent beneficial ownership of the Prepayment Premiums, each
Class of Principal Certificates represents a beneficial ownership of a regular
interest in the Upper-Tier REMIC and the right to receive Basis Risk Carry
Forward Amounts, the Class R-2 Certificates represent beneficial ownership of
the right to receive payment of the Fair Market Value Excess, on or after the
Optional Termination Date, by the Master Servicer of all Mortgage Loans (and REO
Properties) and the Class X Interest represents beneficial ownership of a
regular interest in the Upper-Tier REMIC and the Excess Reserve Fund Account,
which portions of the Trust Fund shall be treated as a grantor trust.
Lower-Tier Corresponding
Lower-Tier Interest Interest Initial Lower-Tier Principal Upper-Tier
Designation Rate Amount REMIC Class
--------------------- ----------- ------------------------------ ---------------
Class LT-AV-1 (1) 1/2 initial Class Certificate AV-1
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-AF-2 (1) 1/2 initial Class Certificate AF-2
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-AF-3 (1) 1/2 initial Class Certificate AF-3
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-AF-3W (1) 1/2 initial Class Certificate AF-3W
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-AF-4 (1) 1/2 initial Class Certificate AF-4
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-AF-5 (1) 1/2 initial Class Certificate AF-5
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-AF-6 (1) 1/2 initial Class Certificate AF-6
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-1 (1) 1/2 initial Class Certificate M-1
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-2 (1) 1/2 initial Class Certificate M-2
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-3 (1) 1/2 initial Class Certificate M-3
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-4 (1) 1/2 initial Class Certificate M-4
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-5 (1) 1/2 initial Class Certificate M-5
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-6 (1) 1/2 initial Class Certificate M-6
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-B-1 (1) 1/2 initial Class Certificate B-1
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-B-2 (1) 1/2 initial Class Certificate B-2
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-B-3 (1) 1/2 initial Class Certificate B-3
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-B-4 (1) 1/2 initial Class Certificate B-4
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal
Balance plus 1/2
Overcollateralized Amount,
less aggregate initial Lower
Tier Principal Amounts of
Class LT-Group I and
Class LT-Group II Interests
------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap (without
reduction for the Premium Rate).
The Lower-Tier REMIC shall hold as assets all of the assets included
in the Trust Fund, other than the Prepayment Premiums and the Excess Reserve
Fund Account.
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount shall be payable as a reduction of the Lower-Tier
Principal Amount of the LT-Accretion Directed Classes (each such Class will be
reduced by an amount equal to 50% of any increase in the Overcollateralized
Amount that is attributable to a reduction in the Class Certificate Balance of
its Corresponding Class) and shall be accrued and added to the Lower-Tier
Principal Amount of the Class LT-Accrual Interest. On each Distribution Date,
the increase in the Lower-Tier Principal Amount of the Class LT-Accrual Interest
may not exceed interest accruals for such Distribution Date for the Class
LT-Accrual Interest. In the event that: (i) 50% of the increase in the
Overcollateralized Amount exceeds (ii) interest accruals on the Class LT-Accrual
Interest for such Distribution Date, the excess for such Distribution Date
(accumulated with all such excesses for all prior Distribution Dates) will be
added to any increase in the Overcollateralized Amount for purposes of
determining the amount of interest accrual on the Class LT-Accrual Interest
payable as principal on the LT-Accretion Directed Classes on the next
Distribution Date pursuant to the first sentence of this paragraph. All payments
of scheduled principal and prepayments of principal generated by the Mortgage
Loans or paid under the Class AF-3W Certificate Insurance Policy and all
Subsequent Recoveries shall be allocated (i) 50% to the Class LT-Accrual
Interest and (ii) 50% to the LT-Accretion Directed Classes (principal payments
and Subsequent Recoveries shall be allocated among such LT-Accretion Directed
Classes in an amount equal to 50% of the principal amounts allocated to their
respective Corresponding Classes), until paid in full. Notwithstanding the
above, principal payments allocated to the Class X Interest that result in the
reduction in the Overcollateralized Amount shall be allocated to the Class
LT-Accrual Interest (until paid in full). Realized Losses shall be applied so
that after all distributions have been made on each Distribution Date (i) the
Lower-Tier Principal Amount of each of the LT-Accretion Directed Classes is
equal to 50% of the Class Certificate Balance of its Corresponding Class, and
(ii) the Class LT-Accrual Interest is equal to 50% of the aggregate Stated
Principal Balance of the Mortgage Loans plus 50% of the Overcollateralized
Amount. Any increase in the Class Certificate Balance of a Class of LIBOR
Certificates as a result of a Subsequent Recovery shall increase the Lower-Tier
Principal Amount of the Corresponding Class of Lower-Tier Regular Interest by
50% of such increase, and the remaining 50% of such increase shall increase the
Lower-Tier Principal Amount of the Class LT-Accrual Interest.
In addition to issuing the Lower-Tier Regular Interests, the
Lower-Tier REMIC shall issue the Class R-2 Certificates, which shall be the sole
class of residual interests in the Lower-Tier REMIC. The Class R-2 Certificates
will be issued as a single certificate in definitive form in a principal amount
of $100 and shall have no interest rate. Amounts received by the Class R-2
Certificates shall be deemed paid from the Lower-Tier REMIC. The Class LT R-2
Interest shall be deemed to receive amounts received by the Class R-2
Certificates.
The Upper-Tier REMIC shall issue the following classes of Upper-Tier
Regular Interests, and each such interest, other than the Class UT-R Interest,
is hereby designated as a regular interest in the Upper-Tier REMIC.
Initial Upper-Tier
Upper-Tier Interest Principal Amount
Rate and and Corresponding Corresponding
Upper-Tier Corresponding Class Certificate Class of
Class Designation Class Pass-Through Rate Balance Certificates
-------------------- ------------------------ ------------------- --------------
Class AV-1 (1) $ 253,054,000 AV-1
Class AF-2 (2) $ 21,174,000 AF-2
Class AF-3 (3) $ 18,492,000 AF-3
Class AF-3W (4) $ 75,000,000 AF-3W
Class AF-4 (5) $ 64,211,000 AF-4
Class AF-5 (6) $ 42,067,000 AF-5
Class AF-6 (7) $ 52,666,000 AF-6
Class M-1 (8) $ 7,105,000 Class M-1(19)
Class M-2 (9) $ 7,105,000 Class M-2(19)
Class M-3 (10) $ 3,979,000 Class M-3(19)
Class M-4 (11) $ 3,694,000 Class M-4(19)
Class M-5 (12) $ 3,694,000 Class M-5(19)
Class M-6 (13) $ 2,842,000 Class M-6(19)
Class B-1 (14) $ 2,558,000 Class B-1
Class B-2 (15) $ 1,989,000 Class B-2
Class B-3 (16) $ 2,842,000 Class B-3
Class B-4 (17) $ 3,126,000 Class B-4
Class X (18) (18) Class X(18)
------------
(1) The Class AV-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) LIBOR plus 0.13000%
and (ii) the WAC Cap.
(2) The Class AF-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) 4.97160% and (ii)
the WAC Cap.
(3) The Class AF-3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) 5.06940% and (ii)
the WAC Cap.
(4) The Class AF-3W Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) 4.99900% and (ii)
the WAC Cap.
(5) The Class AF-4 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) 5.34387% and (ii)
the WAC Cap.
(6) The Class AF-5 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 5.65845% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean up
call is exercisable, the lesser of (i) 6.15845% and (ii) the WAC Cap.
(7) The Class AF-6 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 5.17605% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean up
call is exercisable, the lesser of (i) 5.67605% and (ii) the WAC Cap.
(8) The Class M-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 5.44765% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean up
call is exercisable, the lesser of (i) 5.94765% and (ii) the WAC Cap.
(9) The Class M-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 5.54697% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean up
call is exercisable, the lesser of (i) 6.04697% and (ii) the WAC Cap.
(10) The Class M-3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 5.59657% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean up
call is exercisable, the lesser of (i) 6.19657% and (ii) the WAC Cap.
(11) The Class M-4 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 5.69603% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean up
call is exercisable, the lesser of (i) 6.19603% and (ii) the WAC Cap.
(12) The Class M-5 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 5.79545% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean up
call is exercisable, the lesser of (i) 6.29545% and (ii) the WAC Cap.
(13) The Class M-6 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 5.94437% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean up
call is exercisable, the lesser of (i) 6.44437% and (ii) the WAC Cap.
(14) The Class B-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 6.09089% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean up
call is exercisable, the lesser of (i) 6.59089% and (ii) the WAC Cap.
(15) The Class B-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 6.10000% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean up
call is exercisable, the lesser of (i) 6.60000% and (ii) the WAC Cap.
(16) The Class B-3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 6.10000% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean up
call is exercisable, the lesser of (i) 6.60000% and (ii) the WAC Cap.
(17) The Class B-4 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) 6.10000% and (ii) the WAC Cap
or (b) after the first distribution date on which the optional clean-up
call is exercisable, the lesser of (i) 6.60000% and (ii) the WAC Cap.
(18) The Class X Interest will have a principal balance to the extent of any
Overcollateralized Amount. The Class X Interest will not accrue interest
on such balance but will accrue interest on a notional principal balance.
As of any Distribution Date, the Class X Interest shall have a notional
principal balance equal to the aggregate of the principal balances of the
Lower-Tier Regular Interests as of the first day of the related Interest
Accrual Period. With respect to any Interest Accrual Period, the Class X
Interest shall bear interest at a rate equal to the excess, if any, of the
WAC Cap (without reduction for the Premium Rate) over the product of (i) 2
and (ii) the weighted average Lower-Tier Interest Rate of the Lower-Tier
Regular Interests, where the Lower-Tier Interest Rate on the Class
LT-Accrual Interest is subject to a cap equal to zero and each
LT-Accretion Directed Class is subject to a cap equal to the Pass-Through
Rate on its Corresponding Class; provided, however, that if the
Pass-Through Rate of the Class AF-3W Interest is calculated by reference
to clause (i) of its Pass-Through Rate, the cap with respect to the
LT-AF-3W Interest shall be increased by the lesser of (A) the Premium Rate
and (B) the excess of clause (ii) over clause (i) thereof for purposes of
the calculation. With respect to any Distribution Date, interest that so
accrues on the notional principal balance of the Class X Interest shall be
deferred in an amount equal to any increase in the Overcollateralized
Amount on such Distribution Date. Such deferred interest shall not itself
bear interest. The Class X Certificates will represent beneficial
ownership of the Class X Interest and amounts in the Excess Reserve Fund
Account, subject to the obligation to make payments from the Excess
Reserve Fund Account in respect of Basis Risk Carry Forward Amounts. For
federal income tax purposes, the Securities Administrator will treat the
Class X Certificateholders' obligation to make payments from the Excess
Reserve Fund Account as payments made pursuant to an interest rate cap
contract written by the Class X Certificateholders in favor of each Class
of Principal Certificates. Such rights of the Class X Certificateholders
and Principal Certificateholders shall be treated as held in a portion of
the Trust Fund that is treated as a grantor trust under subpart E, Part I
of subchapter J of the Code.
(19) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account in respect of any
Basis Risk Carry Forward Amounts. For federal income tax purposes, the
Securities Administrator will treat a Certificateholder's right to receive
payments from the Excess Reserve Fund Account as payments made pursuant to
an interest rate cap contract written by the Class X Certificateholders.
In addition to issuing the Upper-Tier Regular Interests, the
Upper-Tier REMIC shall issue the Class R-1 Certificates, which shall be the sole
class of residual interests in the Upper-Tier REMIC. The Class R-1 Certificates
will be issued as a single certificate in definitive form in a principal amount
of $100 and shall have no interest rate. Amounts received by the Class R-1
Certificates shall be deemed paid from the Upper-Tier REMIC.
The foregoing REMIC structure is intended to cause all of the cash
from the Mortgage Loans to flow through to the Upper-Tier REMIC as cash flow on
a REMIC regular interest, without creating any shortfall--actual or potential
(other than for credit losses) to any REMIC regular interest. It is not intended
that the Class R-1 or Class R-2 Certificates be entitled to any cash flow
pursuant to this Agreement except as provided in Section 4.01(a)(ii)(A)(I)(a)
hereunder.
For any purpose for which the Pass-Through Rates are calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the monthly day count convention of the Mortgage
Loans and the monthly day count convention of the regular interests issued by
each of the REMICs. For purposes of calculating the Pass-Through Rates for each
of the interests issued by the Lower-Tier REMIC such rates shall be adjusted to
equal a monthly day count convention based on a 30 day month for each Due Period
and a 360-day year so that the Mortgage Loans and all regular interests will be
using the same monthly day count convention.
The minimum denomination for each Class of the Offered Certificates
will be $50,000 initial Certificate Balance, with integral multiples of $1 in
excess thereof except that one Certificate in each Class may be issued in a
different amount. The minimum denomination for (a) the Class R-1 and Class R-2
Certificates will each be $100 and each will be a 100% Percentage Interest in
such Class and (b) the Class P and X Certificates will be a 1% Percentage
Interest in each such Class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates All Classes of Certificates other than the
Physical Certificates.
Class A Certificates The Class AV-1, Class AF-2, Class AF-3, Class
AF-3W, Class AF-4, Class AF-5 and Class AF-6,
collectively.
Class B Certificates The Class B-1, Class B-2, Class B-3 and Class
B-4, collectively.
Class M Certificates The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6, collectively.
Class R Certificates The Class R-1 and Class R-2 Certificates,
collectively.
ERISA-Restricted The Class B-4 Certificates, the Physical
Certificates Certificates and any Certificate with a rating
below the lowest applicable permitted rating
under the Underwriters' Exemption.
Fixed Rate Certificates The Class AF-2, Class AF-3, Class AF-3W, Class
AF-4, Class AF-5, Class AF-6, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class B-1, Class B-2, Class B-3 and Class
B-4 Certificates, collectively.
LIBOR Certificates The Class AV-1 Certificates.
Offered Certificates All Classes of Certificates other than the
Private Certificates.
Physical Certificates The Class P, Class X and Class R Certificates.
Principal Certificates Fixed Rate Certificates and LIBOR
Certificates.
Private Certificates Class B-4, Class P and Class X Certificates.
Rating Agencies ▇▇▇▇▇'▇ and S&P.
Regular Certificates All Classes of Certificates other than the
Class R Certificates.
Residual Certificates The Class R Certificates.
Subordinated Certificates The Class M and Class B Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Capitalized terms used herein but not
defined herein shall have the meanings given them in the applicable Servicing
Agreement or Sale Agreement. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect to
which any portion of a Monthly Payment is, as of the last day of the prior Due
Period, two months or more past due (without giving effect to any grace period),
each Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for
which the Mortgagor has filed for bankruptcy.
Account: Any of the Distribution Account, the Policy Payments
Account or the Excess Reserve Fund Account. Each Account shall be an Eligible
Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of Principal Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.02. The term "Accrued
Certificate Interest" as used in the Class AF-3W Certificate Insurance Policy
has the same meaning as the term "Accrued Certificate Interest Distribution
Amount" used herein.
Adjusted Net Mortgage Interest Rate: As to each Mortgage Loan and at
any time, the per annum rate equal to the Mortgage Interest Rate less the
Expense Fee Rate and solely for the purpose of determining the Pass-Through Rate
on the Class AF-3W Certificates, the Premium Rate.
Advance: Any Monthly Advance or Servicing Advance.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Master Servicing and Trust Agreement and all
amendments or supplements hereto.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
Principal Certificates after distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
Assignment Agreement: A Step 1 Assignment Agreement or a Step 2
Assignment Agreement.
Assignment of Mortgage: An executed assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form (other than the
assignee's name and recording information not yet returned from the recording
office), reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Master Servicer (x) the sum of
(without duplication) (i) all scheduled installments of interest (net of the
related Expense Fees) and principal due on the Due Date on such Mortgage Loans
in the related Due Period and received on or prior to the related Determination
Date, together with any Monthly Advances in respect thereof; (ii) all
Condemnation Proceeds, Insurance Proceeds and Liquidation Proceeds received
during the related Principal Prepayment Period (in each case, net of
unreimbursed expenses incurred in connection with a liquidation or foreclosure
and unreimbursed Advances, if any); (iii) all partial or full prepayments
(excluding Prepayment Premiums) on the Mortgage Loans received during the
related Principal Prepayment Period together with all Compensating Interest paid
in connection therewith; (iv) all amounts received with respect to such
Distribution Date in connection with a purchase or repurchase of a Deleted
Mortgage Loan; (v) all amounts received with respect to such Distribution Date
as a Substitution Adjustment Amount received in connection with the substitution
of a Mortgage Loan; and (vi) all proceeds received with respect to the
termination of the Trust Fund pursuant to clause (a) of Section 11.01; reduced
by (y) all amounts in reimbursement for Monthly Advances and Servicing Advances
previously made with respect to the Mortgage Loans, and other amounts as to
which the Servicers, the Depositor, the Master Servicer, the Securities
Administrator, the Trustee (or co-trustee) or the Custodians are entitled to be
paid or reimbursed pursuant to this Agreement.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Principal Remittance Amount
for such Distribution Date over (ii) the Excess Overcollateralized Amount, if
any, for such Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of
Principal Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Principal Certificates
is based upon the WAC Cap, the excess, if any, of (i) the Accrued Certificate
Interest Distribution Amount on such Class of Certificates would otherwise be
entitled to receive on such Distribution Date had such Pass-Through Rate not
been subject to the WAC Cap, over (ii) the Accrued Certificate Interest
Distribution Amount payable on such Class of Certificates received on such
Distribution Date taking into account the WAC Cap and (B) the Basis Risk Carry
Forward Amount for such Class of Certificates for all previous Distribution
Dates not previously paid, together with interest thereon at a rate equal to the
applicable Pass-Through Rate for such Class of Certificates for such
Distribution Date, without giving effect to the WAC Cap).
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk Carry Forward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments).
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of New
York or California, (b) the State in which a Servicer's servicing operations are
located, or (c) the State in which the Trustee's operations are located, are
authorized or obligated by law or executive order to be closed.
Certificate: Any one of the Certificates executed by the Securities
Administrator in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Principal
Certificates or Residual Certificates, at any date, the maximum dollar amount of
principal to which the Holder thereof is then entitled hereunder, such amount
being equal to the Denomination thereof minus all distributions of principal
previously made with respect thereto and in the case of any Subordinated
Certificates, reduced by any Applied Realized Loss Amounts applicable to such
Class of Subordinated Certificates; provided, however, that immediately
following the Distribution Date on which a Subsequent Recovery is distributed,
the Class Certificate Balances of any Class or Classes of Certificates that have
been previously reduced by Applied Realized Loss Amounts will be increased, in
order of seniority, by the amount of the Subsequent Recovery distributed on such
Distribution Date (up to the amount of Applied Realized Loss Amounts allocated
to such Class or Classes). The Class X and Class P Certificates have no
Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The Person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any Affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided, however,
that if any such Person (including the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Securities Administrator is entitled to
rely conclusively on a certification of the Depositor or any Affiliate of the
Depositor in determining which Certificates are registered in the name of an
Affiliate of the Depositor.
Certification: As defined in Section 8.13(b).
Class: All Certificates bearing the same class designation as set
forth in this Agreement.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balance of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 85.30% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class AF-2 Certificates: All Certificates bearing the class
designation of "Class AF-2."
Class AF-3 Certificates: All Certificates bearing the class
designation of "Class AF-3."
Class AF-3W Certificate Insured Amount: With respect to each
Distribution Date, the distribution to be made to Holders of Class AF-3W
Certificates on such Distribution Date, in an aggregate amount equal to the sum
of (a) the Accrued Certificate Interest Distribution Amount on the Class AF-3W
Certificates on such Distribution Date, (b) any Class AF-3W Principal Parity
Amount for such Distribution Date, and (c) if such Distribution Date is the
Final Scheduled Distribution Date or the date of earlier termination of the
Trust pursuant to the terms of this Agreement, the Class Certificate Balance of
the Class AF-3W Certificates, to the extent unpaid on such date (without
duplication of amounts included pursuant to clause (b) above), after giving
effect to all payments of principal of the Class AF-3W Certificates, including
all Prior Principal Parity Payments, in each case in accordance with the
original terms of the Class AF-3W Certificates when issued and without regard to
any amendment or modification of the Class AF-3W Certificates or this Agreement
except amendments or modifications to which the Class AF-3W Certificate Insurer
has given its prior written consent. The Class AF-3W Certificate Insured Amount
shall not include, nor shall coverage be provided under the Class AF-3W
Certificate Insurance Policy in respect of, any taxes, withholding or other
charge imposed by any governmental authority due in connection with the payment
of any Class AF-3W Certificate Insured Amount to a Holder, any Relief Act
Interest Shortfall, any Prepayment Interest Shortfalls to the extent not covered
by a Servicer, or any Basis Risk Carry Forward Amounts that may be incurred or
that may be distributable to the Class AF-3W Certificates.
Class AF-3W Certificate Insurance Policy: The Financial Security
Assurance Inc. Policy No. 51691-N, and all endorsements thereto dated the
Closing Date, issued by the Class AF-3W Certificate Insurer for the benefit of
the Class AF-3W Certificateholders.
Class AF-3W Certificate Insurer: Financial Security Assurance Inc.,
a New York stock insurance company organized and created under the laws of the
State of New York, and its successors in interest.
Class AF-3W Certificate Insurer Default: The existence and
continuance of any of the following:
(a) the Class AF-3W Certificate Insurer shall have failed to make a
required payment when due under the Class AF-3W Certificate Insurance
Policy in accordance with its terms;
(b) the Class AF-3W Certificate Insurer shall have (i) filed a
petition or commenced any case or proceeding under any provision or
chapter of the United States Bankruptcy Code, the New York State Insurance
Law or any other similar federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation, or reorganization, (ii) made a
general assignment for the benefit of its creditors or (iii) had an order
for relief entered against it under the United States Bankruptcy Code, the
New York State Insurance Law or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation, or
reorganization that is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or any other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent, or receiver for the Class AF-3W Certificate
Insurer or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, trustee, agent, or
receiver of the Class AF-3W Certificate Insurer (or the taking of
possession of all or any material portion of property of the Class AF-3W
Certificate Insurer).
Class AF-3W Certificates: All Certificates bearing the class
designation of "Class AF-3W."
Class AF-3W Principal Parity Amount: With respect to any
Distribution Date, the product of (i) the Principal Parity Deficit and (ii) a
fraction, the numerator of which is the Class Certificate Balance of the Class
A-3W Certificates and the denominator of which is the aggregate Class
Certificate Balances of all Class A Certificates, in each case on such
Distribution Date after giving effect to all distributions to be made on such
date.
Class AF-4 Certificates: All Certificates bearing the class
designation of "Class AF-4."
Class AF-5 Certificates: All Certificates bearing the class
designation of "Class AF-5."
Class AF-6 Certificates: All Certificates bearing the class
designation of "Class AF-6."
Class AF-6 Calculation Percentage: With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the Class
Certificate Balance of the Class AF-6 Certificates and the denominator of which
is the aggregate Class Certificate Balance of the Class-A Certificates, in each
case before giving effect to distribution of principal on that Distribution
Date.
Class AF-6 Lockout Distribution Amount: With respect to any
Distribution Date, an amount equal to the product of (i) the applicable Class
AF-6 Calculation Percentage for that Distribution Date, (ii) the Class AF-6
Lockout Percentage for that Distribution Date and (iii) the aggregate amount of
principal distributable to the Class-A Certificates on that Distribution Date.
In no event will the Class AF-6 Lockout Distribution Amount exceed the lesser of
the outstanding Class Certificate Balance for the Class AF-6 Certificates or the
Class-A Principal Distribution Amount for the applicable Distribution Date.
Class AF-6 Lockout Percentage: For any Distribution Date, the
following:
Class AF-6 Distribution Date
Lockout Percentage (Months)
------------------ -----------------
1 to 36 0%
37 to 60 45%
61 to 72 80%
73 to 84 100%
85 and thereafter 300%
Class AV-1 Certificates: All Certificates bearing the class
designation of "Class AV-1."
Class B Certificates: As specified in the Preliminary Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class Certificate Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Principal Balance of the Class M-6 Certificates (after taking into
account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date), and (H) the Class Certificate Balance of the Class B-1
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) the product of (x) 96.20% and (y) the aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution Date, and (B) the excess, if any, of
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date over the Overcollateralization Floor.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2."
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount on such Distribution Date) and (G) the Class
Certificate Balance of the Class B-2 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) (x) the product of 96.90% and (y)
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3."
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount on such Distribution
Date) and (H) the Class Certificate Balance of the Class B-3 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) (x) the
product of 97.90% and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
the Overcollateralization Floor.
Class B-4 Certificates: All Certificates bearing the class
designation of "Class B-4."
Class B-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount on such Distribution
Date), (H) the Class Certificate Balance of the Class B-3 Certificates (after
taking into account the distribution of the Class B-3 Principal Distribution
Amount on such Distribution Date) and (I) the Class Certificate Balance of the
Class B-4 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) (x) the product of 99.00% and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date and (B) the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date over the Overcollateralization Floor.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class M Certificates: As specified in the Preliminary Statement.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) (x) the
product of 87.80% and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
the Overcollateralization Floor.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2."
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) (x) the product of 90.30% and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date and (B) the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date over the Overcollateralization Floor.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3."
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount on such Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) (x) the product of 91.70% and (y)
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4."
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (E) the Class Certificate Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) (x) the
product of 93.00% and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
the Overcollateralization Floor.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5."
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal Distribution
Amount on such Distribution Date) and (F) the Class Certificate Balance of the
Class M-5 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) (x) the product of 94.30% and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date and (B) the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date over the Overcollateralization Floor.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6."
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class Certificate Balance of the
Class M-5 Certificates (after taking into account the distribution of the Class
M-5 Principal Distribution Amount on such Distribution Date) and (G) the Class
Certificate Balance of the Class M-6 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) (x) the product of 95.30% and (y)
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class P Certificates: All Certificates bearing the class designation
of "Class P."
Class R Certificates: All Certificates bearing the class designation
of "Class R."
Class R-1 Certificates: All Certificates bearing the class
designation of "Class R-1."
Class R-2 Certificates: All Certificates bearing the class
designation of "Class R-2."
Class X Certificates: All Certificates bearing the class designation
of "Class X."
Class X Distributable Amount: On any Distribution Date, (i) as a
distribution in respect of interest, the amount of interest that has accrued on
the Class X Interest and not applied as an Extra Principal Distribution Amount
on such Distribution Date, plus any such accrued interest remaining
undistributed from prior Distribution Dates, plus, without duplication, (ii) as
a distribution in respect of principal, any portion of the principal balance of
the Class X Interest which is distributable as an Overcollateralization
Reduction Amount, minus (iii) any amounts paid as a Basis Risk Payment.
Class X Interest: The Upper-Tier Regular Interest represented by the
Class X Certificates as specified and described in the Preliminary Statement and
the related footnote thereto.
Closing Date: October 28, 2005.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The "Custodial Account" as defined in the
applicable Servicing Agreement.
Compensating Interest: For any Distribution Date and Servicer (other
than ▇▇▇▇▇ Fargo and M&T Mortgage), the lesser of (a) the Prepayment Interest
Shortfall, if any, for such Distribution Date, with respect to voluntary
Principal Prepayments by the Mortgagor (excluding any payments made upon
liquidation of the Mortgage Loan), and (b) in the case of Countrywide Servicing,
one half of the Servicing Fee payable to such Servicer for such Distribution
Date. For any Distribution Date and ▇▇▇▇▇ Fargo and M&T Mortgage, "Compensating
Interest" shall mean the amount specified in clause (a) above.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Corporate Trust Office: With respect to the Securities
Administrator, the principal office of the Securities Administrator at ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust, GSAA Home Equity Trust 2005-12, or at such other address as the
Securities Administrator may designate from time to time by notice to the
Certificateholders and the Class AF-3W Certificate Insurer. With respect to the
Trustee, the principal office of the Trustee at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust & Loan Agency or at such other address as
the Trustee may designate from time to time by notice to the Certificateholders
and the Class AF-3W Certificate Insurer.
Corresponding Class: The Class of interests in one Trust REMIC
created under this Agreement that corresponds to the Class of interests in the
other Trust REMIC or to a Class of Certificates in the manner set out below:
Lower-Tier Upper-Tier Corresponding
Regular Interest Regular Interest Class of Certificates
--------------------------- ------------------------- --------------------------
Class LT-AV-1 Class AV-1 Class AV-1
Class LT-AF-2 Class AF-2 Class AF-2
Class LT-AF-3 Class AF-3 Class AF-3
Class LT-AF-3W Class AF-3W Class AF-3W
Class LT-AF-4 Class AF-4 Class AF-4
Class LT-AF-5 Class AF-5 Class AF-5
Class AF-6 Class AF-6 Class AF-6
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
Class LT-B-4 Class B-4 Class B-4
Countrywide Servicing: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors in interest.
Countrywide Servicing Agreement: The Flow Servicing Agreement, dated
May 1, 2005, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and Countrywide Home Loans
Servicing LP, a copy of which is attached hereto as Exhibit Q.
Custodial File: With respect to each Mortgage Loan, all Mortgage
Loan Documents which are delivered to the applicable Custodian or which at any
time comes into the possession of that Custodian.
Custodian: With respect to the ▇▇▇▇▇ Fargo Mortgage Loans, ▇▇▇▇▇
Fargo, with respect to the FNBN Mortgage Loans, Deutsche Bank and with respect
to the Goldman Conduit Mortgage Loans, JPMorgan.
Cut-off Date: October 1, 2005.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date (after
giving effect to payments of principal due on that date, whether or not
received).
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: A Mortgage Loan which is purchased or
repurchased by any Responsible Party, the Purchaser or the Depositor in
accordance with the terms of any Sale Agreement, any Assignment Agreement or
this Agreement, as applicable, or which is, in the case of a substitution
pursuant to the applicable Sale Agreement or any related Assignment Agreement,
replaced or to be replaced with a substitute mortgage loan.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware corporation, and
its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee and the Securities Administrator, that (a) is incorporated
under the laws of the United States of America or any State thereof, (b) is
subject to supervision and examination by federal or state banking authorities
and (c) has outstanding unsecured commercial paper or other short-term unsecured
debt obligations that are rated "P-1" by Moody's and "A-1" by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the
Business Day immediately preceding the Remittance Date.
Deutsche Bank: Deutsche Bank National Trust Company.
Distribution Account: The separate Eligible Account created and
maintained by the Master Servicer pursuant to Section 3.01(b) in the name of the
Securities Administrator as paying agent for the benefit of the Trustee and the
Certificateholders and designated "▇▇▇▇▇ Fargo Bank, N.A., as paying agent, in
trust for registered holders of GSAA Home Equity Trust 2005-12, Asset-Backed
Certificates, Series 2005-12." Funds in the Distribution Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in this
Agreement.
Distribution Date: The 25th day of each month or, if such day is not
a Business Day, the immediately succeeding Business Day, commencing in November
2005.
Document Certification and Exception Report: The report attached to
Exhibit G hereto.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
that Distribution Date occurs and ending on the first day of the calendar month
in which that Distribution Date occurs, except, in the case of the Goldman
Conduit Mortgage Loans, the period commencing on the first day of the month and
ending on the last day of the month preceding the month of the Remittance Date.
Eligible Account: Either (i) an account maintained with a federal or
state-chartered depository institution or trust company that complies with the
definition of Eligible Institution, (ii) an account maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity or (iii) any other account acceptable to
each Rating Agency and the Class AF-3W Certificate Insurer. Eligible Accounts
may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Securities Administrator or the
Trustee.
Eligible Institution: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt obligations,
or other short-term deposits of which are rated at least "A-1+" by Standard &
Poor's if the amounts on deposit are to be held in the account for no more than
365 days (or at least "A-2" by Standard & Poor's if the amounts on deposit are
to be held in the account for no more than 30 days), or the long-term unsecured
debt obligations of which are rated at least "AA-" by Standard & Poor's if the
amounts on deposit are to be held in the account for no more than 365 days, and
the commercial paper, short-term debt obligations, or other short-term deposits
of which are rated at least "P 1" by Moody's and "F1+" by Fitch (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Master Servicer, Servicer, Securities Administrator and Trustee) (in each
case to the extent they are designated as Rating Agencies in the Preliminary
Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Event of Default: As defined in the applicable Servicing Agreement.
Excess Overcollateralized Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralized Amount on such
Distribution Date over (b) the Specified Overcollateralized Amount for such
Distribution Date.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Securities Administrator pursuant to Section 3.01(a) in
the name of the Securities Administrator as paying agent for the benefit of the
Regular Certificateholders and designated "▇▇▇▇▇ Fargo Bank, N.A., as paying
agent, in trust for registered Holders of GSAA Home Equity Trust 2005-12,
Asset-Backed Certificates, Series 2005-12." Funds in the Excess Reserve Fund
Account shall be held in trust for the Regular Certificateholders for the uses
and purposes set forth in this Agreement. Amounts on deposit in the Excess
Reserve Fund Account shall not be invested.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal
to the sum of the applicable Servicing Fee Rate and, if set forth on the
Mortgage Loan Schedule, the applicable Primary Mortgage Insurance Policy premium
rate.
Expense Fees: As to each Mortgage Loan, the fees calculated by
reference to the Expense Fee Rate.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for that Distribution
Date and (y) the related Overcollateralization Deficiency for such Distribution
Date.
Fair Market Value Excess: As defined in Section 11.01.
▇▇▇▇▇▇ Mae: The Federal National Mortgage Association, and its
successors in interest.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date occurring in
September 2035.
Fitch: Fitch, Inc.
Fixed Rate Certificates: As specified in the Preliminary Statement.
FNBN: First National Bank of Nevada, a national banking association,
and its successors in interest.
FNBN Mortgage Loans: The Mortgage Loans acquired by the Purchaser
from FNBN pursuant to the FNBN Sale Agreement.
FNBN Sale Agreement: The Master Mortgage Loan Purchase and Interim
Servicing Agreement, dated March 24, 2004, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company and First National Bank of Nevada, a copy of which is attached hereto as
Exhibit N.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, and its successors in interest.
Goldman Conduit: ▇▇▇▇▇▇▇ Sachs Mortgage Conduit Program.
Goldman Conduit Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the applicable Goldman Conduit Sale Agreements.
Goldman Conduit Sale Agreements: The Master Loan Purchase
Agreements, between various mortgage loan sellers and ▇▇▇▇▇▇▇ Sachs Mortgage
Company, dated as of their respective dates, a copy of a form of which is
attached hereto as Exhibit P.
Insurance Agreement: The Insurance and Indemnity Agreement, dated as
of October 1, 2005, among the Purchaser, the Depositor and the Class AF-3W
Certificate Insurer.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to any Distribution Date, (i)
with respect to the LIBOR Certificates, the period commencing on the immediately
preceding Distribution Date (or commencing on the Closing Date in the case of
the first Distribution Date) and ending on the day immediately preceding the
current Distribution Date, and (ii) with respect to the Fixed Rate Certificates,
the calendar month immediately preceding the month which such Distribution Date
occurs.
Interest Remittance Amount: With respect to any Distribution Date,
that portion of Available Funds allocated to interest.
Investment Account: As defined in Section 3.02(a).
JPMorgan: ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association, a
national banking corporation, and its successors in interest.
Late Payment Rate: The lesser of (a) the greater of (i) the per
annum rate of interest publicly announced from time to time by ▇▇ ▇▇▇▇▇▇ Chase
Bank at its principal office in the City of New York, as its prime or base
lending rate (any change in such rate of interest to be effective on the date
such change is announced by ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank) plus 3%, and (ii) the then
applicable highest rate of interest on the Class AF-3W Certificates and (b) the
maximum rate permissible under applicable usury or similar laws limiting
interest rates as determined by the Class AF-3W Certificate Insurer. The Late
Payment Rate shall be computed on the basis of the actual number of days elapsed
over a year consisting of 360 days.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Securities Administrator on the related
LIBOR Determination Date on the basis of the offered rate for one month U.S.
dollar deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m.
(London time) on such date; provided, that if such rate does not appear on
Telerate Page 3750, the rate for such date will be determined on the basis of
the rates at which one-month U.S. dollar deposits are offered by the Reference
Banks at approximately 11:00 a.m. (London time) on such date to prime banks in
the London interbank market. In such event, the Securities Administrator shall
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that date will be the arithmetic mean of the quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If fewer than two quotations
are provided as requested, the rate for that date will be the arithmetic mean of
the rates quoted by major banks in New York City, selected by the Securities
Administrator (after consultation with the Depositor), at approximately 11:00
a.m. (New York City time) on such date for one-month U.S. dollar deposits of
leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding the
commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
Principal Prepayment Period preceding the month of such Distribution Date and as
to which the applicable Servicer has certified that it has received all amounts
it expects to receive in connection with the liquidation of such Mortgage Loan
including the final disposition of an REO Property.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the
sale of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan, including any Subsequent Recoveries.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-AV-1, Class
LT-AF-2, Class LT-AF-3, Class LT-AF-3W, Class LT-AF-4, Class LT-AF-5, Class
LT-AF-6, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5,
Class LT-M-6, Class LT-B-1, Class LT-B-2, Class LT-B-3, Class LT-B-4 and Class
LT-Accrual Interests as described in the Preliminary Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
M&T Mortgage: M&T Mortgage Corporation, a New York state chartered
corporation, and its successors in interest.
M&T Servicing Agreement: The Flow Servicing Rights Purchase and
Servicing Agreement, dated August 22, 2005, between ▇▇▇▇▇▇▇ Sachs Mortgage
Company and M&T Mortgage Corporation, a copy of which is attached hereto as
Exhibit O.
Master Servicer: ▇▇▇▇▇ Fargo, and if a successor master servicer is
appointed hereunder, such successor.
Master Servicer Float Period: With respect to any Distribution Date
and the related amounts in the Distribution Account, the period commencing on
the Remittance Date and ending on such Distribution Date.
Master Servicer Event of Default: As defined in Section 9.04.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
Monthly Advance: As defined in the applicable Servicing Agreement.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.02.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. and its successors in
interest. If ▇▇▇▇▇'▇ is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 12.05(b) the address for notices to Moody's
shall be ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Residential Mortgage Pass-Through Group, or such other address
as Moody's may hereafter furnish to the Depositor, the Servicer and the Trustee.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note, including all riders
thereto.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of a
Sale Agreement and a Servicing Agreement, each Mortgage Loan originally sold and
subject to any Sale Agreement being identified on the Mortgage Loan Schedule,
which Mortgage Loan includes without limitation the Mortgage File, the Custodial
File, the Servicing File, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition
proceeds, Prepayment Premiums and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The mortgage loan documents pertaining to
each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered to
the Trustee and the Securities Administrator and referred to on Schedule I, such
schedule setting forth the following information with respect to each Mortgage
Loan as of the Cut-off Date: (1) Responsible Party's Mortgage Loan number; (2)
the address, city, state and zip code of the Mortgaged Property; (3) a code
indicating whether the Mortgagor is self-employed; (4) a code indicating whether
the Mortgaged Property is owner-occupied, investment property or a second home;
(5) a code indicating whether the Mortgaged Property is a single family
residence, two family residence, three-family residence, four family residence,
condominium, manufactured housing or planned unit development; (6) the purpose
of the Mortgage Loan; (7) the type of Mortgage Loan; (8) the Mortgage Interest
Rate at origination; (9) the current Mortgage Interest Rate; (10) the name of
the applicable Servicer; (11) the applicable Servicing Fee Rate; (12) the
current Monthly Payment; (13) the original term to maturity; (14) the remaining
term to maturity; (15) the principal balance of the Mortgage Loan as of the
Cut-off Date after deduction of payments of principal due on or before the
Cut-off Date whether or not collected; (16) the LTV at origination and if the
Mortgage Loan has a second lien, combined LTV at origination; (17) the actual
principal balance of the Mortgage Loan as of the Cut-off Date; (18) social
security number of the Mortgagor; (19) a code indicating whether the Mortgage
Loan had a second lien at origination; (20) if the Mortgage Loan has a second
lien, combined loan balance as of the Cut-off Date; (21) a code indicating
whether the Mortgaged Property is a leasehold estate; (22) the Due Date of the
Mortgage Loan; (23) whether the Mortgage Loan is insured by a Primary Mortgage
Insurance Policy and the name of the insurer; (24) the certificate number of the
Primary Mortgage Insurance Policy; (25) the amount of coverage of the Primary
Mortgage Insurance Policy, and if it is a lender-paid Primary Mortgage Insurance
Policy, the premium rate; (26) the type of appraisal; (27) a code indicating
whether the Mortgage Loan is a MERS Mortgage Loan; (28) documentation type
(including asset and income type); (29) first payment date; (30) the schedule of
the payment delinquencies in the prior 12 months; (31) FICO score; (32) the
Mortgagor's name; (33) the stated maturity date; (34) the original principal
amount of the mortgage; (35) the name of the applicable Custodian and (36) the
"pay through" date or the date of the last payment made. With respect to the
Mortgage Loans in the aggregate: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans.
Mortgaged Property: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.01(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum of
the Compensating Interest payments made on such Distribution Date.
NIM Issuer: The entity established as the issuer of NIM Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class P and Class X Certificates.
NIM Trustee: The trustee for the NIM Securities.
Non-Permitted Transferee: As defined in Section 8.12(e).
Nonrecoverable Monthly Advance: With respect to a Servicer, as
defined in the Servicing Agreement. With respect to the Master Servicer or any
successor Master Servicer, including the Trustee, as applicable, any Monthly
Advance previously made or proposed to be made in respect of a Mortgage Loan or
REO Property that, in the good faith business judgment of the Master Servicer or
any successor Master Servicer including the Trustee, as applicable, will not or,
in the case of a proposed Monthly Advance, would not be ultimately recoverable
from related late payments, Insurance Proceeds, Condemnation Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: With respect to a Servicer, as
defined in the Servicing Agreement. With respect to the Master Servicer or any
successor Master Servicer, including the Trustee, as applicable, any Servicing
Advance previously made or proposed to be made in respect of a Mortgage Loan or
REO Property, which, in the good faith business judgment of the Servicer, the
Master Servicer or any successor Master Servicer including the Trustee, as
applicable, will not or, in the case of a proposed Servicing Advance, would not,
be ultimately recoverable from related Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds or otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 11.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or the President or a Vice President or
an Assistant Vice President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of any Servicer or any Responsible
Party, and delivered to the Trustee and the Securities Administrator, as
required by any Servicing Agreement or Sale Agreement, and to the Class AF-3W
Certificate Insurer.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the applicable Servicer, reasonably acceptable to the
Trustee, the Securities Administrator and/or the Class AF-3W Certificate
Insurer, as applicable (and/or such other Persons as may be set forth herein);
provided, that any Opinion of Counsel relating to (a) qualification of either
the Lower-Tier REMIC or Upper-Tier REMIC or (b) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the applicable Servicer or
the Master Servicer of the Mortgage Loans, (ii) does not have any material
direct or indirect financial interest in the applicable Servicer or the Master
Servicer of the Mortgage Loans or in an Affiliate of either and (iii) is not
connected with the applicable Servicer or the Master Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
Optional Termination Date: The date determined as follows:
(i) the Master Servicer may cause the Optional Termination Date to
occur on any Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans, as of the last day of the related Due Period, is equal to
10% or less of the Cut-off Date Pool Principal Balance; and
(ii) The Class AF-3W Certificate Insurer may cause the Optional
Termination Date to occur on the third Distribution Date after the Distribution
Date when the aggregate Stated Principal Balance of the Mortgage Loans, as of
the last day of the related Due Period, is equal to 10% or less of the Cut-off
Date Pool Principal Balance, provided that the Master Servicer has not exercised
its option in clause (i) above.
Notwithstanding the foregoing, in the event that both the Master
Servicer and the Class AF-3W Certificate Insurer may cause the Optional
Termination Date to occur, the first to provide notice to the Trustee exercising
such right shall be entitled to purchase the Mortgage Loans.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the
Securities Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the excess,
if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the Principal Certificates and the Residual Certificates as of such
Distribution Date (after giving effect to the payment of the Principal
Remittance Amount on such Certificates on that Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralized Amount
applicable to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Net Monthly Excess Cash Flow.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
Pass-Through Rate: For each Class of Certificates and each
Lower-Tier Regular Interest, the per annum rate set forth or calculated in the
manner described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Trustee, the Securities Administrator or
any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original maturity
of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or
a remaining maturity of more than 30 days) denominated in United
States dollars and issued by any Depository Institution and rated
F1+ by Fitch, P-1 by Moody's and A-1+ by S&P;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United States of America or any state thereof and that are rated by
each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date
of acquisition thereof) that is rated by each Rating Agency that
rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units of money market funds, including money market funds
advised by the Depositor, the Securities Administrator or the
Trustee or an Affiliate thereof, that are rated, if rated by
Moody's, at least "Aaa" by Moody's, and, if rated by Standard &
Poor's, at least, "AAAm" or "AAAm-G" by Standard & Poor's; and
(vii) if previously confirmed in writing to the Securities
Administrator, any other demand, money market or time deposit, or
any other obligation, security or investment, as may be acceptable
to the Rating Agencies as a permitted investment of funds backing
"Aaa" or "AAA" rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual Certificate
is attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of such Person or any other U.S.
Person, (vi) an "electing large partnership" within the meaning of Section 775
of the Code and (vii) any other Person so designated by the Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause either the Lower-Tier REMIC or the
Upper-Tier REMIC to fail to qualify as a REMIC at any time that the Certificates
are outstanding. The terms "United States," "State" and "international
organization" shall have the meanings set forth in Section 7701 of the Code or
successor provisions. A corporation will not be treated as an instrumentality of
the United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
▇▇▇▇▇▇▇ Mac, a majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Policy Payments Account: The separate Eligible Account created and
maintained by the Securities Administrator pursuant to Section 4.06(b) in the
name of the Securities Administrator for the benefit of the Class AF-3W
Certificateholders and the Class AF-3W Certificate Insurer and designated "▇▇▇▇▇
Fargo Bank, N.A., in trust for Financial Security Assurance Inc. and the
registered holders of GSAA Home Equity Trust 2005-12, Asset-Backed Certificates,
Series 2005-12, Class AF-3W".
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Preference Amount: Any amounts covered by the Class AF-3W
Certificate Insurance Policy that were distributed in respect of the Class AF-3W
Certificates which are recovered from any Holder of a Class AF-3W Certificate as
a voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code or other similar law in accordance with a final, nonappealable
order of a court having competent jurisdiction and which have not theretofore
been repaid to such Holders.
Preference Claim: As defined in Section 4.06(d) hereof.
Premium Amount: The product of the Premium Rate and the Class
Certificate Balance of the Class AF-3W Certificates immediately prior to such
Distribution Date.
Premium Rate: The rate set forth in the Premium Letter, dated
October 28, 2005, among the Class AF-3W Certificate Insurer, the Purchaser and
the Depositor. The initial Premium Rate is 0.07%.
Prepayment Interest Shortfall: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was, during the related Principal
Prepayment Period, the subject of a Principal Prepayment that was applied by the
applicable Servicer to reduce the outstanding principal balance of such Mortgage
Loan on a date preceding the Due Date in the succeeding Principal Prepayment
Period, an amount equal to the product of (a) the Mortgage Interest Rate net of
the applicable Servicing Fee Rate for such Mortgage Loan, (b) the amount of the
Principal Prepayment for such Mortgage Loan, (c) 1/360 and (d) the number of
days commencing on the date on which such Principal Prepayment was applied and
ending on the last day of the related Principal Prepayment Period.
Prepayment Premium: Any prepayment premium, penalty or charge, if
any, required under the terms of the related Mortgage Note to be paid in
connection with a Principal Prepayment, to the extent permitted by law.
Principal Certificates: As specified in the Preliminary Statement.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Parity Deficit: With respect to any Distribution Date, the
excess of (i) the aggregate Class Certificate Balances of the Class A
Certificates on that Distribution Date, after taking into account any reduction
(and, with respect to the Class AF-3W Certificates, as reduced by the Prior
Principal Parity Payments) of those Class Certificate Balances on that
Distribution Date, less the excess of (a) all Principal Parity Deficits for all
prior Distribution Dates over (b) the sum of all Class AF-3W Principal Parity
Amounts for all prior Distribution Dates, over (ii) the aggregate of the Stated
Principal Balances of the Mortgage Loans for that Distribution Date. For the
first Distribution Date, the Principal Parity Deficit will equal zero.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, including any Prepayment
Premium, and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Prepayment Period: With respect to any Distribution Date,
the calendar month preceding the month in which that Distribution Date occurs.
Principal Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans, the amount equal to the sum of the following amounts
(without duplication): (i) all scheduled payments of principal due on the Due
Date on such Mortgage Loans in the related Due Period and received on or prior
to the related Determination Date, together with any Monthly Advances in respect
thereof; (ii) all Condemnation Proceeds, Insurance Proceeds and Liquidation
Proceeds allocable to principal and received during the related Principal
Prepayment Period; (iii) all Principal Prepayments allocable to principal and
received during the related Principal Prepayment Period; (iv) all amounts
received with respect to such Distribution Date representing the portion of the
purchase price allocable to principal in connection with a purchase or
repurchase of a Deleted Mortgage Loan; (v) principal portion of all amounts
received with respect to such Distribution Date as a Substitution Adjustment
Amount and received in connection with the substitution of a Mortgage Loan and
(vi) the allocable portion of the proceeds received with respect to the
termination of the Trust Fund pursuant to clause (a) of Section 11.01 (to the
extent such proceeds relate to principal).
Prior Principal Parity Payments: With respect to any Distribution
Date, the sum of all Class AF-3W Principal Parity Amounts paid by the Class
AF-3W Certificate Insurer prior to such Distribution Date.
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated October 24,
2005, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchaser: ▇▇▇▇▇▇▇ Sachs Mortgage Company, a New York limited
partnership, and its successors in interest.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Securities Administrator. References herein to a given rating or rating category
of a Rating Agency shall mean such rating category without giving effect to any
modifiers. For purposes of Section 12.05(b), the addresses for notices to each
Rating Agency shall be the address specified therefor in the definition
corresponding to the name of such Rating Agency, or such other address as either
such Rating Agency may hereafter furnish to the Depositor and the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in connection with the liquidation of
such Liquidated Mortgage Loan and net of any amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the related Interest Accrual Period;
provided, however, that for any Definitive Certificate issued pursuant to
Section 5.02(e), the Record Date shall be the close of business on the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Reimbursement Amount: As of any Distribution Date, the sum as
calculated by the Class AF-3W Certificate Insurer of (i) all Class AF-3W
Certificate Insured Amounts and Preference Amounts previously paid by the Class
AF-3W Certificate Insurer and, in each case not previously repaid to the Class
AF-3W Certificate Insurer pursuant to Section 4.01 plus (ii) interest accrued on
each such Class AF-3W Certificate Insured Amounts and Preference Amounts not
previously repaid calculated at the Late Payment Rate from the date the Class
AF-3W Certificate Insurer paid to the Securities Administrator the related Class
AF-3W Certificate Insured Amounts or Preference Amounts, as applicable.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers' Civil Relief Act of 1940 or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Advice Date: The 10th day of each calendar month,
respectively, with respect to the ▇▇▇▇▇ Fargo Mortgage Loans and the FNBN
Mortgage Loans or the immediately following Business Day if such day is not a
Business Day, and with respect to the Goldman Conduit Mortgage Loans, not later
than each Remittance Date.
Remittance Date: With respect to any Distribution Date, the 18th day
(or if such 18th day is not a Business Day, the first Business Day immediately
preceding such 18th day or, in the case of Countrywide Servicing, the first
Business Day immediately succeeding such 18th day) of the month in which such
Distribution Date occurs.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Representations and Warranties Agreement: That certain
Representations and Warranties Agreement, dated as of October 28, 2005, between
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and GS Mortgage Securities Corp., a copy of which
is attached hereto as Exhibit R.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, the
Securities Administrator or the Master Servicer, any vice president, any
assistant vice president, any assistant secretary, any assistant treasurer, any
associate or any other officer of the Trustee, the Securities Administrator or
the Master Servicer, customarily performing functions similar to those performed
by any of the above designated officers who at such time shall be officers to
whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with the particular subject and who
shall have direct responsibility for the administration of this Agreement.
Responsible Party: Each of ▇▇▇▇▇ Fargo or FNBN, as the context may
require, in its capacity as seller under the related Sale Agreement. With
respect to the Goldman Conduit Mortgage Loans, the Purchaser.
Rule 144A Letter: As defined in Section 5.02(b).
Sale Agreement: Each of the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement, the FNBN Sale Agreement and the Goldman Conduit Sale Agreement.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: ▇▇▇▇▇ Fargo, and if a successor securities
administrator is appointed hereunder, such successor.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the
Overcollateralized Amount (in each case after taking into account the
distributions of the Principal Distribution Amount for such Distribution Date)
by (y) the aggregate Stated Principal Balance of the Mortgage Loans as of the
first day of the month in which such Distribution Date occurs.
Senior Specified Enhancement Percentage: As of any date of
determination, 14.70%.
Servicer: Each of ▇▇▇▇▇ Fargo, M&T Mortgage and Countrywide
Servicing in its capacity as servicer under the related Servicing Agreement, or
any successor servicer appointed pursuant to such Servicing Agreement.
Servicing Advances: As defined in the Servicing Agreement.
Servicing Agreement: Each of the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement, the M&T Mortgage Servicing Agreement and the Countrywide Servicing
Agreement.
Servicing Fee: As defined in the related Servicing Agreement.
Servicing Fee Rate: With respect to each Mortgage Loan, the per
annum rate for such Mortgage Loan specified on the Mortgage Loan Schedule.
Servicing File: As defined in the applicable Servicing Agreement.
Similar Law: As defined in Section 5.02(b).
Specified Overcollateralized Amount: Prior to the Stepdown Date, an
amount equal to 0.50% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to 1.00% of the aggregate Stated Principal
Balance of the Mortgage Loans for that Distribution Date, subject, until the
Class Certificate Balance of each Class of Principal Certificates has been
reduced to zero, to a minimum amount equal to the Overcollateralization Floor;
provided, however, that if, on any Distribution Date, a Trigger Event has
occurred, the Specified Overcollateralized Amount shall not be reduced to the
applicable percentage of the then aggregate Stated Principal Balance of the
Mortgage Loans but instead will remain the same as the prior period's Specified
Overcollateralized Amount until the Distribution Date on which a Trigger Event
is no longer occurring. When the Class Certificate Balance of each Class of
Principal Certificates has been reduced to zero, the Specified
Overcollateralized Amount will thereafter equal zero.
Standard & Poor's or S&P: Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors in interest. If
Standard & Poor's is designated as a Rating Agency in the Preliminary Statement,
for purposes of Section 12.05(b) the address for notices to Standard & Poor's
shall be Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Residential Mortgage Surveillance Group - GSAA Home Equity Trust
2005-12, or such other address as Standard & Poor's may hereafter furnish to the
Depositor, the Servicer and the Trustee.
Startup Day: As defined in Section 2.04.
Stated Principal Balance: As to each Mortgage Loan and as of any
Determination Date, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date, minus (ii) all amounts previously remitted to the Securities Administrator
with respect to the related Mortgage Loan representing payments or recoveries of
principal including advances in respect of scheduled payments of principal. For
purposes of any Distribution Date, the Stated Principal Balance of any Mortgage
Loan will give effect to any scheduled payments of principal received or
advanced prior to the related Remittance Date and any unscheduled principal
payments and other unscheduled principal collections received during the related
Principal Prepayment Period, and the Stated Principal Balance of any Mortgage
Loan that has prepaid in full or has become a Liquidated Mortgage Loan during
the related Prepayment Period shall be zero.
Step 1 Assignment Agreement: Each of the (i) Assignment, Assumption
and Recognition Agreement, dated as of October 28, 2005, between the Purchaser,
▇▇▇▇▇ Fargo and the Depositor, (ii) Assignment, Assumption and Recognition
Agreement, dated as of October 28, 2005, between the Purchaser, FNBN, M&T
Mortgage and the Depositor and (iii) Assignment, Assumption and Recognition
Agreement, dated as of October 28, 2005, between the Purchaser, Countrywide
Servicing and the Depositor.
Step 2 Assignment Agreement: Each of the (i) Assignment, Assumption
and Recognition Agreement, dated as of October 28, 2005, among the Depositor,
the Master Servicer, the Trustee and ▇▇▇▇▇ Fargo, (ii) Assignment, Assumption
and Recognition Agreement, dated as of October 28, 2005, among the Depositor,
the Master Servicer, the Trustee, FNBN and M&T Mortgage and (iii) Assignment,
Assumption and Recognition Agreement, dated as of October 28, 2005, among the
Depositor, the Master Servicer, the Trustee and Countrywide Servicing.
Stepdown Date: The earlier to occur of (a) the Distribution Date
following the Distribution Date on which the aggregate Class Certificate Balance
of the Class A Certificates has been reduced to zero and (b) the later to occur
of (i) the Distribution Date in November 2008 and (ii) the first Distribution
Date on which the Senior Enhancement Percentage is greater than or equal to the
Senior Specified Enhancement Percentage.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subsequent Recoveries: Amounts received with respect to any
Liquidated Mortgage Loan after it has become a Liquidated Mortgage Loan.
Substitution Adjustment Amount: With respect to any applicable Sale
Agreement or with respect to a Mortgage Loan substituted by the Purchaser, an
amount of cash received from the applicable Responsible Party in connection with
a substitution for a Deleted Mortgage Loan.
Tax Matters Person: The Holder of the Class R-1 and Class R-2
Certificates is designated as "tax matters person" of the Lower-Tier REMIC and
the Upper-Tier REMIC, respectively, in the manner provided under Treasury
Regulations Section 1.806F-4(d) and Treasury Regulations Section
301.6234(a)(7)-1.
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Termination Price: As defined in Section 11.01.
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest collected (prior to the
Remittance Date) or advanced on the Mortgage Loans for Due Dates during the
related Due Period (net of Expense Fees and the Premium Amount) over (ii) the
sum of the interest payable to the Principal Certificates and to the Class AF-3W
Certificate Insurer on such Distribution Date pursuant to Section 4.01(a)(i).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a Trigger
Event exists if (i) on such Distribution Date the quotient (expressed as a
percentage) of (x) the rolling three month average of the aggregate unpaid
principal balance of 60+ Day Delinquent Mortgage Loans divided by (y) the
aggregate unpaid principal balance of the Mortgage Loans equals or exceeds 40%
of the Senior Enhancement Percentage as of the last day of the prior Due Period
or (ii) the quotient (expressed as a percentage) of (x) the aggregate amount of
Realized Losses incurred since the Cut-off Date through the last day of the
related Principal Prepayment Period divided by (y) the Cut-off Date Pool
Principal Balance exceeds the applicable percentages set forth below with
respect to such Distribution Date:
Distribution Date Occurring In Loss Percentage
-------------------------------------- -----------------------------------------
November 2007 - October 2008 0.300% for the first month, plus an
additional 1/12th of 0.450% for each
month thereafter
November 2008 - October 2009 0.750% for the first month, plus an
additional 1/12th of 0.400% for each
month thereafter
November 2009 - October 2010 1.150% for the first month, plus an
additional 1/12th of 0.300% for each
month thereafter
November 2010 - October 2011 1.450% for the first month, plus an
additional 1/12th of 0.150% for each
month thereafter
November 2010 and thereafter 1.600%
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Excess Reserve Fund Account, the Distribution Account, and all amounts deposited
therein pursuant to the applicable provisions of this Agreement; (iii) property
that secured a Mortgage Loan and has been acquired by foreclosure, deed-in-lieu
of foreclosure or otherwise; (iv) the rights of the Trust under the Step 2
Assignment Agreements and the rights of the Depositor under the Representations
and Warranties Agreement; (v) with respect to the Class A-3W Certificates only,
the rights of the Trustee under the Class AF-3W Certificate Insurance Policy;
and (vi) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
Trust REMIC: As specified in the Preliminary Statement.
Trustee: HSBC Bank USA, National Association, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Underwriters' Exemption: Any exemption listed in footnote 1 of, and
amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487 (2002),
or amended by Prohibited Transaction Exemption 2002-19, 67 Fed. Reg. 14979, or
any successor exemption.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from prior Distribution Dates remaining unpaid prior to the
current Distribution Date and (b) interest on the amount in clause (a) at the
applicable Pass-Through Rate (to the extent permitted by applicable law).
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
state thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control all substantial decisions of the
trust. Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests) and (c) the remaining Voting Rights shall be allocated among Holders
of the remaining Classes of Certificates in proportion to the Certificate
Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, a per annum rate equal to (a) the weighted average of the Adjusted Net
Mortgage Interest Rates then in effect on the beginning of the related Due
Period on the Mortgage Loans multiplied by (b) 30 divided by the actual number
of days in the related Interest Accrual Period, in the case of the LIBOR
Certificates, and 30 divided by 360, in the case of the Fixed Rate Certificates.
▇▇▇▇▇ Fargo: ▇▇▇▇▇ Fargo Bank, N.A., a national banking association,
and its successors in interest.
▇▇▇▇▇ Fargo Mortgage Loans: The Mortgage Loans acquired by the
Purchaser from ▇▇▇▇▇ Fargo pursuant to the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement.
▇▇▇▇▇ Fargo Sale and Servicing Agreement: The Master Seller's
Warranties and Servicing Agreement, dated August 1, 2004, as amended by
Amendment No. 1, dated as of April 26, 2005, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company and ▇▇▇▇▇ Fargo Bank, N.A., a copy of which is attached hereto as
Exhibit M.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders and the Class AF-3W Certificate Insurer, without recourse,
all the right, title and interest of the Depositor in and to the Trust Fund.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to each Custodian on
behalf of the Trustee for the benefit of the Certificateholders and the Class
AF-3W Certificate Insurer the following documents or instruments with respect to
each applicable Mortgage Loan so assigned:
(i) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(ii) The original Assignment of Mortgage in blank, unless the
Mortgage Loan is a MERS Mortgage Loan;
(iii) personal endorsement and/or guaranty agreements executed in
connection with all non individual Mortgage Loans (corporations,
partnerships, trusts, estates, etc. (if any);
(iv) the related original Mortgage and evidence of its recording or,
in certain limited circumstances, a certified copy of the mortgage with
evidence of recording;
(v) except with respect to a MERS Loan, originals of any intervening
Mortgage assignment or certified copies in either case evidencing
recording; provided, that the assignment may be in the form of a blanket
assignment or assignments, a copy of which with evidence of recording
shall be acceptable;
(vi) originals of all assumption, modification, agreements or
certified copies thereof, in either case with evidence of recording if
required to maintain the lien of the mortgage or if otherwise required,
or, if recordation is not required, an original or copy of the agreement;
(vii) an original or copy of a title insurance policy or evidence of
title;
(viii) to the extent applicable, an original power of attorney; and
(ix) a security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage, if any.
The Depositor shall deliver to each Custodian the applicable
recorded document promptly upon receipt from the respective recording office but
in no event later than 120 days from the Closing Date.
From time to time, pursuant to the applicable Sale Agreement, the
Responsible Party may forward to the applicable Custodian additional original
documents, additional documents evidencing an assumption, modification,
consolidation or extension of a Mortgage Loan, in accordance with the terms of
the applicable Sale Agreement. All such mortgage documents held by the
Custodians as to each Mortgage Loan shall constitute the "Custodial File."
On or prior to the Closing Date, the Depositor shall deliver to the
Custodians Assignments of Mortgages (except in the case of MERS Loans), in
blank, for each applicable Mortgage Loan. On the Closing Date, the Trustee shall
provide a written request to each Responsible Party to submit the Assignments of
Mortgage for recordation, at the Responsible Party's expense, pursuant to the
applicable Sale Agreement. Each Custodian shall deliver the Assignment of
Mortgages to be submitted for recordation to the applicable Responsible Party.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Custodian within the time period and in the manner specified in the
applicable Sale Agreement, the Trustee shall take or cause to be taken such
remedial actions under the Sale Agreement against the applicable Responsible
Party as may be permitted to be taken thereunder, including without limitation,
if applicable, the repurchase by the applicable Responsible Party of such
Mortgage Loan. The foregoing repurchase remedy shall not apply in the event that
the Responsible Party cannot deliver such original or copy of any document
submitted for recordation to the appropriate public recording office within the
specified period due to a delay caused by the recording office in the applicable
jurisdiction; provided, that the applicable Responsible Party shall instead
deliver a recording receipt of such recording office or, if such recording
receipt is not available, an officer's certificate of an officer of the
applicable Responsible Party, confirming that such document has been accepted
for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses the
original Mortgage or assignment after it has been recorded, the obligations of
the Responsible Party shall be deemed to have been satisfied upon delivery by
the Responsible Party to the applicable Custodian prior to the Closing Date of a
copy of such Mortgage or assignment, as the case may be, certified (such
certification to be an original thereof) by the public recording office to be a
true and complete copy of the recorded original thereof.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "GSAA Home Equity Trust
2005-12" and HSBC Bank USA, National Association is hereby appointed as Trustee
in accordance with the provisions of this Agreement.
(d) It is the policy and intention of the Trust that none of the
Mortgage Loans included in the Trust is (a) covered by the Home Ownership and
Equity Protection Act of 1994, or (b) considered a "high cost home,"
"threshold," "predatory" or "covered" loan (excluding "covered home loans" as
defined under clause (1) of the definition of "covered home loans" in the New
Jersey Home Ownership Security Act of 2002) under applicable state, federal or
local laws.
Section 2.02 Acceptance by the Custodians of the Mortgage Loans.
Each Custodian acknowledges receipt of the documents identified in the Initial
Certification in the form annexed hereto as Exhibit F, and declares that it
holds and will hold such documents and the other documents delivered to it
pursuant to Section 2.01, and that it holds or will hold such other assets as
are included in the Trust Fund, in trust for the exclusive use and benefit of
all present and future Certificateholders and with respect to the Class AF-3W
Certificates, the Class AF-3W Certificate Insurer. ▇▇▇▇▇ Fargo, as Custodian,
acknowledges that it will maintain possession of the related Mortgage Notes in
the State of Minnesota, Deutsche Bank, as Custodian, acknowledges that it will
maintain possession of the related Mortgage Notes in the State of California and
JPMorgan, as Custodian, acknowledges that it will maintain possession of the
related Mortgage Notes in the State of Texas, unless otherwise permitted by the
Rating Agencies.
Prior to and as a condition to the Closing, each Custodian shall
deliver via facsimile (with original to follow the next Business Day) to the
Depositor and the Class AF-3W Certificate Insurer an Initial Certification prior
to the Closing Date, or as the Depositor agrees to, on the Closing Date,
certifying receipt of a Mortgage Note and Assignment of Mortgage for each
Mortgage Loan. Neither Custodian shall be responsible to verify the validity,
sufficiency or genuineness of any document in any Custodial File.
On the Closing Date, each Custodian shall ascertain that all
documents required to be delivered to it are in its possession and shall deliver
to the Depositor and the Class AF-3W Certificate Insurer an Initial
Certification, in the form annexed hereto as Exhibit F, and shall deliver to the
Depositor and the Class AF-3W Certificate Insurer a Document Certification and
Exception Report, in the form annexed hereto as Exhibit G, within 90 days after
the Closing Date to the effect that, as to each applicable Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as an exception and
not covered by such certification): (i) all documents required to be delivered
to it are in its possession; (ii) such documents have been reviewed by it and
appear regular on their face and relate to such Mortgage Loan; (iii) based on
its examination and only as to the foregoing documents, as to ▇▇▇▇▇ Fargo, the
information set forth in items 2, 8, 33 and 34 of the Mortgage Loan Schedule
respecting such Mortgage Loan is correct; (iv) based on its examination and only
as to the foregoing documents, as to Deutsche Bank, the information set forth in
items 2, 8, 33, and 34 of the Mortgage Loan Schedule respecting such Mortgage
Loan is correct; (v) based on its examination and only as to the foregoing
documents, as to JPMorgan, the information set forth in items 2, 8, 33, and 34
of the Mortgage Loan Schedule respecting such Mortgage Loan is correct; and (vi)
each Mortgage Note has been endorsed as provided in Section 2.01 of this
Agreement. Neither Custodian shall be responsible to verify the validity,
sufficiency or genuineness of any document in any Custodial File.
Each Custodian shall retain possession and custody of each
applicable Custodial File in accordance with and subject to the terms and
conditions set forth herein. The Servicer shall promptly deliver to the
applicable Custodian, upon the execution or receipt thereof, the originals of
such other documents or instruments constituting the Custodial File as come into
the possession of the Servicer from time to time.
Each Custodian shall notify the Trustee of any Mortgage Loans that
do not conform to such requirements of Sections 2.01 and 2.02 hereof. The
Trustee shall enforce the obligation of the Responsible Parties to cure or
repurchase Mortgage Loans that do not conform to such requirements as determined
in the Custodian's review as required herein, or based upon notification from
the applicable Custodian, by notifying the applicable Responsible Party to
correct or cure such default. The Trustee shall also enforce the obligation of
the Responsible Parties under the Sale Agreements, and the Servicing Agreements
and of the Purchaser under the Assignment Agreements to cure or repurchase
Mortgage Loans for which there is a defect or a breach of a representation or
warranty thereunder of which a Responsible Officer of the Trustee has actual
knowledge, by notifying the applicable party to correct or cure such default. If
any Servicer, any Responsible Party or the Purchaser, as the case may be, fails
or is unable to correct or cure the defect or breach within the period set forth
in the applicable agreement, the Trustee shall notify the Depositor of such
failure to correct or cure. Unless otherwise directed by the Depositor within
five (5) Business Days after notifying the Depositor of such failure by the
applicable party to correct or cure, the Trustee shall notify such party to
repurchase the Mortgage Loan. If, within ten (10) Business Days of receipt of
such notice by such party, such party fails to repurchase such Mortgage Loan,
the Trustee shall notify the Depositor, the Master Servicer and the Class AF-3W
Certificate Insurer of such failure. The Trustee shall pursue all legal remedies
available to the Trustee against the Servicers, the Responsible Parties and the
Purchaser, as applicable, under this Agreement, if the Trustee has received
written notice from the Depositor directing the Trustee to pursue such remedies.
Section 2.03 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, the Securities Administrator has
executed and delivered to or upon the order of the Depositor, the Certificates
in authorized Denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the rights referred to above for the benefit of all present and future
Holders of the Certificates and with respect to the Class AF-3W Certificates,
for the benefit of the Class AF-3W Certificate Insurer (and all references in
this Agreement for the benefit of or actions on behalf of the Class AF-3W
Certificateholders shall be deemed to include the Class AF-3W Certificate
Insurer). The Trustee shall cooperate with all reasonable requests by the Class
AF-3W Certificate Insurer regarding action to preserve or enforce the Class
AF-3W Certificate Insurer's rights or interests under this Agreement and the
Class AF-3W Certificates.
Section 2.04 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "latest possible maturity date" is September 25, 2035, which is the
Distribution Date in the month following the month in which the latest maturity
date of any Mortgage Loan occurs. Amounts paid to the Class X Certificates
(prior to any reduction for any Basis Risk Payment) shall be deemed paid from
the Upper-Tier REMIC in respect of the Class X Interest to the holders of the
Class X Certificates prior to distribution of Basis Risk Payments to the
Principal Certificates.
Section 2.05 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, the Master
Servicer, the Securities Administrator and the Class AF-3W Certificate Insurer
that as of the date of this Agreement or as of such date specifically provided
herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of each Mortgage Note and each
Mortgage as and in the manner contemplated by this Agreement is sufficient
either (i) fully to transfer to the Trustee, for the benefit of the
Certificateholders and for the benefit of the Class AF-3W Certificate Insurer,
all right, title, and interest of the Depositor thereto as note holder and
mortgagee or (ii) to grant to the Trustee, for the benefit of the
Certificateholders and for the benefit of the Class AF-3W Certificate Insurer,
the security interest referred to in Section 12.04 hereof.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the
respective Custodial Files to the Custodians, and shall inure to the benefit of
the Certificateholders and the Class AF-3W Certificate Insurer.
Section 2.06 Representations and Warranties of JPMorgan. JPMorgan
hereby represents and warrants to the Depositor, the Master Servicer and the
Trustee, as of the Closing Date:
(a) Such Custodian is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by such Custodian or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such state, to the extent necessary to
perform any of its obligations under this Agreement in accordance with the terms
thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of such Custodian, enforceable against such Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by such Custodian,
the consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are in
the ordinary course of business of such Custodian and will not (i) result in a
material breach of any term or provision of the articles of incorporation or by
laws of such Custodian, (ii) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default under, the
terms of any other material agreement or instrument to which such Custodian is a
party or by which it may be bound, or (iii) constitute a material violation of
any statute, order or regulation applicable to such Custodian of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over such Custodian; and such Custodian is not in breach or violation of any
material indenture or other material agreement or instrument, or in violation of
any statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair such Custodian's ability to perform or meet any
of its obligations under this Agreement.
(d) No litigation is pending or threatened against such Custodian
that would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of such Custodian to perform any
of its obligations under this Agreement in accordance with the terms thereof.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by such Custodian of, or compliance by such Custodian with, this
Agreement or the consummation of the transactions contemplated thereby, or if
any such consent, approval, authorization or order is required, such Custodian
has obtained the same.
Section 2.07 Representations and Warranties of Deutsche Bank.
Deutsche Bank hereby represents and warrants to the Depositor, the Master
Servicer and the Trustee, as of the Closing Date:
(a) Such Custodian is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by such Custodian or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such state, to the extent necessary to
perform any of its obligations under this Agreement in accordance with the terms
thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of such Custodian, enforceable against such Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by such Custodian,
the consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are in
the ordinary course of business of such Custodian and will not result in a
material breach of any term or provision of the articles of incorporation or by
laws of such Custodian.
Section 2.08 Representations and Warranties of ▇▇▇▇▇ Fargo. ▇▇▇▇▇
Fargo hereby represents and warrants to the Depositor, the Master Servicer and
the Trustee, as of the Closing Date:
(a) ▇▇▇▇▇ Fargo is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by ▇▇▇▇▇ Fargo in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing business
laws of any such state, to the extent necessary to perform any of its
obligations under this Agreement in accordance with the terms thereof.
(b) ▇▇▇▇▇ Fargo has the full power and authority to execute, deliver
and perform, and to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized by all necessary action on the part of
▇▇▇▇▇ Fargo the execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery thereof by the
other parties thereto, constitutes a legal, valid and binding obligation of
▇▇▇▇▇ Fargo, enforceable against ▇▇▇▇▇ Fargo in accordance with its terms,
except that (i) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(c) The execution and delivery of this Agreement by ▇▇▇▇▇ Fargo, the
consummation of any other of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms thereof are in the ordinary
course of business of ▇▇▇▇▇ Fargo and will not (i) result in a material breach
of any term or provision of the articles of incorporation or bylaws of ▇▇▇▇▇
Fargo, (ii) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any other
material agreement or instrument to which ▇▇▇▇▇ Fargo is a party or by which it
may be bound, or (iii) constitute a material violation of any statute, order or
regulation applicable to ▇▇▇▇▇ Fargo of any court, regulatory body,
administrative agency or governmental body having jurisdiction over ▇▇▇▇▇ Fargo;
and ▇▇▇▇▇ Fargo is not in breach or violation of any material indenture or other
material agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or governmental
body having jurisdiction over it which breach or violation may materially impair
▇▇▇▇▇ Fargo's ability to perform or meet any of its obligations under this
Agreement.
(d) No litigation is pending or threatened against ▇▇▇▇▇ Fargo that
would materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of ▇▇▇▇▇ Fargo to perform any of its
obligations under this Agreement in accordance with the terms thereof. For
purposes of the foregoing, ▇▇▇▇▇ Fargo does not regard any actions, proceedings
or investigations "threatened" unless the potential litigants or governmental
authority has manifested to a member of the ▇▇▇▇▇ Fargo & Company Law Department
having responsibility for litigation matters involving the corporate trust
activities of ▇▇▇▇▇ Fargo its present intention to initiate such proceedings.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by ▇▇▇▇▇ Fargo of, or compliance by ▇▇▇▇▇ Fargo with, this Agreement
or the consummation of the transactions contemplated thereby, or if any such
consent, approval, authorization or order is required, ▇▇▇▇▇ Fargo has obtained
the same.
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account. (a)
The Securities Administrator shall establish and maintain the Excess Reserve
Fund Account to receive any Basis Risk Payment and to secure their limited
recourse obligation to pay to the Principal Certificateholders any Basis Risk
Carry Forward Amounts. On each Distribution Date, the Securities Administrator
shall deposit the amount of any Basis Risk Payment received by it for such date
into the Excess Reserve Fund Account.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class or Classes of Principal Certificates, the Securities
Administrator shall (1) withdraw from the Distribution Account, to the extent of
funds available therefor in the Distribution Account, and deposit in the Excess
Reserve Fund Account, as set forth in Section 4.01(a)(iii)(L), the lesser of (x)
the Class X Distributable Amount (without regard to the reduction in clause
(iii) of the definition thereof with respect to Basis Risk Payments) (to the
extent remaining after the distributions specified in Sections
4.01(a)(iii)(A)-(K)) and (y) the aggregate Basis Risk Carry Forward Amounts of
the Principal Certificates for such Distribution Date and (2) withdraw from the
Excess Reserve Fund Account amounts necessary to pay to such Class or Classes of
Principal Certificates the related Basis Risk Carry Forward Amount. Such
payments shall be allocated to those Classes based upon the amount of Basis Risk
Carry Forward Amount owed to each such Class and shall be paid in the priority
set forth in Section 4.01(a)(iii)(M).
The Securities Administrator shall account for the Excess Reserve
Fund Account as an asset of a grantor trust under subpart E, Part I of
subchapter J of the Code and not as an asset of either Trust REMIC created
pursuant to this Agreement. The beneficial owners of the Excess Reserve Fund
Account are the Class X Certificateholders. For all federal income tax purposes,
amounts transferred by the Upper-Tier REMIC to the Excess Reserve Fund Account
shall be treated as distributions by the Securities Administrator to the Class X
Certificateholders in respect of the Class X Interest and then contributed by
the Class X Certificateholders to the Excess Reserve Fund Account.
Any Basis Risk Carry Forward Amounts distributed by the Securities
Administrator to the Principal Certificateholders from the Excess Reserve Fund
Account shall be accounted for by the Securities Administrator, for federal
income tax purposes, as amounts paid first to the Holders of the Class X
Certificates (in respect of the Class X Interest) and then to the respective
Class or Classes of Principal Certificates. In addition, the Securities
Administrator shall account for the Principal Certificateholders' rights to
receive payments of Basis Risk Carry Forward Amounts from the Excess Reserve
Fund Account as rights in a limited recourse interest rate cap contract written
by the Class X Certificateholders in favor of the Holders of each such Class.
Notwithstanding any provision contained in this Agreement, the
Securities Administrator shall not be required to make any distributions from
the Excess Reserve Fund Account except as expressly set forth in this Section
3.01(a).
(b) The Master Servicer shall establish and maintain the
Distribution Account on behalf of the Certificateholders. The Master Servicer
shall, promptly upon receipt on the Business Day received, deposit in the
Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicers to the Master
Servicer pursuant to the Servicing Agreements; and
(ii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that any Servicer shall remit any amount not required
to be remitted pursuant to the applicable Servicing Agreement, and such Servicer
directs the Master Servicer in writing to withdraw such amount from the
Distribution Account, the Master Servicer shall return such funds to the
applicable Servicer. All funds deposited in the Distribution Account shall be
held by the Securities Administrator in trust for the Certificateholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 4.01.
Section 3.02 Investment of Funds in the Distribution Account. (a)
The Master Servicer may (but shall not be obligated to) invest funds in the
Distribution Account during the Master Servicer Float Period (for purposes of
this Section 3.02, such Account is referred to as an "Investment Account"), in
one or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand or maturing on such Distribution Date, in the
case of an investment that is an obligation of ▇▇▇▇▇ Fargo Bank, N.A., no later
than the Business Day immediately preceding the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement. All such
Permitted Investments shall be held to maturity, unless payable on demand. Any
investment of funds in an Investment Account shall be made in the name of the
Master Servicer. The Master Servicer shall be entitled to sole possession over
each such investment, and any certificate or other instrument evidencing any
such investment shall be delivered directly to the Master Servicer or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Master Servicer. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Master Servicer may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Master Servicer during the
Master Servicer Float Period shall be subject to the Securities Administrator's
withdrawal in the manner set forth in Section 10.05.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Securities Administrator shall take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings. Notwithstanding the foregoing, the
Securities Administrator shall be liable to the Trust for any such loss on any
funds it has invested under this Section 3.02 only during the Securities
Administrator Float Period, and the Securities Administrator shall deposit funds
in the amount of such loss in the Distribution Account promptly after such loss
is incurred.
(d) The Securities Administrator or its Affiliates are permitted to
receive additional compensation that could be deemed to be in the Securities
Administrator's economic self-interest for (i) serving as investment adviser,
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 is not payable or
reimbursable under Section 8.06 of this Agreement.
(e) In order to comply with its duties under the USA Patriot Act of
2001, the Trustee and the Custodians shall obtain and verify certain information
and documentation from the other parties to this Agreement including, but not
limited to, each such party's name, address and other identifying information.
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator shall make the disbursements and transfers
from amounts then on deposit in the Distribution Account in the following order
of priority and to the extent of the Available Funds remaining:
(i) to the Holders of each Class of Principal Certificates and to
the Class AF-3W Certificate Insurer in the following order of priority:
(A) from the Interest Remittance Amount, to the Class AF-3W
Certificate Insurer, any accrued and unpaid Premium Amount payable
to the Class AF-3W Certificate Insurer for that Distribution Date;
(B) from any remaining Interest Remittance Amount, to the
Class A Certificates, the related Accrued Certificate Interest
Distribution Amounts and Unpaid Interest Amounts for those Classes,
allocated pro rata based on their respective entitlements to those
amounts;
(C) from any remaining Interest Remittance Amount, to the
Class AF-3W Certificate Insurer, to the extent of any remaining
Reimbursement Amount then owing to it (or to the Class AF-3W
Certificates in lieu of any claims under the Class AF-3W Certificate
Insurance Policy for such Distribution Date), as well as other
amounts owed to the Class AF-3W Certificate Insurer;
(D) from any remaining Interest Remittance Amount, to the
Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amounts for that Class;
(E) from any remaining Interest Remittance Amount, to the
Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amounts for that Class;
(F) from any remaining Interest Remittance Amount, to the
Class M-3 Certificates, the Accrued Certificate Interest
Distribution Amounts for that Class;
(G) from any remaining Interest Remittance Amount, to the
Class M-4 Certificates, the Accrued Certificate Interest
Distribution Amounts for that Class;
(H) from any remaining Interest Remittance Amount, to the
Class M-5 Certificates, the Accrued Certificate Interest
Distribution Amounts for that Class;
(I) from any remaining Interest Remittance Amount, to the
Class M-6 Certificates, the Accrued Certificate Interest
Distribution Amounts for that Class;
(J) from any remaining Interest Remittance Amount, to the
Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amounts for that Class;
(K) from any remaining Interest Remittance Amount, to the
Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amounts for that Class;
(L) from any remaining Interest Remittance Amount, to the
Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amounts for that Class; and
(M) from any remaining Interest Remittance Amount, to the
Class B-4 Certificates, the Accrued Certificate Interest
Distribution Amounts for that Class.
(ii) (A) on each Distribution Date (x) prior to the Stepdown Date or
(y) with respect to which a Trigger Event is in effect, to the Holders of
the Class or Classes of Principal Certificates and Residual Certificates
then entitled to distributions of principal and to the Class AF-3W
Certificate Insurer, from Available Funds remaining after making
distributions pursuant to clause (i) above, an amount equal to the
Principal Distribution Amount in the following order of priority:
(1) concurrently, to the Class R-1 and R-2 Certificates,
pro rata based on their respective Class Certificate Balances,
until their respective Class Certificate Balances have been
reduced to zero;
(2) to the Class A Certificates, allocated sequentially
as follows:
a. to the Class AF-6 Certificates, an amount equal
to the Class AF-6 Lockout Distribution Amount, until
their Class Certificate Balance has been reduced to
zero;
b. to the Class AV-1 Certificates, until their
Class Certificate Balance has been reduced to zero;
c. to the Class AF-2 Certificates, until their
Class Certificate Balance has been reduced to zero;
d. to the Class AF-3 and Class AF-3W Certificates,
pro rata, based on their respective Class Certificate
Balances, until their respective Class Certificate
Balances have been reduced to zero;
e. sequentially, to the Class AF-4, Class AF-5 and
Class AF-6 Certificates, in that order, until their
respective Class Certificate Balances have been reduced
to zero;
(3) to the Class AF-3W Certificate Insurer, to the
extent of principal payments made to the Class AF-3W
Certificates the remaining Reimbursement Amount then owing to
it;
(4) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class
M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2,
Class B-3 and Class B-4 Certificates, in that order, until
their respective Class Certificate Balances have been reduced
to zero;
(B) on each Distribution Date (x) on and after the Stepdown
Date and (y) as long as a Trigger Event is not in effect, to the
Holders of the Class or Classes of Principal Certificates then
entitled to distribution of principal and to the Class AF-3W
Certificate Insurer, from Available Funds remaining on deposit in
the Distribution Account after making distributions pursuant to
clause (i) above, an amount equal to the Principal Distribution
Amount in the following order of priority:
(1) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated sequentially as follows:
a. to the Class AF-6 Certificates, an amount equal
to the Class AF-6 Lockout Distribution Amount, until
their Class Certificate Balance has been reduced to
zero;
b. to the Class AV-1 Certificates, until their
Class Certificate Balance has been reduced to zero;
c. to the Class AF-2 Certificates, until their
Class Certificate Balance has been reduced to zero;
d. to the Class AF-3 and Class AF-3W Certificates,
pro rata, based on their respective Class Certificate
Balances, until their respective Class Certificate
Balances have been reduced to zero; and
e. sequentially, to the Class AF-4, Class AF-5 and
Class AF-6 Certificates, in that order, until their
respective Class Certificate Balances have been reduced
to zero;
(2) to the Class AF-3W Certificate Insurer, to the
extent of principal payments made to the Class AF-3W
Certificates the remaining Reimbursement Amount then owing it;
(3) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above and to the Class AF-3W Certificate Insurer in
clause (ii)(B)(2) above and (y) the Class M-1 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero;
(4) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class AF-3W Certificate Insurer in
clause (ii)(B)(2) above and to the Class M-1 Certificates in
clause (ii)(B)(2) above and (y) the Class M-2 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero;
(5) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class AF-3W Certificate Insurer in
clause (ii)(B)(2) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above and to the Class M-2 Certificates in
clause (ii)(B)(3) above and (y) the Class M-3 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero;
(6) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class AF-3W Certificate Insurer in
clause (ii)(B)(2) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2 Certificates in
clause (ii)(B)(3) above and to the Class M-3 Certificates in
clause (ii)(B)(4) above and (y) the Class M-4 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero;
(7) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class AF-3W Certificate Insurer in
clause (ii)(B)(2) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2 Certificates in
clause (ii)(B)(3) above, to the Class M-3 Certificates in
clause (ii)(B)(4) above and to the Class M-4 Certificates in
clause (ii)(B)(5) above and (y) the Class M-5 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero;
(8) to the Class M-6 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class AF-3W Certificate Insurer in
clause (ii)(B)(2) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2 Certificates in
clause (ii)(B)(3) above, to the Class M-3 Certificates in
clause (ii)(B)(4) above, to the Class M-4 Certificates in
clause (ii)(B)(5) above and to the Class M-5 Certificates in
clause (ii)(B)(6) above and (y) the Class M-6 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero;
(9) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class AF-3W Certificate Insurer in
clause (ii)(B)(2) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2 Certificates in
clause (ii)(B)(3) above, to the Class M-3 Certificates in
clause (ii)(B)(4) above, to the Class M-4 Certificates in
clause (ii)(B)(5) above, to the Class M-5 Certificates in
clause (ii)(B)(6) above and to the Class M-6 Certificates in
clause (ii)(B)(7) above and (y) the Class B-1 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero;
(10) to the Class B-2 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over (ii)
the amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class AF-3W Certificate Insurer in
clause (ii)(B)(2) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2 Certificates in
clause (ii)(B)(3) above, to the Class M-3 Certificates in
clause (ii)(B)(4) above, to the Class M-4 Certificates in
clause (ii)(B)(5) above, to the Class M-5 Certificates in
clause (ii)(B)(6) above, to the Class M-6 Certificates in
clause (ii)(B)(7) above and to the Class B-1 Certificates in
clause (ii)(B)(8) above and (y) the Class B-2 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero;
(11) to the Class B-3 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over (ii)
the amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class AF-3W Certificate Insurer in
clause (ii)(B)(2) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2 Certificates in
clause (ii)(B)(3) above, to the Class M-3 Certificates in
clause (ii)(B)(4) above, to the Class M-4 Certificates in
clause (ii)(B)(5) above, to the Class M-5 Certificates in
clause (ii)(B)(6) above, to the Class M-6 Certificates in
clause (ii)(B)(7) above, to the Class B-1 Certificates in
clause (ii)(B)(8) above and to the Class B-2 Certificates in
clause (ii)(B)(9) above and (y) the Class B-3 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero; and
(12) to the Class B-4 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over (ii)
the amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class AF-3W Certificate Insurer in
clause (ii)(B)(2) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2 Certificates in
clause (ii)(B)(3) above, to the Class M-3 Certificates in
clause (ii)(B)(4) above, to the Class M-4 Certificates in
clause (ii)(B)(5) above, to the Class M-5 Certificates in
clause (ii)(B)(6) above, to the Class M-6 Certificates in
clause (ii)(B)(7) above, to the Class B-1 Certificates in
clause (ii)(B)(8) above, to the Class B-2 Certificates in
clause (ii)(B)(9) above and to the Class B-3 Certificates in
clause (ii)(B)(10) above and (y) the Class B-4 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above shall be distributed in the following order of priority:
(A) to the Class AF-3W Certificate Insurer, to the extent of
any remaining Reimbursement Amount then owing to it, as well as
other amounts owed to the Class AF-3W Certificate Insurer;
(B) to the Holders of the Class M-1 Certificates, any Unpaid
Interest Amount for that Class;
(C) to the Holders of the Class M-2 Certificates, any Unpaid
Interest Amount for that Class;
(D) to the Holders of the Class M-3 Certificates, any Unpaid
Interest Amount for that Class;
(E) to the Holders of the Class M-4 Certificates, any Unpaid
Interest Amount for that Class;
(F) to the Holders of the Class M-5 Certificates, any Unpaid
Interest Amount for that Class;
(G) to the Holders of the Class M-6 Certificates, any Unpaid
Interest Amount for that Class;
(H) to the Holders of the Class B-1 Certificates, any Unpaid
Interest Amount for that Class;
(I) to the Holders of the Class B-2 Certificates, any Unpaid
Interest Amount for that Class;
(J) to the Holders of the Class B-3 Certificates, any Unpaid
Interest Amount for that Class;
(K) to the Holders of the Class B-4 Certificates, any Unpaid
Interest Amount for that Class;
(L) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(M) from funds on deposit in the Excess Reserve Fund Account
with respect to that Distribution Date, an amount equal to any Basis
Risk Carry Forward Amount with respect to the Principal Certificates
for that Distribution Date, first, concurrently to the Class A
Certificates, pro rata, based on their respective Class Certificate
Balances immediately prior to that Distribution Date, up to their
respective unpaid remaining Basis Risk Carry Forward Amounts
(provided that, if for any Distribution Date, after the allocation
of the remaining unpaid Basis Risk Carry Forward Amounts to the
Class A Certificates, the remaining unpaid Basis Risk Carry Forward
Amounts for any of the Class A Certificates is reduced to zero, any
amount of remaining unpaid Basis Risk Carry Forward Amounts that
would have been allocated to that Class A Certificate for that
Distribution Date will instead be allocated, pro rata, based on
their respective remaining unpaid Basis Risk Carry Forward Amounts,
to the other Class A Certificates to the extent the other Class A
Certificates have any remaining unpaid Basis Risk Carry Forward
Amounts), and, second, sequentially to the Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2,
Class B-3 and Class B-4 Certificates, in that order, in each case up
to their respective unpaid remaining Basis Risk Carry Forward
Amounts;
(N) to the Holders of the Class X Certificates, the remainder
of the Class X Distributable Amount not distributed pursuant to
Sections 4.01(a)(iii)(A)-(M); and
(O) to the Holders of the Class R-1 and Class R-2
Certificates, pro rata, any remaining amount in respect of the
Upper-Tier REMIC and Lower-Tier REMIC, respectively.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive the related Accrued
Certificate Interest Distribution Amount or the related Unpaid Interest Amount,
if any, then that unpaid amount will be recoverable by the holders of those
Classes, with interest thereon, on future Distribution Dates, as an Unpaid
Interest Amount, subject to the priorities described above. In the event the
Class Certificate Balance of any Class of Principal Certificates has been
reduced to zero, that Class of Certificates shall no longer be entitled to
receive any related unpaid Basis Risk Carry Forward Amounts except to the extent
the Class Certificate Balance is increased as a result of any Subsequent
Recovery.
(b) On each Distribution Date, all amounts representing Prepayment
Premiums from the Mortgage Loans received during the related Principal
Prepayment Period shall be distributed by the Securities Administrator to the
holders of the Class P Certificates.
(c) Upon any exercise of the purchase option set forth in Section
11.01(a), the Securities Administrator shall distribute to the holders of the
Class R-2 Certificates any amounts required to be distributed on the Class R-2
Certificates pursuant to Section 11.02.
(d) [Reserved]
(e) Notwithstanding the allocation of principal to the Class A
Certificates described in the preceding paragraphs, from and after the
Distribution Date on which the aggregate Class Certificate Balance of the
Subordinated Certificates and the principal balance of the Class X Certificates
have been reduced to zero, any principal distributions allocated to the Class A
Certificates shall be allocated pro rata to the Class A Certificates based on
their respective Class Certificate Balances, until their Class Certificate
Balances have been reduced to zero.
(f) On any Distribution Date, any Relief Act Interest Shortfalls and
Net Prepayment Interest Shortfalls for such Distribution Date shall be allocated
pro rata, as a reduction of the Accrued Certificate Interest Distribution Amount
for the Class A, Class M and Class B Certificates, based on the Accrued
Certificate Interest Distribution Amount to which such Classes would otherwise
be entitled on such Distribution Date.
Section 4.02 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Securities Administrator shall make available
to each Certificateholder, the Class AF-3W Certificate Insurer, the Depositor,
the Trustee and each Rating Agency a statement based upon the information
provided by the Servicers setting forth with respect to the related
distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments, Insurance
Proceeds, Condemnation Proceeds and Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amount included in such distribution and any remaining Unpaid Interest
Amount after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and the amount of all Basis Risk
Carry Forward Amount covered by withdrawals from the Excess Reserve Fund
Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between principal and
interest, including any Basis Risk Carry Forward Amount not covered by
amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such Distribution
Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date;
(vi) the amount of the Servicing Fees paid to or retained by the
Servicers with respect to such Distribution Date;
(vii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances reported by the
Servicers as outstanding as of the close of business on the Determination
Date immediately preceding such Distribution Date;
(ix) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Monthly Payment is delinquent 31 to 60
days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(x) for each of the preceding 12 calendar months, or all calendar
months since the related Cut-off Date, whichever is less, the aggregate
dollar amount of the Monthly Payments (A) due on all Outstanding Mortgage
Loans on each of the Due Dates in each such month and (B) delinquent 60
days or more on each of the Due Dates in each such month;
(xi) with respect to each Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan as of the close of business on the last
Business Day of the immediately preceding month prior to such Distribution
Date and the date of acquisition thereof;
(xii) the total number and principal balance of any REO Properties
(and market value, if available) as of the close of business on the last
Business Day of the immediately preceding month prior to such Distribution
Date;
(xiii) whether a Trigger Event has occurred and is continuing
(including the calculation of thereof and the aggregate outstanding
balance of all 60+ Day Delinquent Mortgage Loans);
(xiv) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xv) the aggregate amount of Applied Realized Loss Amounts incurred
during the preceding calendar month and aggregate Applied Realized Loss
Amounts through such Distribution Date;
(xvi) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Unpaid Interest Amounts;
(xvii) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xviii) the Prepayment Premiums collected by the Servicers;
(xix) the amount distributed on the Class X, Class P and Class R
Certificates;
(xx) the amount of any Subsequent Recoveries for such Distribution
Date; and
(xxi) the amount of any payment of principal or of interest on the
Class AF-3W Certificates to be paid from funds transferred from the Policy
Payments Account.
(b) The Securities Administrator's responsibility for providing the
above statement to the Certificateholders, each Rating Agency, the Trustee and
the Depositor is limited to the availability, timeliness and accuracy of the
information derived from the Master Servicer, the Servicers and the Responsible
Parties. The Securities Administrator shall provide the above statement via the
Securities Administrator's internet website. The Securities Administrator's
website will initially be located at ▇▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇.▇▇▇ and assistance in
using the website can be obtained by calling the Securities Administrator's
investor relations desk at (▇▇▇) ▇▇▇-▇▇▇▇. The Securities Administrator will
also make a paper copy of the above statement available upon request.
(c) Upon request, within a reasonable period of time after the end
of each calendar year, the Securities Administrator shall cause to be furnished
to each Person who at any time during the calendar year was a Certificateholder,
a statement containing the information set forth in clauses (a)(i), (a)(ii),
(a)(iii) and (a)(vii) of this Section 4.02 aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Securities Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Securities Administrator pursuant to any requirements of the
Code as from time to time in effect.
The Securities Administrator shall be entitled to rely on
information provided by third parties for purposes of preparing the foregoing
report, but shall not be responsible for the accuracy of such information.
Section 4.03 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Securities Administrator
to the most junior Class of Subordinated Certificates then Outstanding in
reduction of the Class Certificate Balance thereof. In the event, Applied
Realized Loss Amounts are allocated to any Class of Certificates, their Class
Certificate Balances shall be reduced by the amount so allocated and no funds
shall be distributed with respect to the written down amounts or with respect to
interest or Basis Risk Carry Forward Amounts on the written down amounts on that
Distribution Date or any future Distribution Dates, even if funds are otherwise
available therefor.
Notwithstanding the foregoing, the Class Certificate Balance of each
Class of Subordinated Certificates that has been previously reduced by Applied
Realized Loss Amounts will be increased, in that order or seniority, by the
amount of the Subsequent Recoveries (but not in excess of the Applied Realized
Loss Amount allocated to the applicable Class of Subordinated Certificates).
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Securities Administrator in accordance with the
definition of "LIBOR." Until all of the LIBOR Certificates are paid in full, the
Securities Administrator will at all times retain at least four Reference Banks
for the purpose of determining LIBOR with respect to each LIBOR Determination
Date. The Securities Administrator initially shall designate the Reference Banks
(after consultation with the Depositor). Each "Reference Bank" shall be a
leading bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Securities Administrator and shall have an established place
of business in London. If any such Reference Bank should be unwilling or unable
to act as such or if the Securities Administrator should terminate its
appointment as Reference Bank, the Securities Administrator shall promptly
appoint or cause to be appointed another Reference Bank (after consultation with
the Depositor). The Securities Administrator shall have no liability or
responsibility to any Person for (i) the selection of any Reference Bank for
purposes of determining LIBOR or (ii) any inability to retain at least four
Reference Banks which is caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Securities Administrator on
each LIBOR Determination Date so long as the LIBOR Certificates are Outstanding
on the basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Securities Administrator shall
not have any liability or responsibility to any Person for its inability,
following a good faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the definition
of LIBOR. The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Trustee.
Section 4.05 Certain Matters Regarding the Class AF-3W Certificate
Insurer (a) Each of the Depositor, the Master Servicer, the Securities
Administrator and the Trustee, and, by accepting its Class AF-3W Certificate,
each Holder of a Class AF-3W Certificate, agrees that unless a Class AF-3W
Certificate Insurer Default has occurred and is continuing, the Class AF-3W
Certificate Insurer shall have the right to exercise all rights of the Holders
of the Class AF-3W Certificates under this Agreement (except as provided in
Section 5.07 hereof) without any further consent of the Holders of the Class
AF-3W Certificates.
In addition, each Holder of Class AF-3W Certificates agrees that,
unless a Class AF-3W Certificate Insurer Default has occurred and is continuing,
the rights specifically set forth above may be exercised by the Holders of Class
AF-3W Certificates only with the prior written consent of the Class AF-3W
Certificate Insurer.
(b) Unless a Class AF-3W Certificate Insurer Default has occurred
and is continuing, the Trustee shall not undertake any litigation pursuant to
Section 8.03(i) at the request or direction of the Holders of the Class AF-3W
Certificates, without the prior written consent of the Class AF-3W Certificate
Insurer, which consent shall not be unreasonably withheld; provided, however,
nothing contained herein shall prohibit or prevent the Trustee from defending
itself or the Trust Fund or taking any action related thereto.
Section 4.06 Claims Upon the Class AF-3W Certificate Insurance
Policy; Policy Payments Account. (a) If, at or before 12:00 p.m., New York time,
on the second Business Day prior to a Distribution Date, the Securities
Administrator determines that the Class AF-3W Certificate Insured Amount will be
greater than zero, then the Securities Administrator shall give notice to the
Class AF-3W Certificate Insurer by telephone or telecopy of the amount of such
Class AF-3W Certificate Insured Amount. Such notice of such Class AF-3W
Certificate Insured Amount shall be confirmed in writing in the form set forth
as Exhibit A to the Endorsement to the Class AF-3W Certificate Insurance Policy,
to the Class AF-3W Certificate Insurer and the Fiscal Agent (as defined in the
Class AF-3W Certificate Insurance Policy), if any, at or before 12:00 p.m., New
York time, on the second Business Day prior to such Distribution Date. Following
Receipt (as defined in the Class AF-3W Certificate Insurance Policy) by the
Class AF-3W Certificate Insurer of such notice in such form, the Class AF-3W
Certificate Insurer or the Fiscal Agent will pay any amount payable under the
Class AF-3W Certificate Insurance Policy on the later to occur of (i) 12:00
p.m., New York time, on the second Business Day following such receipt and (ii)
12:00 p.m., New York time, on the Distribution Date to which such Class AF-3W
Certificate Insured Amount relates, as provided in the Endorsement to the Class
AF-3W Certificate Insurance Policy.
(b) The Securities Administrator shall establish a segregated
non-interest bearing trust account for the benefit of Holders of the Class AF-3W
Certificates and the Class A-F-3W Certificate Insurer referred to herein as the
"Policy Payments Account" over which the Securities Administrator shall have
exclusive control and sole right of withdrawal. The Securities Administrator
shall deposit any amount paid under the Class AF-3W Certificate Insurance Policy
in the Policy Payments Account and distribute such amount only for purposes of
payment to Holders of Class AF-3W Certificates of the Class AF-3W Certificate
Insurance Amount or any amount in respect of a Preference Claim (as defined in
the Class AF-3W Certificate Insurance Policy) for which a claim under the Class
AF-3W Certificate Insurance Policy was made, and such amount may not be applied
to satisfy any costs, expenses or liabilities of any Servicer, the Depositor,
the Master Servicer, the Securities Administrator, the Trustee or the Trust
Fund. Amounts paid under the Class AF-3W Certificate Insurance Policy shall be
transferred to the Distribution Account in accordance with the next succeeding
paragraph and disbursed by the Securities Administrator to Holders of Class
AF-3W Certificates in accordance with this Section 4.06(b) (or, in the case of
an amount in respect of a Preference Claim, to the related Holders of Class
AF-3W Certificates as contemplated in Section 4.06(d)). It shall not be
necessary for such payments to be made by checks or wire transfers separate from
the checks or wire transfers used to pay the other distributions to be made to
such Holders pursuant to Section 4.01. However, the amount of any payment of
principal of or interest on the Class AF-3W Certificates to be paid from funds
transferred from the Policy Payments Account shall be noted as provided in
Section 4.06(c) and in the statement to be furnished to Holders of the Class
AF-3W Certificates pursuant to Section 4.02. Funds held in the Policy Payments
Account shall not be invested.
On any Distribution Date with respect to which a claim has been made
under the Class AF-3W Certificate Insurance Policy, the amount of any funds
received by the Securities Administrator as a result of any claim under the
Class AF-3W Certificate Insurance Policy, to the extent required to pay the
Class AF-3W Certificate Insured Amount on such Distribution Date, shall be
withdrawn from the Policy Payments Account and deposited in the Distribution
Account and applied by the Securities Administrator, directly to the payment in
full of the Class AF-3W Certificate Insured Amount due on the Class AF-3W
Certificates. Funds received by the Securities Administrator as a result of any
claim under the Class AF-3W Certificate Insurance Policy shall be deposited by
the Securities Administrator in the Policy Payments Account and used solely for
payment to the Holders of the Class AF-3W Certificates and may not be applied to
satisfy any costs, expenses or liabilities of any Servicer, the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Trust Fund.
Any funds remaining in the Policy Payments Account on the first Business Day
following a Distribution Date shall be remitted to the Class AF-3W Certificate
Insurer, pursuant to the instructions of the Class AF-3W Certificate Insurer, by
the end of such Business Day.
(c) The Securities Administrator shall keep a complete and accurate
record of the amount of interest and principal paid in respect of any Class
AF-3W Certificate from moneys received under the Class AF-3W Certificate
Insurance Policy. The Class AF-3W Certificate Insurer shall have the right to
inspect such records at reasonable times during normal business hours upon two
Business Days' prior notice to the Securities Administrator.
(d) The Securities Administrator shall promptly notify the Class
AF-3W Certificate Insurer and its fiscal agent of any proceeding or the
institution of any action, of which a Responsible Officer of the Securities
Administrator has actual knowledge, seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law (a
"Preference Claim") of any Class AF-3W Certificate Insured Amount made with
respect to the Class AF-3W Certificates. Each Holder of the Class AF-3W
Certificates, by its purchase of such Certificates, the Servicers, the Master
Servicer, the Securities Administrator, the Depositor and the Trustee hereby
agree that the Class AF-3W Certificate Insurer (so long as no Class AF-3W
Certificate Insurer Default has occurred and is continuing) may at any time
during the continuation of any proceeding relating to a Preference Claim direct
all matters relating to such Preference Claim, including, without limitation,
(i) the direction of any appeal of any order relating to such Preference Claim
and (ii) the posting of any surety, supersedeas or performance bond pending any
such appeal. In addition and without limitation of the foregoing, the Class
AF-3W Certificate Insurer shall be subrogated to the rights of the Servicers,
the Depositor, the Master Servicer, the Securities Administrator, the Trustee
and each Holder of the Class AF-3W Certificates in the conduct of any such
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
(e) The Trustee designates, appoints, authorizes and directs the
Securities Administrator to deliver on behalf of the Trustee the notice in
accordance with Section 4.06(a) and to make, on behalf of and with full power to
bind the Trustee, any of the agreements or covenants of the Trustee contained
herein. To the extent necessary, this Agreement shall constitute an irrevocable
limited power of attorney, coupled with an interest, from the Trustee to the
Securities Administrator, to accomplish the foregoing.
Section 4.07 Effect of Payments by Class AF-3W Certificate Insurer;
Subrogation. Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on any of the Class AF-3W Certificates which
is made with moneys received pursuant to the terms of the Class AF-3W
Certificate Insurance Policy shall not, other than for federal income tax
purposes, be considered payment of such Certificates from the Trust Fund and
shall not, other than for federal income tax purposes, result in the payment of
or the provision for the payment of the principal of or interest on such
Certificates within the meaning of Section 4.01. The Depositor, the Master
Servicer, the Securities Administrator and the Trustee acknowledge, and each
Holder of a Class AF-3W Certificate by its acceptance of such a Certificate
agrees, that without the need for any further action on the part of the Class
AF-3W Certificate Insurer, the Depositor, the Master Servicer, the Securities
Administrator or the Trustee (a) to the extent the Class AF-3W Certificate
Insurer makes payments, directly or indirectly, on account of principal of or
interest on any Class AF-3W Certificates to the Holders of such Certificates,
the Class AF-3W Certificate Insurer will be fully subrogated to the rights of
such Holders to receive such principal and interest from the Trust Fund and (b)
the Class AF-3W Certificate Insurer shall be paid such principal and interest
but only from the sources and in the manner provided herein for the payment of
such principal and interest.
The Trustee, the Depositor, the Master Servicer and the Securities
Administrator shall cooperate in all respects with any reasonable request by the
Class AF-3W Certificate Insurer for action to preserve or enforce the Class
AF-3W Certificate Insurer's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Holders as otherwise set
forth herein.
Section 4.08 Notices to Class AF-3W Certificate Insurer. All
notices, statements, reports, certificates or opinions required by this
Agreement to be sent to any other party hereto or to any of the Holders of the
Class AF-3W Certificates shall also be sent to the Class AF-3W Certificate
Insurer until the later of (a) the date upon which the Certificate Principal
Balance of the Class AF-3W Certificates has been reduced to zero and all Class
AF-3W Certificate Insured Amounts have been paid and (b) the date the Term of
This Policy (as defined in the Class AF-3W Certificate Insurance Policy) ends.
Section 4.09 Securities Administrator To Hold Class AF-3W
Certificate Insurance Policy. The Securities Administrator shall hold the Class
AF-3W Certificate Insurance Policy in trust as agent for the Holders of the
Class AF-3W Certificates for the purpose of making claims thereon and
distributing the proceeds thereof. Upon the later of (a) the date upon which the
Certificate Principal Balance of the Class AF-3W Certificates has been reduced
to zero and all Class AF-3W Certificate Insured Amounts have been paid and (b)
the date the Term of This Policy (as defined in the Class AF-3W Certificate
Insurance Policy) ends, Securities Administrator shall surrender the Class AF-3W
Certificate Insurance Policy to the Class AF-3W Certificate Insurer for
cancellation. Neither the Class AF-3W Certificate Insurance Policy nor the
amounts paid on the Class AF-3W Certificate Insurance Policy will constitute
part of the Trust Fund or assets of any Trust REMIC created by this Agreement.
Each Holder of Class AF-3W Certificates, by accepting its Certificates, appoints
the Securities Administrator as attorney in fact for the purpose of making
claims under the Class AF-3W Certificate Insurance Policy.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount which must be in excess of the applicable minimum denomination)
and aggregate denominations per Class set forth in the Preliminary Statement.
The Depositor hereby directs the Securities Administrator to
register the Class X and Class P Certificates in the name of the Depositor or
its designee. On a date as to which the Depositor notifies the Securities
Administrator, the Depositor hereby directs the Securities Administrator to
transfer the Class X and Class P Certificates in the name of the NIM Trustee or
such other name or names as the Depositor shall request, and to deliver the
Class X and Class P Certificates to the NIM Trustee, or to such other Person or
Persons as the Depositor shall request.
Subject to Section 11.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either (x) by wire transfer in immediately available funds to the account of
such Holder at a bank or other entity having appropriate facilities therefor as
directed by that Certificateholder by written wire instructions provided to the
Securities Administrator or (y), in the event that no wire instructions are
provided to the Securities Administrator, by check mailed by first class mail to
such Certificateholder at the address of such Holder appearing in the
Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Securities Administrator by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Securities
Administrator shall bind the Securities Administrator, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of any such Certificates or did not hold such office
at the date of such Certificate. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless authenticated by the
Securities Administrator by manual signature, and such authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly executed and delivered hereunder. All Certificates
shall be dated the date of their authentication. On the Closing Date, the
Securities Administrator shall authenticate the Certificates to be issued at the
direction of the Depositor, or any Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Securities Administrator shall maintain, or
cause to be maintained in accordance with the provisions of Section 5.06, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate, the Securities
Administrator shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Securities Administrator duly executed by the Holder thereof
or his attorney duly authorized in writing. In the event, the Depositor or an
Affiliate of the Depositor transfers the Class X Certificates, or a portion
thereof, to another Affiliate, it shall notify the Securities Administrator in
writing of the affiliated status of the transferee. The Trustee and the
Securities Administrator shall have no liability regarding the lack of notice
with respect thereto.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Securities
Administrator in accordance with the Securities Administrator's customary
procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. Except
with respect to (i) the initial transfer of the Class X or Class P to the
Depositor or an Affiliate of the Depositor on the Closing Date, (ii) the
transfer of the Class X or Class P Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class X or Class P Certificates from the NIM
Issuer or the NIM Trustee to the Depositor or any Affiliate of the Depositor, in
the event that a transfer of a Private Certificate which is a Physical
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer shall certify to
the Securities Administrator in writing the facts surrounding the transfer in
substantially the form set forth in Exhibit I (the "Transferor Certificate") and
either (i) there shall be delivered to the Securities Administrator a letter in
substantially the form of Exhibit J (the "Rule 144A Letter") or (ii) there shall
be delivered to the Securities Administrator at the expense of the transferor an
Opinion of Counsel that such transfer may be made without registration under the
Securities Act. In the event that a transfer of a Private Certificate which is a
Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Securities Administrator shall cooperate with the
Depositor in providing the Rule 144A information referenced in the preceding
sentence, including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee and the
Depositor and each Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
Except with respect to (i) the initial transfer of the Class X,
Class P or Class R Certificates to the Depositor or an Affiliate of the
Depositor on the Closing Date, (ii) the transfer of the Class X or Class P
Certificates to the NIM Issuer or the NIM Trustee or (iii) a transfer of the
Class X or Class P Certificates from the NIM Issuer or the NIM Trustee to the
Depositor or any Affiliate of the Depositor, no transfer of an ERISA-Restricted
Certificate shall be made unless the Securities Administrator shall have
received either (i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Securities
Administrator (in the event such Certificate is a Private Certificate or a
Residual Certificate, such requirement is satisfied only by the Securities
Administrator's receipt of a representation letter from the transferee
substantially in the form of Exhibit J), to the effect that such transferee is
not an employee benefit plan or arrangement subject to Section 406 of ERISA, a
plan subject to Section 4975 of the Code or a plan subject to any Federal, state
or local law ("Similar Law") materially similar to the foregoing provisions of
ERISA or the Code, nor a Person acting on behalf of any such plan or arrangement
or using the assets of any such plan or arrangement to effect such transfer,
(ii) in the case of an ERISA-Restricted Certificate (other than a Residual
Certificate or Class P Certificate) that has been the subject of an
ERISA-Qualifying Underwriting, a representation that the purchaser is an
insurance company that is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates satisfy the requirements for exemptive
relief under Sections I and III of PTCE 95-60 or (iii) in the case of any
ERISA-Restricted Certificate other than a Residual Certificate or Class P
Certificate presented for registration in the name of an employee benefit plan
subject to Title I of ERISA, a plan or arrangement subject to Section 4975 of
the Code (or comparable provisions of any subsequent enactments), or a plan
subject to Similar Law, or a trustee of any such plan or any other person acting
on behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee, the Securities
Administrator and the Depositor, which Opinion of Counsel shall not be an
expense of the Trustee, the Depositor, the Securities Administrator or the Trust
Fund, addressed to the Securities Administrator and the Depositor, to the effect
that the purchase and holding of such ERISA-Restricted Certificate will not
constitute or result in a non-exempt prohibited transaction within the meaning
of ERISA, Section 4975 of the Code or any Similar Law and will not subject the
Trustee, the Depositor, the Master Servicer, any other servicer or the
Securities Administrator to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the preceding
sentence, with respect to an ERISA-Restricted Certificate that is not a Private
Certificate or a Residual Certificate, in the event the representation letter
referred to in the preceding sentence is not furnished, such representation
shall be deemed to have been made to the Securities Administrator by the
transferee's (including an initial acquirer's) acceptance of the
ERISA-Restricted Certificates. Notwithstanding anything else to the contrary
herein, (a) any purported transfer of an ERISA Restricted Certificate, other
than a Class P Certificate or a Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect and (b) any purported transfer of
a Residual Certificate or Class P Certificate to a transferee that does not make
the representation in clause (i) above shall be void and of no effect.
None of the Class R or Class P Certificates may be sold to any
employee benefit plan subject to Title I of ERISA, any plan subject to Section
4975 of the Code, or any plan subject to any Similar Law or any Person investing
on behalf of or with plan assets of such plan.
Neither the Securities Administrator nor the Trustee shall have any
duty to monitor transfers of beneficial interests in any Book-Entry Certificate,
and neither the Securities Administrator nor the Trustee shall be under
liability to any Person for any registration of transfer of any ERISA-Restricted
Certificate that is in fact not permitted by this Section 5.02(b) or for making
any payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the transfer was registered by the Securities Administrator in
accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Securities Administrator shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under subparagraph (b) above,
the Securities Administrator shall have been furnished with an affidavit
(a "Transfer Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit H;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. Neither the Securities
Administrator nor the Trustee shall have any liability to any Person for
any registration of Transfer of a Residual Certificate that is in fact not
permitted by Section 5.02(b) and this Section 5.02(c) or for making any
payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement.
The Securities Administrator shall be entitled but not obligated to
recover from any Holder of a Residual Certificate that was in fact not a
Permitted Transferee at the time it became a Holder or, at such subsequent
time as it became other than a Permitted Transferee, all payments made on
such Residual Certificate at and after either such time. Any such payments
so recovered by the Securities Administrator shall be paid and delivered
by the Securities Administrator to the last preceding Permitted Transferee
of such Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund, the
Depositor, the Trustee, or the Securities Administrator, to the effect that the
elimination of such restrictions will not cause either Trust REMIC to fail to
qualify as a REMIC at any time that the Certificates are Outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Securities Administrator, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial interest
in, a Residual Certificate is not transferred, directly or indirectly, to a
Person that is not a Permitted Transferee and (b) to provide for a means to
compel the Transfer of a Residual Certificate which is held by a Person that is
not a Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Securities Administrator except to another Depository; (ii) the Depository shall
maintain book entry records with respect to the Certificate Owners and with
respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee and the
Securities Administrator shall deal with the Depository, Depository Participants
and indirect participating firms as representatives of the Certificate Owners of
the Book-Entry Certificates for purposes of exercising the rights of holders
under this Agreement, and requests and directions for and votes of such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Securities Administrator
may rely and shall be fully protected in relying upon information furnished by
the Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and persons
shown on the books of such indirect participating firms as direct or indirect
Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or (y)
the Depositor notifies the Depository of its intent to terminate the book entry
system through the Depository, the Depository Participants holding beneficial
interests in the Book-Entry Certificates agree to initiate such termination, the
Securities Administrator shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
definitive, fully registered Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Securities
Administrator of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Securities Administrator shall issue the Definitive Certificates. Neither the
Depositor nor the Securities Administrator shall be liable for any delay in
delivery of such instruction and each may conclusively rely on, and shall be
protected in relying on, such instructions. The Depositor shall provide the
Securities Administrator with an adequate inventory of Certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Securities Administrator, to the extent applicable with respect
to such Definitive Certificates and the Securities Administrator shall recognize
the Holders of the Definitive Certificates as Certificateholders hereunder;
provided, that the Securities Administrator shall not by virtue of its
assumption of such obligations become liable to any party for any act or failure
to act of the Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Securities
Administrator, duly executed by the Certificateholder or his attorney duly
authorized in writing. Each Certificate presented or surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Securities Administrator in accordance with its customary practice. No
service charge shall be made for any registration of transfer or exchange of
Private Certificates, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Securities Administrator, or
the Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Depositor, the Trustee, the Class AF-3W Certificate Insurer and the Securities
Administrator such security or indemnity as may be required by them to hold each
of them harmless, then, in the absence of notice to the Securities Administrator
that such Certificate has been acquired by a protected purchaser, the Securities
Administrator shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 5.03, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
5.03 shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. The Trustee, the Depositor, the
Class AF-3W Certificate Insurer, the Securities Administrator and any agent of
the Depositor, the Class AF-3W Certificate Insurer, Securities Administrator or
the Trustee may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and none of
the Trustee, the Depositor, the Class AF-3W Certificate Insurer, the Securities
Administrator or any agent of the Trustee, the Depositor, the Class AF-3W
Certificate Insurer or the Securities Administrator shall be affected by any
notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication which such Certificateholders propose to
transmit, or if the Depositor or a Servicer shall request such information in
writing from the Securities Administrator, then the Securities Administrator
shall, within ten Business Days after the receipt of such request, provide the
Depositor, such Servicer or such Certificateholders at such recipients' expense
the most recent list of the Certificateholders of such Trust Fund held by the
Securities Administrator, if any. The Depositor and every Certificateholder, by
receiving and holding a Certificate, agree that the Securities Administrator
shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator will maintain or cause to be maintained at its expense an office
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange. The Securities Administrator initially designates its
office for such purposes, located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services - GSAA Home
Equity Trust 2005-12. The Securities Administrator will give prompt written
notice to the Certificateholders of any change in such location of any such
office or agency.
Section 5.07 Rights of the Class AF-3W Certificate Insurer to
Exercise Rights of Class AF-3W Certificateholders. By accepting its Class AF-3W
Certificate, each Class AF-3W Certificateholder agrees that, unless a Class
AF-3W Certificate Insurer Default exists, the Class AF-3W Certificate Insurer
shall be deemed to be the Class AF-3W Certificateholders for all purposes (other
than with respect to the receipt of payment on the Class AF-3W Certificates) and
shall have the right to exercise all rights of the Class AF-3W
Certificateholders under this Agreement and under the Class AF-3W Certificates
without any further consent of the Class AF-3W Certificateholders.
Section 5.08 Class AF-3W Certificate Insurer Default.
Notwithstanding anything elsewhere in this Agreement or in the Certificates to
the contrary, if a Class AF-3W Certificate Insurer Default exists, or if and to
the extent the Class AF-3W Certificate Insurer has delivered its written
renunciation of all of its rights under this Agreement, all provisions of this
Agreement which (a) permit the Class AF-3W Certificate Insurer to exercise
rights of the Class AF-3W Certificateholders, (b) restrict the ability of the
Certificateholders, the Master Servicer, the Securities Administrator or the
Trustee to act without the consent or approval of the Class AF-3W Certificate
Insurer, (c) provide that a particular act or thing must be acceptable to the
Class AF-3W Certificate Insurer, (d) permit the Class AF-3W Certificate Insurer
to direct (or otherwise to require) the actions of the Trustee, the Master
Servicer, the Securities Administrator or the Certificateholders, (e) provide
that any action or omission taken with the consent, approval or authorization of
the Class AF-3W Certificate Insurer shall be authorized hereunder or shall not
subject the party taking or omitting to take such action to any liability
hereunder or (f) have a similar effect, shall be of no further force and effect
and the Trustee shall administer the Trust Fund and perform its obligations
hereunder solely for the benefit of the Holders of the Certificates. Nothing in
the foregoing sentence, nor any action taken pursuant thereto or in compliance
therewith, shall be deemed to have released the Class AF-3W Certificate Insurer
from any obligation or liability it may have to the Class AF-3W
Certificateholders, under the Class AF-3W Certificate Insurance Policy or under
applicable law; provided, however, that any rights relating to payment
(including reimbursements and payment of Premium), receipt of notices or
reports, or consent rights relating to amendments to this Agreement or consent
rights relating to the optional termination provided for in Section 11.01 of
this Agreement shall continue during any such Class AF-3W Certificate Insurer
Default. At such time as the Class AF-3W Certificates are no longer outstanding
hereunder, and no amounts owed to the Class AF-3W Certificate Insurer hereunder
remain unpaid and the Class AF-3W Certificate Insurance Policy is marked
cancelled and returned to the Class AF-3W Certificate Insurer, the Class AF-3W
Certificate Insurer's rights hereunder (other than rights of indemnification)
shall terminate.
ARTICLE VI
THE DEPOSITOR
Section 6.01 Respective Liabilities of the Depositor. The Depositor
shall be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor. The Depositor
will keep in full effect its existence, rights and franchises as a corporation
under the laws of the United States or under the laws of one of the states
thereof and will each obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, or
any of the Mortgage Loans and to perform its respective duties under this
Agreement.
Any Person into which the Depositor may be merged or consolidated,
or any Person resulting from any merger or consolidation to which the Depositor
shall be a party, or any Person succeeding to the business of the Depositor,
shall be the successor of the Depositor, as the case may be, hereunder, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided,
however, that such merger, consolidation or succession does not adversely affect
the then current rating or ratings on the Principal Certificates without
reference to the Class AF-3W Certificate Insurance Policy.
Section 6.03 Limitation on Liability of the Depositor and Others.
Neither the Depositor nor any of its directors, officers, employees or agents
shall be under any liability to the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor or any
such Person from any liability which would otherwise be imposed by reasons of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder. The
Depositor and any director, officer, employee, Affiliate or agent of the
Depositor may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor and any director, officer, employee or agent of the
Depositor shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates or any other unanticipated
or extraordinary expense, other than any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that the Depositor may in its discretion undertake
any such action (or direct the Trustee to undertake such actions for the benefit
of the Certificateholders) that it may deem necessary or desirable in respect of
this Agreement and the rights and duties of the parties hereto and interests of
the Trustee and the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, the Depositor shall be
entitled to be reimbursed therefor out of the Distribution Account.
Section 6.04 Servicing Compliance Review. Promptly upon receipt from
each Servicer of its annual statement of compliance and accountant's report
described in the applicable Step 2 Assignment Agreement the Master Servicer
shall furnish a copy thereof to the Depositor. Promptly after the Depositor's
receipt thereof, the Depositor shall review the same and, if applicable, consult
with such Servicer as to the nature of any defaults by such Servicer in the
fulfillment of any of its Servicer's obligations under the applicable Servicing
Agreement.
Section 6.05 Option to Purchase Defaulted Mortgage Loans. The
Depositor shall have the option, but is not obligated, to purchase from the
Trust any Mortgage Loan that is 90 days or more delinquent. The purchase price
therefor, which shall be deposited in the Distribution Account, shall be 100% of
the unpaid principal balance of such Mortgage Loan, plus all related accrued and
unpaid interest, and the amount of any unreimbursed Servicing Advances made by
the Servicers or the Master Servicer related to the Mortgage Loan.
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default. If an Event of Default described in
any Servicing Agreement shall occur with respect to the related Servicer then,
and in each and every such case, so long as such Event of Default shall not have
been remedied, the Master Servicer may, or at the direction of
Certificateholders entitled to a majority of the Voting Rights the Master
Servicer shall, by notice in writing to the applicable Servicer (with a copy to
each Rating Agency), terminate all of the rights and obligations of such
Servicer under the applicable Servicing Agreement and in and to the Mortgage
Loans serviced by such Servicer and the proceeds thereof. The Holders of
Certificates evidencing at least 66% of the Voting Rights of Certificates
affected by a Event of Default may waive such Event of Default; provided,
however, that (a) an Event of Default with respect to any Servicer's obligation
to make Monthly Advances may be waived only by all of the holders of the
Certificates affected by such Event of Default and (b) no such waiver is
permitted that would materially adversely affect any non-consenting
Certificateholder. On and after the receipt by such Servicer of such written
notice of termination, all authority and power of such Servicer hereunder,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Master Servicer. The Master Servicer is hereby authorized and
empowered to execute and deliver, on behalf of such 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.
Section 7.02 Master Servicer to Act; Appointment of Successor.
Within 120 days after the Master Servicer gives, and the applicable Servicer
receives a notice of termination pursuant to Section 7.01, the Master Servicer
shall, subject to and to the extent provided in Section 7.03, and subject to the
rights of the Master Servicer to appoint a successor Servicer pursuant to this
Section 7.02, be the successor to the Servicer in its capacity as servicer under
the applicable Servicing Agreement and the transactions set forth or provided
for herein and in such Servicing Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions of such Servicing Agreement and applicable law
including the obligation to make Monthly Advances or Servicing Advances pursuant
to such Servicing Agreement (it being understood and agreed that if any Servicer
fails to make an Advance, the Master Servicer shall do so unless a determination
has been made that such Advance would constitute a Nonrecoverable Monthly
Advance or a Nonrecoverable Servicing Advance). As compensation therefor, the
Master Servicer shall be entitled to all funds relating to the Mortgage Loans
that the Servicer would have been entitled to charge to the Collection Account
if the Servicer had continued to act under the Servicing Agreement including, if
the Servicer was receiving the Servicing Fee at the Servicing Fee Rate set forth
in the Servicing Agreement (as set forth in the Mortgage Loan Schedule with
respect to the related Mortgage Loans), such Servicing Fee and the income on
investments or gain related to the Collection Account.
Notwithstanding the foregoing, the Master Servicer may, if it shall
be unwilling to so act, or shall, if it is prohibited by applicable law from
making Monthly Advances and Servicing Advances pursuant to the applicable
Servicing Agreement, or if it is otherwise unable to so act, or, at the written
request of Certificateholders entitled to a majority of the Voting Rights,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each Rating
Agency, as the successor to such Servicer under the applicable Servicing
Agreement in the assumption of all or any part of the responsibilities, duties
or liabilities of such Servicer. No such appointment of a successor to a
Servicer hereunder shall be effective until the Depositor shall have consented
thereto. Any successor to such Servicer shall be an institution which is a
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved seller/servicer in good standing, which has
a net worth of at least $25,000,000, which is willing to service the Mortgage
Loans and which executes and delivers to the Depositor and the Master Servicer
an agreement accepting such delegation and assignment, containing an assumption
by such Person of the rights, powers, duties, responsibilities, obligations and
liabilities of such terminated Servicer, (other than liabilities of such
terminated Servicer incurred prior to termination of such Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement;
provided, that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced, as a result of such assignment and delegation.
Pending appointment of a successor to a Servicer hereunder, the Master Servicer,
unless the Master Servicer is prohibited by law from so acting, shall, subject
to this Section 7.02, act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Master Servicer may make
such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it, the Depositor and such successor shall agree; provided,
however, that no such compensation shall be in excess of the Servicing Fee Rate
and amounts paid to the Servicer from investments. The Master Servicer and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Master Servicer nor any
other successor to a Servicer shall be deemed to be in default hereunder by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused by
the failure of the predecessor Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
Any successor Servicer shall give notice to the Mortgagors of such
change of Servicer, in accordance with applicable federal and state law, and
shall, during the term of its service as Servicer, maintain in force the policy
or policies that each Servicer is required to maintain pursuant to the
applicable Servicing Agreement.
Notwithstanding the foregoing, the Master Servicer may not terminate
a Servicer without cause.
Section 7.03 Master Servicer to Act as Servicer. In the event that a
Servicer shall for any other reason no longer be the Servicer, the Master
Servicer or another successor Servicer, shall thereupon assume all of the rights
and obligations of the predecessor Servicer hereunder arising thereafter
pursuant to Section 7.02.
Section 7.04 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Securities
Administrator shall give prompt written notice thereof to Certificateholders,
the Class AF-3W Certificate Insurer and to each Rating Agency.
(b) Promptly after the occurrence of any Event of Default, the
Securities Administrator shall transmit by mail to all Certificateholders, the
Class AF-3W Certificate Insurer and each Rating Agency notice of each such Event
of Default hereunder known to the Securities Administrator, unless such Event of
Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIANS
Section 8.01 Duties of the Trustee and the Custodians. The Trustee,
before the occurrence of a Master Servicer Event of Default and after the curing
of all Master Servicer Events of Default that may have occurred, shall undertake
to perform such duties and only such duties as are specifically set forth in
this Agreement. In case a Master Servicer Event of Default has occurred and
remains uncured, the Trustee shall exercise such of the rights and powers vested
in it by this Agreement, and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
The Trustee and the Custodians, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee or the Custodians, as applicable, that are
specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether on their face they are in the
form required by this Agreement, or with respect to the documents in the
respective Custodial Files whether they satisfy the review criteria set forth in
Section 2.02. Neither the Trustee nor the Custodians shall be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee or any of the Custodians from liability for its own negligent action,
its own negligent failure to act or its own bad faith or willful misfeasance;
provided, however, that:
(a) unless a Master Servicer Event of Default of which a Responsible
Officer of the Trustee obtains actual knowledge has occurred and is continuing,
the duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable except for
the performance of the duties and obligations specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee, and the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believed in good faith to be genuine and
to have been duly executed by the proper authorities respecting any matters
arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 Custodial Responsibilities. Each of the Custodians
shall provide access to the Mortgage Loan documents in possession of such
Custodian regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Trustee, the Certificateholders, the Class AF-3W
Certificate Insurer, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon two (2) Business Days prior written
request and during normal business hours at the office of such Custodian;
provided, however, that, unless otherwise required by law or any regulatory or
administrative agency (including the FDIC), such Custodian shall not be required
to provide access to such records and documentation if the provision thereof
would violate the legal right to privacy of any Mortgagor. Each of the
Custodians shall allow representatives of the above entities to photocopy any of
the records and documentation and shall provide equipment for that purpose at
the expense of the Trust that covers such Custodians actual costs.
Upon receipt of a request for release by a Servicer made in
accordance with the applicable Servicing Agreement (including, in the case of
▇▇▇▇▇ Fargo, as a Custodian, a request for release in the form of Exhibit C
hereto), the applicable Custodian shall release within five Business Days the
related Mortgage File to such Servicer and the Trustee shall execute and deliver
to such Servicer, without recourse, a request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage (furnished by such Servicer), together with the
Mortgage Note.
Section 8.03 Certain Matters Affecting the Trustee and the
Custodians. Except as otherwise provided in Section 8.01:
(a) the Trustee and the Custodians may request and rely upon and
shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, Opinion of Counsel, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties and the
Trustee and the Custodians shall have no responsibility to ascertain or confirm
the genuineness of any signature of any such party or parties;
(b) the Trustee and the Custodians may consult with counsel,
financial advisers or accountants and the advice of any such counsel, financial
advisers or accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(c) the Trustee and the Custodians shall not be liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not assured to the Trustee by the security afforded to it by the terms
of this Agreement, the Trustee may require indemnity satisfactory to the Trustee
against such cost, expense or liability as a condition to taking any such
action. The reasonable expense of every such examination shall be paid by the
applicable Servicer or, if paid by the Trustee, shall be repaid by the Servicer
upon demand from the applicable Servicer's own funds;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) neither the Trustee nor the Custodians shall be required to risk
or expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security;
(h) unless a Responsible Officer of the Trustee has actual knowledge
of the occurrence of a Master Servicer Event of Default or an Event of Default,
the Trustee shall not be deemed to have knowledge of a Master Servicer Event of
Default or an Event of Default, until a Responsible Officer of the Trustee shall
have received written notice thereof; and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
(j) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act;
(k) the Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the powers granted
hereunder; and
(l) notwithstanding anything to the contrary in any Servicing
Agreement, the Trustee shall not consent to a Servicer's request of assigning
the Servicing Agreement or the servicing rights thereunder to any other party.
Section 8.04 Trustee and Custodians Not Liable for Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor and neither the Trustee nor the
Custodians assumes any responsibility for their correctness. The Trustee and the
Custodians make no representations as to the validity or sufficiency of this
Agreement or of the Certificates or of any Mortgage Loan or related document.
Neither the Trustee nor the Custodians shall be accountable for the use or
application by the Depositor, the Master Servicer, any Servicer or the
Securities Administrator of any funds paid to the Depositor, the Master
Servicer, any Servicer or the Securities Administrator in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account or the
Distribution Account by the Depositor, the Master Servicer, any Servicer, or the
Securities Administrator.
The Trustee shall have no responsibility (i) for filing or recording
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become and remains the
successor Master Servicer) (ii) to see to any insurance (unless the Trustee
shall have become the successor Master Servicer), or (iii) to confirm or verify
the contents of any reports or certificates of the Servicers, Securities
Administrator or Master Servicer delivered to the Trustee pursuant to this
Agreement believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties.
The Securities Administrator executes the Certificates not in its
individual capacity but solely as Securities Administrator of the Trust Fund
created by this Agreement, in the exercise of the powers and authority conferred
and vested in it by this Agreement. Each of the undertakings and agreements made
on the part of the Trustee on behalf of the Trust Fund in the Certificates is
made and intended not as a personal undertaking or agreement by the Trustee but
is made and intended for the purpose of binding only the Trust Fund.
Section 8.05 Trustee and Securities Administrator May Own
Certificates. Each of the Trustee and the Securities Administrator in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.06 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee shall be paid an on-going monthly
or annual fee, as applicable, by the Securities Administrator from the
Securities Administrator's own funds pursuant to a separate agreement. The
Trustee shall have no lien on the Trust Fund for the payment of such fees. The
Trustee shall be entitled to be reimbursed, from funds on deposit in the
Distribution Account, amounts sufficient to indemnify and hold harmless the
Trustee and any director, officer, employee, or agent of the Trustee against any
loss, liability, or expense (including reasonable attorneys' fees) incurred in
connection with any claim or legal action relating to:
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of any
Servicer's obligations in connection with a Servicing Agreement for which that
Servicer has performed its obligation to indemnify the Trustee pursuant to
Servicing Agreement, (ii) resulting from any breach of the Responsible Party's
obligations in connection with any Sale Agreement for which it has performed its
obligation to indemnify the Trustee pursuant to the Sale Agreement, (iii)
resulting from any breach of the Master Servicer's obligations hereunder for
which the Master Servicer has performed its obligation to indemnify the Trustee
pursuant to this Agreement, or (iv) incurred because of willful misfeasance, bad
faith, or negligence in the performance of any of the Trustee's duties under
this Agreement. This indemnity shall survive the termination of this Agreement
or the resignation or removal of the Trustee under this Agreement. Without
limiting the foregoing, except as otherwise agreed upon in writing by the
Depositor and the Trustee, and except for any expense, disbursement, or advance
arising from the Trustee's negligence, bad faith, or willful misfeasance, the
Trust Fund shall pay or reimburse the Trustee, for all reasonable expenses,
disbursements, and advances incurred or made by the Trustee in accordance with
this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance of
the Certificates, and
(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage
them to perform services under this Agreement.
Except as otherwise provided in this Agreement, the Trustee shall
not be entitled to payment or reimbursement for any routine ongoing expenses
incurred by the Trustee in the ordinary course of its duties as Trustee under
this Agreement or for any other expenses; provided, however, no expense shall be
reimbursed hereunder if it would not constitute an "unanticipated expense
incurred by the REMIC" within the meaning of the REMIC Provisions.
Section 8.07 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation, banking association or other
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause any of the Rating Agencies to reduce their
respective then current ratings of the Certificates (without reference to the
Class AF-3W Certificate Insurance Policy) (or having provided such security from
time to time as is sufficient to avoid such reduction) as evidenced in writing
by each Rating Agency. If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.07 the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with this Section 8.07, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.08.
The entity serving as Trustee may have normal banking and trust relationships
with the Depositor and its Affiliates or with the Servicer and its Affiliates;
provided, however, that such entity cannot be an Affiliate of the Depositor or
of any Servicer other than the Trustee in its role as successor to the Master
Servicer.
Section 8.08 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Master Servicer, the
Securities Administrator, the Class AF-3W Certificate Insurer and each Rating
Agency not less than 60 days before the date specified in such notice, when,
subject to Section 8.09, such resignation is to take effect, and acceptance by a
successor trustee in accordance with Section 8.09 meeting the qualifications set
forth in Section 8.07. If no successor trustee meeting such qualifications shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.07 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, one copy of which shall
be delivered to the Trustee and one copy to the successor trustee.
The Holders of Certificates entitled to a majority of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in duplicate, signed by such Holders or their
attorneys in fact duly authorized, one complete set of which shall be delivered
to the Trustee so removed and one complete set to the successor so appointed.
The successor trustee shall notify each Rating Agency of any removal of the
Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.08 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.09.
Section 8.09 Successor Trustee. Any successor trustee appointed as
provided in Section 8.08 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor and the predecessor trustee shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.09 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.09, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates and the Custodians. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.
Section 8.10 Merger or Consolidation of the Trustee or the
Custodians. Any corporation into which the Trustee or the Custodians, as
applicable, may be merged or converted or with which it may be consolidated or
any corporation resulting from any merger, conversion or consolidation to which
the Trustee or the Custodians, as applicable, shall be a party, or any
corporation succeeding to the business of the Trustee or the Custodians, as
applicable, shall be the successor of the Trustee or the Custodians, as
applicable, hereunder; provided, that such corporation shall be eligible under
Section 8.07 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 8.11 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Trustee shall have the power and shall execute and deliver all
instruments to appoint one or more Persons to act as co-trustee or co-trustees
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the Trust
Fund or any part thereof, whichever is applicable, and, subject to the other
provisions of this Section 8.11, such powers, duties, obligations, rights and
trusts as the Trustee may consider appropriate. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.09 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.09.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.11, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee (as successor Master
Servicer) under this Agreement to advance funds on behalf of the Master
Servicer, shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the applicable Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee
or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.12 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in, and in
accordance with, the REMIC Provisions. In furtherance of such intention, the
Securities Administrator covenants and agrees that it shall act as agent (and
the Securities Administrator is hereby appointed to act as agent) on behalf of
each REMIC described in the Preliminary Statement and that in such capacity it
shall:
(a) prepare and file, in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to each
Trust REMIC containing such information and at the times and in the manner as
may be required by the Code or state or local tax laws, regulations, or rules,
and furnish to Certificateholders the schedules, statements or information at
such times and in such manner as may be required thereby;
(b) within thirty days of the Closing Date, apply for an employer
identification number from the Internal Revenue Service via Form SS-4 or any
other acceptable method for all tax entities and shall also furnish to the
Internal Revenue Service, on Form 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
Holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of the Lower-Tier REMIC and the
Upper-Tier REMIC be treated as a REMIC on the federal tax return for its first
taxable year (and, if necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax imposed
on the Transfer of a Residual Certificate to a Person that is not a Permitted
Transferee (a "Non-Permitted Transferee"), or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are Outstanding so as
to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.12, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on either Trust REMIC before its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Securities Administrator or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Securities Administrator from withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings);
(i) cause federal, state or local income tax or information returns
to be signed by the Securities Administrator or, if required by applicable tax
law, the Trustee or such other Person as may be required to sign such returns by
the Code or state or local laws, regulations or rules;
(j) maintain records relating to each of the Trust REMICs, including
the income, expenses, assets, and liabilities thereof on a calendar year basis
and on the accrual method of accounting and the fair market value and adjusted
basis of the assets determined at such intervals as may be required by the Code,
as may be necessary to prepare the foregoing returns, schedules, statements or
information; and
(k) as and when necessary and appropriate, represent each Trust
REMIC in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of each Trust REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of either Trust REMIC, and otherwise act on
behalf of each Trust REMIC in relation to any tax matter or controversy
involving it.
The Holder of the largest Percentage Interest of the Class R-2 and
Class R-1 Certificates shall act as Tax Matters Person for the Lower-Tier REMIC
and the Upper-Tier REMIC, respectively, within the meaning of Treasury
Regulations Section 1.860F-4(d), and the Securities Administrator is hereby
designated as agent of such Certificateholder for such purpose (or if the
Securities Administrator is not so permitted, such Holder shall be the Tax
Matters Person in accordance with the REMIC Provisions). In such capacity, the
Securities Administrator shall, as and when necessary and appropriate, represent
each Trust REMIC in any administrative or judicial proceedings relating to an
examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of each Trust REMIC, enter into
settlement agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of either Trust REMIC, and otherwise act on
behalf of each Trust REMIC in relation to any tax matter or controversy
involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to receive Prepayment Premiums, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account
(subject to the obligation to pay Basis Risk Carry Forward Amounts) and the
rights of the Principal Certificateholders to receive Basis Risk Carry Forward
Amounts as the beneficial ownership interests in a grantor trust and not as an
obligations of any REMIC created hereunder, for federal income tax purposes. The
Securities Administrator shall file or cause to be filed with the Internal
Revenue Service Form 1041 or such other form as may be applicable and shall
furnish or cause to be furnished, to the Class X Certificateholders, the Class P
Certificateholders and the Principal Certificateholders, the respective amounts
described above that are received, in the time or times and in the manner
required by the Code.
To enable the Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten days after the Closing Date all information or data that the
Securities Administrator requests in writing and determines to be relevant for
tax purposes to the valuations and offering prices of the Certificates,
including the price, yield, prepayment assumption, and projected cash flows of
the Certificates and the Mortgage Loans. Moreover, the Depositor shall provide
information to the Securities Administrator concerning the value, if any, to
each Class of Principal Certificates of the right to receive Basis Risk Carry
Forward Amounts from the Excess Reserve Fund Account. Thereafter, the Depositor
shall provide to the Securities Administrator promptly upon written request
therefor any additional information or data that the Securities Administrator
may, from time to time, reasonably request to enable the Securities
Administrator to perform its duties under this Agreement; provided, however,
that the Depositor shall not be required to provide any information regarding
the Mortgage Loans after the Closing Date or any information that the Servicers
are required to provide to the Securities Administrator. The Depositor hereby
indemnifies the Securities Administrator for any losses, liabilities, damages,
claims, or expenses of the Securities Administrator arising from any errors or
miscalculations of the Securities Administrator that result from any failure of
the Depositor to provide, pursuant to this paragraph, accurate information or
data to the Securities Administrator on a timely basis.
The Securities Administrator shall not (i) cause the creation of any
interests in either Trust REMIC other than the regular and residual interests
set forth in the Preliminary Statement, (ii) receive any amount representing a
fee or other compensation for services (except as otherwise permitted by this
Agreement) or (iii) otherwise knowingly or intentionally take any action, cause
the Trust Fund to take any action or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of either Trust REMIC
as a REMIC or (ii) result in the imposition of a tax upon either Trust REMIC or
the Trust Fund (including but not limited to the tax on "prohibited
transactions" as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code, or the tax on
"net income from foreclosure property") unless the Trustee receives an Opinion
of Counsel (at the expense of the Trust Fund, but in no event at the expense of
the Trustee), to the effect that the contemplated action will not, with respect
to the Trust Fund, result in the imposition of a tax upon either Trust REMIC
created hereunder or endanger the status of any Trust REMIC.
If any tax is imposed on "prohibited transactions" of either Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Lower-Tier REMIC as defined in Section 860G(c) of
the Code, on any contribution to any Trust REMIC after the Startup Day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including any
minimum tax imposed on either Trust REMIC pursuant to Sections 23153 and 24874
of the California Revenue and Taxation Code, if not paid as otherwise provided
for herein, the tax shall be paid by (i) the Master Servicer, the Trustee or the
Securities Administrator, as applicable if such tax arises out of or results
from negligence of the Master Servicer, the Trustee or the Securities
Administrator, as applicable in the performance of any of its obligations under
this Agreement, (ii) a Servicer, in the case of any such minimum tax, and
otherwise if such tax arises out of or results from a breach by the Servicer of
any of its obligations under the applicable Servicing Agreement, (iii) a
Responsible Party if such tax arises out of or results from the Responsible
Party's obligation to repurchase a Mortgage Loan pursuant to the applicable Sale
Agreement or (iv) in all other cases, or if the Trustee, the Master Servicer,
the Securities Administrator, the Servicer or the Responsible Party fails to
honor its obligations under the preceding clause (i), (ii), or (iii), any such
tax will be paid with amounts otherwise to be distributed to the
Certificateholders, as provided in Section 4.01(a).
For as long as each Trust REMIC shall exist, the Securities
Administrator shall act as specifically required herein, and the Securities
Administrator shall comply with any directions of the Depositor or a Servicer
stating that such directions are being given to assure such continuing
treatment. In particular, the Securities Administrator shall not (a) sell or
authorize the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
purchase or repurchase of the Mortgage Loans pursuant to this Agreement or (b)
accept any contribution to either Trust REMIC after the Startup Day without
receipt of an Opinion of Counsel that such action described in clause (a) or (b)
will not result in the imposition of a tax on either Trust REMIC or cause either
Trust REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Section 8.13 Periodic Filings. (a) The Securities Administrator
shall reasonably cooperate with the Depositor in connection with the Trust's
satisfying the reporting requirements under the Exchange Act. The Securities
Administrator shall prepare on behalf of the Trust any Forms 8-K and 10-K
customary for similar securities as required by the Exchange Act and the Rules
and Regulations of the Securities and Exchange Commission thereunder, and the
Securities Administrator shall file (via the Securities and Exchange
Commission's Electronic Data Gathering and Retrieval System) such Forms on
behalf of the Depositor. In the event the Securities Administrator is signing on
behalf of the Depositor pursuant to the preceding sentence, the Depositor hereby
grants to the Securities Administrator a limited power of attorney to execute
and file Forms 8-K and 15 on behalf of the Depositor. Such power of attorney
shall continue until the earlier of either (i) receipt by the Securities
Administrator from the Depositor of written termination of such power of
attorney and (ii) the termination of the Trust. Notwithstanding the foregoing,
the Securities Administrator shall prepare such Form 10-K to be signed by the
Depositor, and the Depositor shall sign such form.
(b) Each Form 8-K shall be filed by the Securities Administrator
within 15 days after each Distribution Date, including a copy of the statement
to the Certificateholders for such Distribution Date as an exhibit thereto.
Prior to March 30th of each year (or such earlier date as may be required by the
Exchange Act and the Rules and Regulations of the Securities and Exchange
Commission), the Securities Administrator shall file a Form 10-K in substance as
required by applicable law or applicable Securities and Exchange Commission
staff's interpretations, with respect to the Trust Fund. Such Form 10-K shall
include the Servicer's annual statement of compliance described in the
applicable Servicing Agreement (upon which the Securities Administrator may rely
in delivering its certification hereunder) and the accountant's report described
in the applicable Servicing Agreement, in each case to the extent they have been
timely delivered to the Securities Administrator. If they are not so timely
delivered, the Securities Administrator shall file an amended Form 10-K
including such documents as exhibits reasonably promptly after they are
delivered to the Securities Administrator. The Securities Administrator shall
have no liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Securities Administrator's
inability or failure to obtain any information not resulting from its own
negligence, willful misconduct or bad faith. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit K, with such changes as may
be necessary or appropriate as a result of changes promulgated by the Securities
and Exchange Commission (the "Certification"), which shall be signed by the
senior officer of the Depositor in charge of securitization.
(c) The Securities Administrator shall sign a certification (in the
form attached hereto as Exhibit L with such changes as may be necessary or
appropriate as a result of changes promulgated by the Securities and Exchange
Commission) for the benefit of the Depositor and its officers, directors and
Affiliates in respect of items 1 through 3 of the Certification; provided,
however, that the Securities Administrator shall not undertake an analysis of
the accountant's report attached as an exhibit to the Form 10 K. Such
certification shall be delivered to the Depositor by March 20th of each year (or
if not a Business Day, the immediately preceding Business Day). The
Certification shall be delivered to the Securities Administrator for filing by
March 25th of each year (or if not a Business Day, the immediately preceding
Business Day). In addition, the Securities Administrator shall indemnify and
hold harmless the Depositor, the Trustee and their respective officers,
directors and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
Securities Administrator's obligations under this Section 8.13(c) or the
Securities Administrator's negligence, bad faith or willful misconduct in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the Depositor and the Trustee, then the
Securities Administrator agrees in connection with a breach of the Securities
Administrator's obligations under this Section 8.13(c) or the Securities
Administrator's negligence, bad faith or willful misconduct in connection
therewith that it shall contribute to the amount paid or payable by the
Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Securities Administrator on the other.
(d) Upon any filing with the Securities and Exchange Commission, the
Securities Administrator shall promptly deliver to the Depositor a copy of any
such executed report, statement or information.
(e) Prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall file a Form 15 Suspension Notification with respect to the
Trust.
Section 8.14 Tax Classification of the Excess Reserve Fund Account.
For federal income tax purposes, the Securities Administrator shall treat the
Excess Reserve Fund Account as beneficially owned by the holder of the Class X
Certificates and shall treat such portion of the Trust Fund as a grantor trust
under subpart E, Part I of subchapter J of the Code. The Securities
Administrator shall treat the rights that each Class of Principal Certificates
has to receive payments of Basis Risk Carry Forward Amounts from the Excess
Reserve Fund Account as rights to receive payments under an interest rate cap
contract written by the Class X Certificateholders in favor of each Class.
Accordingly, each Class of Principal Certificates will comprise two
components--a regular interest in the Upper-Tier REMIC and an interest in an
interest rate cap contract, and the Class X Certificates will be comprised of
two components--a regular interest in the Upper-Tier REMIC and the Excess
Reserve Fund Account. The Securities Administrator shall allocate the issue
price for a Class of Certificates among these components for purposes of
determining the issue price of the Upper-Tier Regular Interest component based
on information received from the Depositor. Unless otherwise advised by the
Depositor in writing, for federal income tax purposes, the Securities
Administrator is hereby directed to assign a value of zero to the right of each
Holder of a Principal Certificate to receive the related Basis Risk Carry
Forward Amount for purposes of allocating the purchase price of an initial
Principal Certificateholder between such right and the related Upper-Tier
Regular Interest.
Section 8.15 Resignation of Custodian; Limitation on Liability. (a)
Each of the Custodians may resign at any time or may be terminated by the
Trustee with cause, in each case, upon 60 days written notice to the applicable
Servicer, the Depositor, the Class AF-3W Certificate Insurer and the Securities
Administrator, in which event the Depositor will be obligated to appoint a
successor; provided, however, that the appointment of such successor shall not
adversely affect the then current rating of the Certificates (without regard to
the Class AF-3W Certificate Insurance Policy), as confirmed in writing by each
Rating Agency. If no successor has been appointed and has accepted appointment
within 60 days after the resignation or termination of such Custodian, such
Custodian may petition any court of competent jurisdiction for appointment of a
successor.
(b) The Securities Administrator, pursuant to a separate agreement,
shall compensate from its own funds the Custodians ongoing reasonable fees for
their respective activities under this Agreement after the Closing Date. The
Custodians shall have no lien on the Trust Fund for the payment of such fees.
The Custodians shall be entitled to be reimbursed, from funds on deposit in the
Distribution Account, amounts sufficient to indemnify and hold harmless each of
the Custodians and any director, officer, employee, or agent of a Custodian
against any loss, liability, or expense (including reasonable attorneys' fees)
incurred in connection with any claim or legal action relating to:
(a) this Agreement;
(b) the Certificates; or
(c) the performance of any of such Custodian's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of a
Servicer's obligations in connection with a Servicing Agreement for which the
Servicer has performed its obligation to indemnify such Custodian pursuant to
such Servicing Agreement, (ii) resulting from any breach of the Responsible
Party's obligations in connection with a Servicing Agreement for which the
Responsible Party has performed its obligation to indemnify such Custodian
pursuant to such Servicing Agreement, or (iii) incurred because of willful
misfeasance, bad faith, or negligence in the performance of any of such
Custodian's duties under this Agreement.
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Servicer's Obligations. (a) The Master Servicer, on behalf of the Trustee, the
Securities Administrator, the Depositor and the Certificateholders, shall
monitor the performance of the Servicers under the related Servicing Agreements,
and (except as set forth below) shall use its reasonable good faith efforts to
cause the Servicers to duly and punctually perform their duties and obligations
thereunder as applicable. Upon the occurrence of an Event of Default of which a
Responsible Officer of the Master Servicer has actual knowledge, the Master
Servicer shall promptly notify the Securities Administrator, the Class AF-3W
Certificate Insurer and the Trustee and shall specify in such notice the action,
if any, the Master Servicer plans to take in respect of such default. So long as
an Event of Default shall occur and be continuing, the Master Servicer shall
take the actions specified in Article VII.
If (i) a Servicer reports a delinquency on a monthly report and (ii)
such Servicer, by 11 a.m. (New York Time) on the Business Day preceding the
related Remittance Date, neither makes a Monthly Advance nor provides the
Securities Administrator and the Master Servicer with a report certifying that
such a Monthly Advance would be a Nonrecoverable Monthly Advance, then the
Master Servicer shall deposit in the Distribution Account not later than the
Business Day immediately preceding the related Distribution Date a Monthly
Advance in an amount equal to the difference between (x) with respect to each
Monthly Payment due on a Mortgage Loan that is delinquent (other than Relief Act
Interest Shortfalls) and for which the related Servicer was required to make a
Monthly Advance pursuant to the related Servicing Agreement and (y) amounts
deposited in the Collection Account to be used for Monthly Advances with respect
to such Mortgage Loan, except to the extent the Master Servicer determines any
such Monthly Advance to be a Nonrecoverable Monthly Advance or Nonrecoverable
Servicing Advance. Subject to the foregoing, the Master Servicer shall continue
to make such Monthly Advances for so long as the related Servicer is required to
do so under the related Servicing Agreement. If applicable, on the Business Day
immediately preceding the Distribution Date, the Master Servicer shall deliver
an Officer's Certificate to the Trustee stating that the Master Servicer elects
not to make a Monthly Advance in a stated amount and detailing the reason(s) it
deems the Monthly Advance to be a Nonrecoverable Monthly Advance. Any amounts
deposited by the Master Servicer pursuant to this Section 9.01 shall be net of
the Servicing Fee for the related Mortgage Loans.
(b) The Master Servicer shall pay the costs of monitoring the
Servicers as required hereunder (including costs associated with (i) termination
of any Servicer, (ii) the appointment of a successor servicer or (iii) the
transfer to and assumption of, the servicing by the Master Servicer) and shall,
to the extent permitted by the related Servicing Agreement, seek reimbursement
therefor initially from the terminated Servicer. In the event the full costs
associated with the transition of servicing responsibilities to the Master
Servicer are not paid for by the predecessor or successor Servicer (provided
such successor Servicer is not the Master Servicer), the Master Servicer shall
be reimbursed therefor by the Trust for out-of-pocket costs incurred by the
Master Servicer associated with any such transfer of servicing duties from a
Servicer to the Master Servicer or any other successor servicer.
(c) If the Master Servicer assumes the servicing with respect to any
of the Mortgage Loans, it will not assume liability for the representations and
warranties of any Servicer it replaces or for any errors or omissions of such
Servicer.
If the Depositor or an affiliate of the Depositor is the owner of
the servicing rights for a servicer and the Depositor chooses to terminate such
servicer with or without cause and sell those servicing rights to a successor
servicer, then the Depositor must provide 30 days' notice to the Master Servicer
and the Class AF-3W Certificate Insurer, such successor servicer must be
reasonably acceptable to the Master Servicer, the terminated servicer must be
reimbursed for any unreimbursed Monthly Advances, servicing fees and any related
expenses, the successor servicer must be qualified to service mortgage loans for
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and the Depositor must obtain prior written consent
from the Rating Agencies that the transfer of the servicing of the mortgage
loans will not result in a downgrade, qualification or withdrawal of the then
current ratings of the Certificates (without regard to the Class AF-3W
Certificate Insurance Policy). The costs of such transfer (including any costs
of the Master Servicer) are to be borne by the Depositor.
(d) Neither the Depositor nor the Securities Administrator shall
consent to the assignment by any Servicer of such Servicer's rights and
obligations under the Agreement without the prior written consent of the Master
Servicer, which consent shall not be unreasonably withheld.
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. 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, directors, 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 9.03 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Depositor, the
Securities Administrator and the Trustee, for the benefit of the
Certificateholders and the Class AF-3W Certificate Insurer, as of the Closing
Date that:
(i) it is a national banking association validly existing and in
good standing under the laws of the United States of America, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and comply
with its obligations under the terms of this Agreement, the execution,
delivery and performance of which have been duly authorized by all
necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is bound
or to which any of its assets are subject, which violation, default or
breach would materially and adversely affect the Master Servicer's ability
to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights in general, and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default would
materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) [Reserved];
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master Servicer
with this Agreement or the consummation of the transactions contemplated
by this Agreement, except for such consents, approvals, authorizations and
orders (if any) as have been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
(b) Section 11.01(a) of this Agreement and Section 7 of the Step 2
Assignment Agreements provide that the Master Servicer may purchase, on or after
the Optional Termination Date, all Mortgage Loans (and REO Properties) at the
Termination Price. The Master Servicer, in consideration of the benefits to it
of the transactions occurring under this Agreement, the Assignment Agreements
and the Servicing Agreements, hereby represents, covenants and agrees with the
Depositor and any applicable NIM Issuer that it will not exercise its right to
purchase, on or after the Optional Termination Date, all Mortgage Loans (and REO
Properties) unless it has received (x) written notification from the NIM Trustee
that all of the outstanding notes issued under the applicable indenture have
been paid in full or (y) an Officer's Certificate of the NIM Issuer pursuant to
the applicable section of the relevant indenture to the effect that all
conditions precedent to the satisfaction and discharge of the indenture have
been complied with.
(c) It is understood and agreed that the representations and
warranties set forth in this Section shall survive the execution and delivery of
this Agreement. The Master Servicer shall indemnify the Depositor, Securities
Administrator, and the Trustee and hold them harmless against any loss, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and other reasonable costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from, a
material breach of the Master Servicer's representations and warranties
contained in Section 9.03(a) above. It is understood and agreed that the
enforcement of the obligation of the Master Servicer set forth in this Section
9.03 to indemnify the Depositor, Securities Administrator, and the Trustee
constitutes the sole remedy of the Depositor and the Trustee, respecting a
breach of the foregoing representations and warranties. Such indemnification
shall survive any termination of the Master Servicer as Master Servicer
hereunder and any termination of this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Depositor, the
Master Servicer, Securities Administrator or the Trustee or notice thereof by
any one of such parties to the other parties.
Section 9.04 Master Servicer Events of Default. Each of the
following shall constitute a "Master Servicer Event of Default":
(a) any failure by the Master Servicer to deposit in the
Distribution Account any payment received by it from any Servicer or required to
be made by the Master Servicer under the terms of this Agreement which continues
unremedied for a period of two (2) 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 by any other party hereto;
(b) failure by the Master Servicer to duly observe or perform, in
any material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement which failure continues
unremedied for a period of thirty (30) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee or to the Master Servicer and Trustee by
the holders of Certificates evidencing at least 25% of the Voting Rights;
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master Servicer
and such decree or order shall have remained in force, undischarged or unstayed
for a period of sixty (60) days;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or relating to all or
substantially all of its property;
(e) the Master Servicer shall admit in writing its inability to pay
its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations for
three (3) Business Days;
(f) Except as otherwise set forth herein, the Master Servicer
attempts to assign this Agreement or its responsibilities hereunder or to
delegate its duties hereunder (or any portion thereof) without the consent of
the Trustee, Securities Administrator and the Depositor; or
(g) the indictment of the Master Servicer for the taking of any
action by the Master Servicer, any employee thereof, any Affiliate or any
director or employee thereof that constitutes fraud or criminal activity in the
performance of its obligations under this Agreement, in each case, where such
indictment materially and adversely affects the ability of the Master Servicer
to perform its obligations under this Agreement (subject to the condition that
such indictment is not dismissed within ninety (90) days).
In each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, in addition to whatever rights the Trustee
may have at law or equity to damages, including injunctive relief and specific
performance, the Trustee, by notice in writing to the Master Servicer, may, and
upon the request of the Holders of Certificates representing at least 51% of the
Voting Rights shall, terminate with cause all the rights and obligations of the
Master Servicer under this Agreement.
Upon receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, shall pass to
and be vested in any successor master servicer appointed hereunder which accepts
such appointments. Upon written request from the Trustee or the Depositor, the
Master Servicer shall prepare, execute and deliver to the successor entity
designated by the Trustee any and all documents and other instruments related to
the performance of its duties hereunder as the Master Servicer and, place in
such successor's possession all such documents with respect to the master
servicing of the Mortgage Loans and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, at the Master Servicer's sole expense. The Master Servicer shall
cooperate with the Trustee and such successor master servicer in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including without limitation, the transfer to such successor master servicer for
administration by it of all cash amounts which shall at the time be credited to
the Distribution Account or are thereafter received with respect to the Mortgage
Loans.
Section 9.05 Waiver of Default. By a written notice, the Trustee may
with the consent of a Holders of Certificates evidencing at least 51% of the
Voting Rights waive any default by the Master Servicer in the performance of its
obligations hereunder and its consequences. Upon any waiver of a past default,
such default shall cease to exist, and any Master Servicer Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
Section 9.06 Successor to the Master Servicer. Upon termination of
the Master Servicer's responsibilities and duties under this Agreement, the
Trustee shall appoint or may petition any court of competent jurisdiction for
the appointment of a successor, which shall succeed to all rights and assume all
of the responsibilities, duties and liabilities of the Master Servicer under
this Agreement prior to the termination of the Master Servicer. Any successor
shall be a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved servicer in good standing and
acceptable to the Depositor and the Rating Agencies. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that in no event shall the master
servicer fee paid to such successor master servicer exceed that paid to the
Master Servicer hereunder. In the event that the Master Servicer's duties,
responsibilities and liabilities under this Agreement are terminated, the Master
Servicer shall continue to discharge its duties and responsibilities hereunder
until the effective date of such termination with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement and shall
take no action whatsoever that might impair or prejudice the rights of its
successor. The termination of the Master Servicer shall not become effective
until a successor shall be appointed pursuant hereto and shall in no event (i)
relieve the Master Servicer of responsibility for the representations and
warranties made pursuant to Section 9.03(a) hereof and the remedies available to
the Trustee under Section 9.03(b) hereof, it being understood and agreed that
the provisions of Section 9.03 hereof shall be applicable to the Master Servicer
notwithstanding any such sale, assignment, resignation or termination of the
Master Servicer or the termination of this Agreement; or (ii) affect the right
of the Master Servicer to receive payment and/or reimbursement of any amounts
accruing to it hereunder prior to the date of termination (or during any
transition period in which the Master Servicer continues to perform its duties
hereunder prior to the date the successor master servicer fully assumes its
duties).
If no successor Master Servicer has accepted its appointment within
90 days of the time the Trustee receives the resignation of the Master Servicer,
the Trustee shall be the successor Master Servicer in all respects under this
Agreement and shall have all the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto, including the
obligation to make Monthly Advances; provided, however, that any failure to
perform any duties or responsibilities caused by the Master Servicer's failure
to provide information required by this Agreement shall not be considered a
default by the Trustee hereunder. In the Trustee's capacity as such successor,
the Trustee shall have the same limitations on liability herein granted to the
Master Servicer. As compensation therefor, the Trustee shall be entitled to
receive the compensation, reimbursement and indemnities otherwise payable to the
Master Servicer, including the fees and other amounts payable pursuant to
Section 9.07 hereof.
Any successor master servicer appointed as provided herein, shall
execute, acknowledge and deliver to the Master Servicer, the Class AF-3W
Certificate Insurer and to the Trustee an instrument accepting such appointment,
wherein the successor shall make the representations and warranties set forth in
Section 9.03 hereof, and whereupon such successor shall become fully vested with
all of the rights, powers, duties, responsibilities, obligations and liabilities
of the Master Servicer, with like effect as if originally named as a party to
this Agreement. Any termination or resignation of the Master Servicer or
termination of this Agreement shall not affect any claims that the Trustee may
have against the Master Servicer arising out of the Master Servicer's actions or
failure to act prior to any such termination or resignation or in connection
with the Trustee's assumption of such obligations, duties and responsibilities.
Upon a successor's acceptance of appointment as such, the Master
Servicer shall notify by mail the Trustee of such appointment.
Section 9.07 Compensation of the Master Servicer. As compensation
for its activities under this Agreement, the Master Servicer shall be entitled
to the investment income earned on amounts in the Distribution Account during
the Master Servicer Float Period.
Section 9.08 Merger or Consolidation. Any Person into which the
Master Servicer may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor to the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or resulting Person to the Master Servicer
shall (i) be a Person (or have an Affiliate) that is qualified and approved to
service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and FHLMC (provided further that a
successor Master Servicer that satisfies subclause (i) through an Affiliate
agrees to service the Mortgage Loans in accordance with all applicable ▇▇▇▇▇▇
Mae and FHLMC guidelines) and (ii) have a net worth of not less than
$25,000,000.
Section 9.09 Resignation of the Master Servicer. Except as otherwise
provided in Sections 9.08 and 9.10 hereof, the Master Servicer shall not resign
from the obligations and duties hereby imposed on it unless the Master
Servicer's duties hereunder are no longer permissible under applicable law or
are in material conflict by reason of applicable law with any other activities
carried on by it and cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
that shall be independent to such effect delivered to the Trustee and the Class
AF-3W Certificate Insurer. No such resignation shall become effective until the
Trustee shall have assumed, or a successor master servicer satisfactory to the
Trustee and the Depositor shall have assumed, the Master Servicer's
responsibilities and obligations under this Agreement. Notice of such
resignation shall be given promptly by the Master Servicer and the Depositor to
the Trustee.
If at any time, ▇▇▇▇▇ Fargo Bank, N.A., as Master Servicer, resigns
under this Section 9.09, or is removed as Master Servicer pursuant to Section
9.04, then at such time ▇▇▇▇▇ Fargo Bank, N.A. shall also resign (and shall be
entitled to resign) as Securities Administrator under this Agreement.
Section 9.10 Assignment or Delegation of Duties by the Master
Servicer. Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer; provided, however, that the Master Servicer
shall have the right with the prior written consent of the Depositor (which
shall not be unreasonably withheld or delayed), and upon delivery to the
Trustee, the Class AF-3W Certificate Insurer and the Depositor of a letter from
each Rating Agency to the effect that such action shall not result in a
downgrade of the ratings assigned to any of the Certificates (without regard to
the Class AF-3W Certificate Insurance Policy), to delegate or assign to or
subcontract with or authorize or appoint any qualified Person to perform and
carry out any duties, covenants or obligations to be performed and carried out
by the Master Servicer hereunder. Notice of such permitted assignment shall be
given promptly by the Master Servicer to the Depositor, the Class AF-3W
Certificate Insurer and the Trustee. If, pursuant to any provision hereof, the
duties of the Master Servicer are transferred to a successor master servicer,
the entire compensation payable to the Master Servicer pursuant hereto shall
thereafter be payable to such successor master servicer but in no event shall
the fee payable to the successor master servicer exceed that payable to the
predecessor master servicer.
Section 9.11 Limitation on Liability of the Master Servicer. Neither
the Master Servicer nor any of the directors, officers, employees or agents of
the Master Servicer shall be under any liability to the Trustee, Securities
Administrator, the Servicers or the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such person against any liability
that would otherwise be imposed by reason of willful malfeasance, bad faith or
negligence in the performance of its duties or by reason of reckless disregard
for its obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
faith on any document prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Master Servicer shall be under no
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties as Master Servicer with respect to the Mortgage Loans
under this Agreement and that in its opinion may involve it in any expenses or
liability; provided, however, that the Master Servicer may in its sole
discretion undertake any such action that it may deem necessary or desirable in
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom, shall
be liabilities of the Trust, and the Master Servicer shall be entitled to be
reimbursed therefor out of the Master Servicer Account in accordance with the
provisions of Section 9.07 and Section 9.12.
The Master Servicer shall not be liable for any acts or omissions of
any Servicer except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful malfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the obligations of the Servicers as required under the Agreement.
Section 9.12 Indemnification; Third Party Claims. The Master
Servicer agrees to indemnify the Depositor, Securities Administrator and the
Trustee, and hold them harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, liability, fees and expenses that the Depositor, the Securities
Administrator or the Trustee may sustain as a result of the Master Servicer's
willful malfeasance, bad faith or negligence in the performance of its duties
hereunder or by reason of its reckless disregard for its obligations and duties
under this Agreement. The Depositor, Securities Administrator, the Servicer, and
the Trustee shall immediately notify the Master Servicer if a claim is made by a
third party with respect to this Agreement or the Mortgage Loans which would
entitle the Depositor, the Servicer or the Trustee to indemnification under this
Section 9.12, whereupon the Master Servicer shall assume the defense of any such
claim and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or them in respect of such claim.
The Master Servicer agrees to indemnify and hold harmless the
Trustee from and against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
liability, fees and expenses (including reasonable attorneys' fees) that the
Trustee may sustain as a result of such liability or obligations of the Master
Servicer and in connection with the Trustee's assumption (not including the
Trustee's performance, except to the extent that costs or liability of the
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer prior to its replacement as Master Servicer) of
the Master Servicer's obligations, duties or responsibilities under such
agreement.
The Trust will indemnify the Master Servicer and hold it harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, liabilities, fees and
expenses that the Master Servicer may incur or sustain in connection with,
arising out of or related to this Agreement, the Servicing Agreements, the Sale
Agreements, the Step 2 Assignment Agreements or the Certificates, except to the
extent that any such loss, liability or expense is related to (i) a material
breach of the Master Servicer's representations and warranties in this Agreement
or (ii) the Master Servicer's willful malfeasance, bad faith or negligence or by
reason of its reckless disregard of its duties and obligations under any such
agreement; provided that any such loss, liability or expense constitutes an
"unanticipated expense incurred by the REMIC" within the meaning of Treasury
Regulations Section 1.860G-1(b)(3)(ii). The Master Servicer shall be entitled to
reimbursement for any such indemnified amount from funds on deposit in the
Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator. The Securities
Administrator shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
Certificateholders of such non conforming instrument in the event the Securities
Administrator, after so requesting, does not receive a satisfactorily corrected
instrument.
No provision of this Agreement shall be construed to relieve the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) the duties and obligations of the Securities Administrator shall
be determined solely by the express provisions of this Agreement, the
Securities Administrator shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Securities Administrator and the Securities
Administrator may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Securities Administrator and conforming to
the requirements of this Agreement which it believed in good faith to be
genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(ii) the Securities Administrator shall not be liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities Administrator, unless it shall be conclusively
determined by a court of competent jurisdiction, such determination no
longer subject to appeal, that the Securities Administrator was negligent
in ascertaining the pertinent facts;
(iii) the Securities Administrator shall not be liable with respect
to any action or inaction taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of Certificates
evidencing not less than 25% of the Voting Rights of Certificates relating
to the time, method and place of conducting any proceeding for any remedy
available to the Securities Administrator, or exercising or omitting to
exercise any trust or power conferred upon the Securities Administrator
under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer or the Trustee.
Section 10.02 Certain Matters Affecting the Securities
Administrator. Except as otherwise provided in Section 10.01:
(i) the Securities Administrator may request and conclusively rely
upon and shall be fully protected in acting or refraining from acting upon
any resolution, Officer's Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature of
any such party or parties;
(ii) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any advice or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Securities Administrator shall not be liable for any
action or inaction taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to the Securities Administrator of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Securities Administrator, not reasonably assured to the
Securities Administrator by the security afforded to it by the terms of
this Agreement, the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to so
proceeding. Nothing in this clause (iv) shall derogate from the obligation
of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors, provided that the
Master Servicer shall have no liability for disclosure required by this
Agreement;
(v) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(vi) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement;
(vii) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities Administrator
reasonable security or indemnity satisfactory to the Securities
Administrator against the costs, expenses and liabilities which may be
incurred therein or thereby; and
(viii) the Securities Administrator shall have no obligation to
appear in, prosecute or defend any legal action that is not incidental to
its duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that the Securities Administrator
may in its discretion undertake any such action that it may deem necessary
or desirable in respect of this Agreement and the rights and duties of the
parties hereto and the interests of the Trustee, the Securities
Administrator and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and
the Securities Administrator shall be entitled to be reimbursed therefor
out of the Collection Account.
The Securities Administrator shall have no duty (A) to see to any
recording, filing, or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing thereof, (B) to
see to the provision of any insurance or (C) to see to the payment or discharge
of any tax, assessment, or other governmental charge or any lien or encumbrance
of any kind owing with respect to, assessed or levied against, any part of the
Trust Fund other than from funds available in the Distribution Account.
Section 10.03 Securities Administrator Not Liable for Certificates
or Mortgage Loans. The recitals contained herein and in the Certificates shall
be taken as the statements of the Depositor or the Transferor, as the case may
be, and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document other than with respect to the Securities
Administrator's execution and authentication of the Certificates. The Securities
Administrator shall not be accountable for the use or application by the
Depositor or the Master Servicer of any funds paid to the Depositor or the
Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account by the Depositor or the Master Servicer.
Section 10.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the parties
hereto and their Affiliates with the same rights as it would have if it were not
the Securities Administrator.
Section 10.05 Securities Administrator's Fees and Expenses. As
compensation for its activities under this Agreement, the Securities
Administrator shall be paid by the Master Servicer from the Master Servicer's
own funds from compensation received in its capacity as Master Servicer. The
Securities Administrator shall be entitled to the investment income earned on
amounts in the Distribution Account during the Securities Administrator Float
Period. The Securities Administrator and any director, officer, employee, agent
or "control person" within the meaning of the Securities Act of 1933, as
amended, and the Securities Exchange of 1934, as amended ("Control Person"), of
the Securities Administrator shall be indemnified by the Trust and held harmless
against any loss, liability or expense (including reasonable attorney's fees)
(i) incurred in connection with any claim or legal action relating to (a) this
Agreement, (b) the Mortgage Loans or (c) the Certificates, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Securities Administrator's duties
hereunder, (ii) incurred in connection with the performance of any of the
Securities Administrator's duties hereunder, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of any of the Securities Administrator's duties hereunder or
(iii) incurred by reason of any action of the Securities Administrator taken at
the direction of the Certificateholders, provided that any such loss, liability
or expense constitutes an "unanticipated expense incurred by the REMIC" within
the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii). Such indemnity
shall survive the termination of this Agreement or the resignation or removal of
the Securities Administrator hereunder. Without limiting the foregoing, and
except for any such expense, disbursement or advance as may arise from the
Securities Administrator's negligence, bad faith or willful misconduct, or which
would not be an "unanticipated expense" within the meaning of the second
preceding sentence, the Securities Administrator shall be reimbursed by the
Trust for all reasonable expenses, disbursements and advances incurred or made
by the Securities Administrator in accordance with any of the provisions of this
Agreement with respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance of
the Certificates, (B) the reasonable compensation, expenses and disbursements of
any accountant, engineer, appraiser or other agent that is not regularly
employed by the Securities Administrator, to the extent that the Securities
Administrator must engage such Persons to perform acts or services hereunder and
(C) printing and engraving expenses in connection with preparing any Definitive
Certificates. The Trust shall fulfill its obligations under this paragraph from
amounts on deposit from time to time in the Distribution Account.
The Securities Administrator may retain or withdraw from the
Distribution Account, (i) the master servicing fee which has been determined
pursuant to a separate agreement, (ii) amounts necessary to reimburse it or the
Master Servicer for any previously unreimbursed Advances and any Advances the
Master Servicer deems to be non-recoverable from the related Mortgage Loan
proceeds, (iii) an aggregate annual amount to indemnify the Master Servicer and
itself for amounts due in accordance with this Agreement, and (iv) any other
amounts which it or the Master Servicer is entitled to receive hereunder for
reimbursement, indemnification or otherwise, including the amount to which the
Securities Administrator is entitled pursuant to Section 3.02 hereof. The
Securities Administrator 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 10.06 Eligibility Requirements for Securities Administrator.
The Securities Administrator hereunder shall at all times be a corporation or
association organized and doing business under the laws the United States of
America or any state thereof, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating of at least investment grade. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 10.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 10.06, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 10.07 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the Depositor
and its affiliates or the Trustee and its affiliates.
Any successor Securities Administrator (i) may not be an originator,
the Master Servicer, the Servicer, the Depositor or an affiliate of the
Depositor unless the Securities Administrator functions are operated through an
institutional trust department of the Securities Administrator, (ii) must be
authorized to exercise corporate trust powers under the laws of its jurisdiction
of organization, and (iii) must be rated at least "A/F1" by Fitch, if Fitch is a
Rating Agency, or the equivalent rating by S&P or ▇▇▇▇▇'▇. If no successor
Securities Administrator shall have been appointed and shall have accepted
appointment within 60 days after the Securities Administrator ceases to be the
Securities Administrator pursuant to Section 10.07, then the Trustee may (but
shall not be obligated to) become the successor Securities Administrator. The
Depositor shall appoint a successor to the Securities Administrator in
accordance with Section 10.07. The Trustee shall notify the Rating Agencies of
any change of Securities Administrator.
Section 10.07 Resignation and Removal of Securities Administrator.
The Securities Administrator may at any time resign by giving written notice of
resignation to the Depositor, the Class AF-3W Certificate Insurer and the
Trustee and each Rating Agency not less than 60 days before the date specified
in such notice when, subject to Section 10.08, such resignation is to take
effect, and acceptance by a successor Securities Administrator in accordance
with Section 10.08 meeting the qualifications set forth in Section 10.06. If no
successor Securities Administrator meeting such qualifications shall have been
so appointed by the Depositor and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Securities Administrator
may petition any court of competent jurisdiction for the appointment of a
successor Securities Administrator.
If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 10.06 hereof and shall
fail to resign after written request thereto by the Depositor, or if at any time
the Securities Administrator shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Securities Administrator
or of its property shall be appointed, or any public officer shall take charge
or control of the Securities Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed with
respect to the Trust Fund by any state in which the Securities Administrator or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different Securities Administrator, then the Depositor may
remove the Securities Administrator and appoint a successor Securities
Administrator by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Securities Administrator so removed, one copy of which
shall be delivered to the Master Servicer and one copy to the successor
Securities Administrator.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor Securities Administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in fact duly authorized,
one complete set of which instruments shall be delivered by the successor
Securities Administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor Securities Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 10.08
hereof.
Section 10.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Depositor,
its predecessor Securities Administrator, the Class AF-3W Certificate Insurer
and the Trustee an instrument accepting such appointment hereunder and thereupon
the resignation or removal of the predecessor Securities Administrator shall
become effective and such successor Securities Administrator, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with the like
effect as if originally named as Securities Administrator herein. The Depositor,
the Trustee, the Master Servicer and the predecessor Securities Administrator
shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor Securities Administrator all such rights, powers, duties, and
obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect the then
current rating of the Certificates (without regard to the Class AF-3W
Certificate Insurance Policy), as confirmed in writing by each Rating Agency.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 10.08, the Depositor shall mail notice
of the succession of such Securities Administrator hereunder to all Holders of
Certificates and the Class AF-3W Certificate Insurer. If the Depositor fails to
mail such notice within 10 days after acceptance by the successor Securities
Administrator of appointment, the successor Securities Administrator shall cause
such notice to be mailed at the expense of the Depositor.
Section 10.09 Merger or Consolidation of Securities Administrator.
Any corporation or other entity into which the Securities Administrator may be
merged or converted or with which it may be consolidated or any corporation or
other entity resulting from any merger, conversion or consolidation to which the
Securities Administrator shall be a party, or any corporation or other entity
succeeding to the business of the Securities Administrator, shall be the
successor of the Securities Administrator hereunder, provided that such
corporation or other entity shall be eligible under the provisions of Section
10.06 hereof, 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 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities Administrator
shall not assign or transfer any of its rights, benefits or privileges hereunder
to any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Securities Administrator; provided, however, that the
Securities Administrator shall have the right with the prior written consent of
the Depositor (which shall not be unreasonably withheld or delayed), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency to
the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates (without regard to the Class AF-3W
Certificate Insurance Policy), to delegate or assign to or subcontract with or
authorize or appoint any qualified Person to perform and carry out any duties,
covenants or obligations to be performed and carried out by the Securities
Administrator hereunder. Notice of such permitted assignment shall be given
promptly by the Securities Administrator to the Depositor and the Trustee. If,
pursuant to any provision hereof, the duties of the Securities Administrator are
transferred to a successor securities administrator, the entire compensation
payable to the Securities Administrator pursuant hereto shall thereafter be
payable to such successor securities administrator but in no event shall the fee
payable to the successor securities administrator exceed that payable to the
predecessor securities administrator.
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 11.03, the obligations and responsibilities
of the Depositor, the Master Servicer, the Servicers, the Securities
Administrator and the Trustee created hereby with respect to the Trust Fund
shall terminate upon the earlier of (a) the purchase on or after the Optional
Termination Date, by the Master Servicer or the Class AF-3W Certificate Insurer
of all Mortgage Loans (and REO Properties), at the price (the "Termination
Price") equal to the greater of (1) sum of (i) 100% of the unpaid principal
balance of each Mortgage Loan (other than in respect of REO Property) plus
accrued and unpaid interest thereon at the applicable Mortgage Interest Rate,
and (ii) the lesser of (x) the appraised value of any REO Property as determined
by the higher of two appraisals completed by two independent appraisers selected
by the Master Servicer at its expense, plus accrued and unpaid interest on the
related mortgage loans at the applicable mortgage rate and (y) the unpaid
principal balance of each Mortgage Loan related to any REO Property, in each
case plus accrued and unpaid interest thereon at the applicable Mortgage
Interest Rate and (2) the aggregate fair market value of each Mortgage Loan and
any REO Property, as determined by the highest bid received by the Trustee from
closed bids solicited by the Depositor or its designee from at least three
recognized broker/dealers (one of which may be an affiliate of the Depositor) as
of the close of business on the third Business Day preceding the date upon which
a Notice of Final Distribution is furnished to Certificateholders pursuant to
Section 11.02, plus accrued and unpaid interest on the Mortgage Loans at the
applicable Mortgage Interest Rate; and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement. In no event shall the trusts
created hereby continue beyond the expiration of 21 years from the death of the
survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the
United States to the Court of St. James's, living on the date hereof.
No such purchase will be permitted without the consent of the Class
A-F-3W Certificate Insurer, if the resulting amount available for payment on the
Class AF-3W Certificates would result in a claim under the Class AF-3W
Certificate Insurance Policy or any Reimbursement Amounts would remain unpaid to
the Class AF-3W Certificate Insurer.
The proceeds of the sale of such assets of the Trust (other than,
with respect to any mortgage loan and the related property, an amount equal to
the excess, if any, of the amount in Section 11.01(a)(2) over the sum of the
amount in Section 11.01(a)(1) (such excess, the "Fair Market Value Excess"))
will be distributed to the holders of the Certificates in accordance with
Section 4.01. Any Fair Market Value Excess received in connection with the
purchase of the Mortgage Loans and REO properties will be distributed to the
holders of the Class R-2 Certificates.
Except to the extent provided above with regard to allocating any
Fair Market Value Excess to the holders of the Class R-2 Certificates, the
proceeds of such a purchase will be treated as a prepayment of the Mortgage
Loans for purposes of distributions to Certificateholders. Accordingly, the
exercise by the electing Person of its option to purchase the Mortgage Loans and
REO properties will result in the final distribution on the Certificates on that
Distribution Date.
Section 11.02 Final Distribution on the Certificates. If, on any
Remittance Date, the Servicers notify the Securities Administrator that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Securities Administrator
shall promptly send a Notice of Final Distribution to the applicable
Certificateholders. If the electing Person elects to terminate the Trust Fund
pursuant to clause (a) of Section 11.01, by no later than the 10th day of the
month of the final distribution, the Master Servicer upon request by the
electing Person, if not the Master Servicer, pursuant to the Step 2 Assignment
Agreements, shall notify the Trustee and the Securities Administrator of the
final Distribution Date and of the applicable repurchase price of the Mortgage
Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not later than the 15th day
of the month of such final distribution. Any such Notice of Final Distribution
shall specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the amount of such final distribution, (c) the
location of the office or agency at which such presentation and surrender must
be made, and (d) that the Record Date otherwise applicable to such Distribution
Date is not applicable, distributions being made only upon presentation and
surrender of the Certificates at the office therein specified. The Securities
Administrator will give such Notice of Final Distribution to each Rating Agency
at the time such Notice of Final Distribution is given to Certificateholders.
In the event the electing Person purchases the Mortgage Loans (and
REO Properties) pursuant to Section 11.01(a), pursuant to the Step 2 Assignment
Agreements such electing Person is required thereunder to remit to the
Securities Administrator the applicable Termination Price on the Remittance Date
immediately preceding the applicable final Distribution Date. Upon such final
deposit with respect to the Trust Fund and the receipt by the Securities
Administrator and the Custodians of a request for release therefor, the Master
Servicer shall direct the Custodians to release and the relevant Custodians
shall promptly release to the Master Servicer or its designee the Custodial
Files for the Mortgage Loans. In the event the Notice of Final Distribution is
given and the Person electing to terminate the Trust Fund is the Class AF-3W
Certificate Insurer, the Class AF-3W Certificate Insurer shall remit the
applicable Termination Price in immediately available funds to the Securities
Administrator at least one Business Day prior to the applicable Distribution
Date.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due the Depositor, the Class AF-3W
Certificate Insurer and the Trustee hereunder), in each case on the final
Distribution Date and in the order set forth in Section 4.01, in proportion to
their respective Percentage Interests, with respect to Certificateholders of the
same Class, an amount up to an amount equal to (i) as to each Class of Regular
Certificates (except the Class X Certificates), the Certificate Balance thereof
plus for each such Class and the Class X Certificates accrued interest thereon
in the case of an interest-bearing Certificate and all other amounts to which
such Classes are entitled pursuant to Section 4.01, (ii) as to the Class R-2
Certificates, upon any exercise of the purchase option set forth in Section
11.01(a), held by the Trust after the distribution pursuant to clause (i) above
and (iii) as to the Residual Certificates, the amount, if any, which remains on
deposit in the Distribution Account after application pursuant to clause (i)
above (other than the amounts retained to meet claims, which retained amounts
shall also be released to the Residual Certificates, as applicable, as and to
the extent such amounts shall no longer be required to be so retained). The
foregoing provisions are intended to distribute to each Class of Regular
Certificates any accrued and unpaid interest and principal to which they are
entitled based on the Pass-Through Rates and actual Class Certificate Balances
or notional principal balances set forth in the Preliminary Statement upon
liquidation of the Trust.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund which remain subject hereto.
Section 11.03 Additional Termination Requirements. In the event the
electing Person elects to purchase the Mortgage Loans as provided in Section
11.01, the Trust Fund shall be terminated in accordance with the following
additional requirements, unless the Trustee and the Securities Administrator
have been supplied with an Opinion of Counsel, at the expense of the electing
Person, to the effect that the failure to comply with the requirements of this
Section 11.03 will not (i) result in the imposition of taxes on "prohibited
transactions" on either Trust REMIC as defined in Section 860F of the Code, or
(ii) cause either Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are Outstanding:
(a) The Securities Administrator on behalf of the Trustee shall sell
all of the assets of the Trust Fund to the person electing to terminate the
Trust Fund, or its designee, and, by the next Distribution Date after such sale,
shall distribute to the Certificateholders the proceeds of such sale in complete
liquidation of each of the Trust REMICs; and
(b) The Securities Administrator shall attach a statement to the
final federal income tax return for each of the Trust REMICs stating that
pursuant to Treasury Regulations Section 1.860F-1, the first day of the 90 day
liquidation period for each such Trust REMIC was the date on which the
Securities Administrator on behalf of the Trustee sold the assets of the Trust
Fund to the electing Person.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Master Servicer, the Securities Administrator, the
Custodians and the Trustee (and the Master Servicer may request an amendment or
consent to any amendment of a Servicing Agreement as directed by the Depositor)
without the consent of any of the Certificateholders (i) to cure any ambiguity
or mistake, (ii) to correct any defective provision herein or in the applicable
Servicing Agreement, or to supplement any provision in this Agreement which may
be inconsistent with any other provision herein or in the applicable Servicing
Agreement, (iii) to add to the duties of the Depositor, or the Trustee (or with
respect to the applicable Servicing Agreement, of the applicable Servicer) the
Master Servicer, the Securities Administrator or the Custodians, (iv) to add any
other provisions with respect to matters or questions arising hereunder or under
the applicable Servicing Agreement, or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement or in the
applicable Servicing Agreement; provided that any action pursuant to clause (iv)
or (v) above shall not, as evidenced by an Opinion of Counsel (which Opinion of
Counsel shall be an expense of the requesting party, but in any case shall not
be an expense of the Trustee, the Master Servicer, the Securities Administrator,
the Custodians or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; provided, further, that the amendment shall
not be deemed to adversely affect in any material respect the interests of the
Certificateholders if the Person requesting the amendment obtains a letter from
each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor, the Custodians, the
Securities Administrator and the Master Servicer also may at any time and from
time to time amend this Agreement (and the Master Servicer shall request the
Servicers amend the applicable Servicing Agreements), without the consent of the
Certificateholders, to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or helpful to (i) maintain the qualification of
each Trust REMIC under the REMIC Provisions, (ii) avoid or minimize the risk of
the imposition of any tax on either Trust REMIC pursuant to the Code that would
be a claim at any time prior to the final redemption of the Certificates or
(iii) comply with any other requirements of the Code; provided, that the Trustee
and the Master Servicer have been provided an Opinion of Counsel, which opinion
shall be an expense of the party requesting such opinion but in any case shall
not be an expense of the Trustee or the Trust Fund, to the effect that such
action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Custodians, the Securities Administrator and
the Trustee (and the Master Servicer shall consent to any amendment to the
applicable Servicing Agreement as directed by the Depositor) with the consent of
the Holders of Certificates evidencing Percentage Interests aggregating not less
than 66?% of each Class of Certificates affected thereby 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
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than
66?%, or (iii) reduce the aforesaid percentages of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all such Certificates then Outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee and the Master Servicer shall not consent to any amendment to this
Agreement or any Servicing Agreement unless (i) each shall have first received
an Opinion of Counsel, which opinion shall not be an expense of the Trustee, the
Master Servicer or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on either Trust REMIC or the Certificateholders
or cause either Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are Outstanding and (ii) the party seeking such amendment shall
have provided written notice to the Rating Agencies (with a copy of such notice
to the Trustee and the Master Servicer) of such amendment, stating the
provisions of the Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 12.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or a Servicer under the applicable Servicing Agreement, any
Certificate beneficially owned by the Depositor or any of its Affiliates or by
the Responsible Party or any of its Affiliates shall be deemed not to be
Outstanding (and shall not be considered when determining the percentage of
Certificateholders consenting or when calculating the total number of
Certificates entitled to consent) for purposes of determining if the requisite
consents of Certificateholders under this Section 12.01 have been obtained.
Promptly after the execution of any amendment to this Agreement or
any Servicing Agreement requiring the consent of Certificateholders, the Trustee
shall furnish written notification of the substance or a copy of such amendment
to each Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 12.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee, the Custodians,
the Master Servicer or the Securities Administrator to enter into an amendment
which modifies its obligations or liabilities without its consent and in all
cases without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee, the Custodians, the Master Servicer, the Securities
Administrator or the Trust Fund), satisfactory to the Trustee, the Master
Servicer or the Securities Administrator, as applicable, that (i) such amendment
is permitted and is not prohibited by this Agreement or the applicable Servicing
Agreement and that all requirements for amending this Agreement or such
Servicing Agreement have been complied with; and (ii) either (A) the amendment
does not adversely affect in any material respect the interests of any
Certificateholder or (B) the conclusion set forth in the immediately preceding
clause (A) is not required to be reached pursuant to this Section 12.01.
Notwithstanding the foregoing, no amendment to this Agreement shall
be made without the prior written consent of the Class AF-3W Certificate Insurer
until the later of (a) the date on which the Class Certificate Balance of the
Class AF-3W Certificates is reduced to zero and (b) the date on which all
amounts owing to the Class AF-3W Certificate Insurer under the Class AF-3W
Certificate Insurance Policy and the Insurance Agreement have been paid in full.
Notwithstanding the Trustee's consent to, or the Master Servicer's
request for, any amendment of any Servicing Agreement pursuant to the terms of
this Section 12.01, such Servicing Agreement cannot be amended without the
consent of the applicable Servicer. Neither the Master Servicer nor the Trustee
shall be responsible for any failure by such Servicer to consent to any
amendment to the applicable Servicing Agreement.
Section 12.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation shall be
effected by the Depositor at the expense of the Trust, but only if an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders is delivered to the Depositor.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, either of such assets are held
to be the property of the Depositor, or if for any other reason this Agreement
is held or deemed to create a security interest in either of such assets, then
(i) this Agreement shall be deemed to be a security agreement within the meaning
of the Uniform Commercial Code of the State of New York and (ii) the conveyances
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets transferred, whether now owned or
hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, 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 Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 12.05 Notices. (a) The Securities Administrator shall use
its best efforts to promptly provide notice to each Rating Agency with respect
to each of the following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of a Servicer, Master Servicer,
Securities Administrator or the Trustee and the appointment of any
successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
this Agreement or the Sale Agreements; and
(v) The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly make
available on its internet website to each Rating Agency copies of the following:
(i) Each report to Certificateholders described in Section 4.02.
(ii) The Servicer's annual statement of compliance and the
accountant's report described in the Servicing Agreements; and
(iii) Any notice of a purchase of a Mortgage Loan pursuant to this
Agreement and any Sale Agreement.
(c) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor or GS Mortgage Securities Corp. or ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Principal Finance
Group/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Asset Management Group/Senior Asset Manager, or
such other address as may be hereafter furnished to the Securities Administrator
by the Depositor in writing; (b) in the case of ▇▇▇▇▇ Fargo as Servicer and
Responsible Party, ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or such other
address as may be hereafter furnished to the Depositor and the Securities
Administrator by ▇▇▇▇▇ Fargo in writing; (c) in the case of M&T Mortgage, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other address as may be
hereafter furnished to the Depositor and the Securities Administrator by M&T
Mortgage in writing; (d) in the case of Countrywide Servicing, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or such other address as may be hereafter furnished
to the Depositor and the Securities Administrator by Countrywide Servicing in
writing; (e) in the case of FNBN, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other address as may be hereafter furnished to the
Depositor and the Securities Administrator by FNBN in writing; (f) in the case
of the Goldman Conduit, ▇▇▇▇▇▇▇ Sachs Mortgage Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; (g) in the case of the Trustee or the Securities
Administrator to its Corporate Trust Office, or such other address as the
Trustee or the Securities Administrator may hereafter furnish to the Depositor;
(h) in the case of the Master Servicer, ▇▇▇▇▇ Fargo Bank, N.A., ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: GSAA 2005-12, or such other address as may
be hereafter furnished to the Depositor and the Securities Administrator by the
Master Servicer in writing; (i) in the case of ▇▇▇▇▇ Fargo as Servicer and
Responsible Party, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or
such other address as may be hereafter furnished to the Depositor and the
Securities Administrator by ▇▇▇▇▇ Fargo in writing; (j) in the case of Deutsche
Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Mortgage Custody - GS05RC; (k) in the case of ▇.▇. ▇▇▇▇▇▇
Trust Company, National Association, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇; (l) in the case of each of the Rating Agencies, the address
specified therefor in the definition corresponding to the name of such Rating
Agency; and (m) in the case of the Class AF-3W Certificate Insurer, to Financial
Security Assurance Inc., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Notices
to Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 12.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 12.07 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 12.07, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.08 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 12.09 Third Party Beneficiary. The parties agree that the
Class AF-3W Certificate Insurer is intended and shall have all rights of a
third-party beneficiary of this Agreement to the same extent as if it were a
party to this Agreement.
Section 12.10 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW)
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
* * *
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
GS MORTGAGE SECURITIES CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
HSBC BANK USA, NATIONAL ASSOCIATION,
solely as Trustee and not in its
individual capacity
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
▇▇▇▇▇ FARGO BANK, N.A., as Master
Servicer, Securities Administrator
and a Custodian
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as a Custodian
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Associate
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇.▇. ▇▇▇▇▇▇ TRUST COMPANY, NATIONAL
ASSOCIATION, as a Custodian
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Asst. Vice President
SCHEDULE I
Mortgage Loan Schedule
[Available from the Trustee or the Securities Administrator upon Request]
EXHIBIT A
FORM OF CLASS AV-1, CLASS AF-2, CLASS AF-3, CLASS AF-3W, CLASS AF-4, CLASS
AF-5, CLASS AF-6, CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5,
CLASS M-6, CLASS B-1, CLASS B-2, B-3 AND CLASS B-4 CERTIFICATES
[To be added to the Class B-4 Certificates while they remain Private
Certificates: IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR CERTIFICATE
(THE "TRANSFEROR CERTIFICATE") IN THE FORM OF EXHIBIT I TO THE AGREEMENT
REFERRED TO HEREIN AND EITHER (I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE
144A LETTER (THE "RULE 144A LETTER") IN THE FORM OF EXHIBIT J TO THE AGREEMENT
REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES AN OPINION OF
COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE
MADE WITHOUT-REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.]
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
[To be added to the Class B-4 Certificates while they remain non-investment
grade Certificates: NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR
EITHER A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE, OR A PLAN SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR
LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A
PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR, IF THE
TRANSFEREE IS AN INSURANCE COMPANY, A REPRESENTATION LETTER THAT IT IS USING THE
ASSETS OF ITS GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE SATISFY THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR, TO
THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE
OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING OF ERISA,
SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT SUBJECT THE DEPOSITOR,
THE TRUSTEE, THE MASTER SERVICER, THE SERVICERS OR THE SECURITIES ADMINISTRATOR
TO ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR
TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE
SECURITIES ADMINISTRATOR, TRUSTEE AND DEPOSITOR AS DESCRIBED ABOVE SHALL BE VOID
AND OF NO EFFECT.]
IN THE EVENT THAT A TRANSFER OF A PRIVATE CERTIFICATE WHICH IS A BOOK-ENTRY
CERTIFICATE IS TO BE MADE IN RELIANCE UPON AN EXEMPTION FROM THE SECURITIES ACT
AND SUCH LAWS, IN ORDER TO ASSURE COMPLIANCE WITH THE SECURITIES ACT AND SUCH
LAWS, THE CERTIFICATEHOLDER DESIRING TO EFFECT SUCH TRANSFER WILL BE DEEMED TO
HAVE MADE AS OF THE TRANSFER DATE EACH OF THE CERTIFICATIONS SET FORTH IN THE
TRANSFEROR CERTIFICATE IN RESPECT OF SUCH CERTIFICATE AND THE TRANSFEREE WILL BE
DEEMED TO HAVE MADE AS OF THE TRANSFER DATE EACH OF THE CERTIFICATIONS SET FORTH
IN THE RULE 144A LETTER IN RESPECT OF SUCH CERTIFICATE, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
[To be added to the Class B-4 Certificates while they remain Private
Certificates: THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE
WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION
EXEMPTED FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH
THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
Certificate No. :
Cut-off Date : October 1, 2005
First Distribution Date : November 25, 2005
Initial Certificate Balance of
this Certificate
("Denomination") :
Initial Certificate Balances of
all Certificates of this Class : [AV-1] [$253,054,000]
[AF-2] [$21,174,000] [AF-3]
[$18,492,000] [AF-3W]
[$75,000,000] [AF-4] [$64,211,000]
[AF-5] [$42,067,000] [AF-6]
[$52,666,000] [M-1] [$7,105,000]
[M-2] [$7,105,000] [M-3]
[$3,979,000] [M-4] [$3,694,000]
[M-5] [$3,694,000] [M-6]
[$2,842,000] [B-1] [$2,558,000]
[B-2] [$1,989,000] [B-3]
[$2,842,000] [B-4] [$3,126,000]
CUSIP : [AV-1] [362341 SP 5]
[AF-2] [362341 SQ 3]
[AF-3] [362341 SR 1]
[AF-3W] [362341 TK 5]
[AF-4] [362341 SS 9]
[AF-5] [362341 ST 7]
[AF-6] [362341 SU 4]
[M-1] [362341 SV 2]
[M-2] [362341 SW 0]
[M-3] [362341 SX 8]
[M-4] [362341 SY 6]
[M-5] [362341 SZ 3]
[M-6] [362341 TA 7]
[B-1] [362341 TB 5]
[B-2] [362341 TC 3]
[B-3] [362341 TD 1]
[B-4] [362341 TJ 8]
ISIN : [AV-1] [US362341SP52]
[AF-2] [US362341SQ36]
[AF-3] [US362341SR19]
[AF-3W][US362341TK56]
[AF-4] [US362341SS91]
[AF-5] [US362341ST74]
[AF-6][US362341SU48]
[M-1] [US362341SV21]
[M-2] [US362341SW04]
[M-3] [US362341SX86]
[M-4] [US362341SY69]
[M-5] [US362341SZ35]
[M-6] [US362341TA74]
[B-1] [US362341TB57]
[B-2] [US362341TC31]
[B-3] [US362341TD14]
[B-4] [US362341TJ83]
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2005-12
Asset-Backed Certificates, Series 2005-12
[Class AV-1][Class AF-2][Class AF-3][Class AF-3W][Class AF-4][Class
AF-5][Class AF-6]
[Class M-1][Class M-2][Class M-3][Class M-4][Class M-5][Class M-6]
[Class B-1][Class B-2][Class B-3][Class B-4]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Master Servicer, the Securities Administrator or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Master Servicing and Trust Agreement dated as of the
Cut-off Date specified above (the "Agreement") among GS Mortgage Securities
Corp., as depositor (the "Depositor"), HSBC Bank USA, National Association, as
trustee (the "Trustee"), ▇▇▇▇▇ Fargo Bank, N.A., as Master Servicer (in such
capacity, the "Master Servicer"), Securities Administrator (in such capacity,
the "Securities Administrator") and a custodian, Deutsche Bank National Trust
Company, as a custodian and ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association, as
a custodian. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity, but
solely as
Securities Administrator
By:
Authenticated:
By:
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2005-12
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2005-12 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date for each
Distribution Date is the last Business Day of the applicable Interest Accrual
Period for the related Distribution Date; provided, however, that for any
Definitive Certificates, the Record Date shall be the last Business Day of the
month immediately preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes, or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Trustee and the other parties to the Agreement with the
consent of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Trustee, the Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 11.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
----------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
--------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______, or, if mailed by check, to ___________________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT B
FORM OF CLASS P CERTIFICATE
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN AND
EITHER (I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM
OF EXHIBIT J TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE TRUSTEE RECEIVES AN
OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH
TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER SATISFACTORY TO THE SECURITIES ADMINISTRATOR
AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : October 1, 2005
First Distribution Date : November 25, 2005
Percentage Interest of this Certificate
("Denomination") : [_____]%
CUSIP : ▇▇▇▇▇▇ ▇▇ 2
ISIN : US362341TH28
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2005-12
Asset-Backed Certificates, Series 2005-12
Class P
evidencing a percentage interest in the distributions allocable to the
Certificates of the above referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Master
Servicer, the Securities Administrator or the Trustee referred to below or any
of their respective affiliates. Neither this Certificate nor the Mortgage Loans
are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_______________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Master Servicing and
Trust Agreement dated as of the Cut-off Date specified above (the "Agreement")
among GS Mortgage Securities Corp., as depositor (the "Depositor"), HSBC Bank
USA, National Association, as trustee (the "Trustee"), ▇▇▇▇▇ Fargo Bank, N.A.,
as Master Servicer (in such capacity, the "Master Servicer"), Securities
Administrator (in such capacity, the "Securities Administrator") and a
custodian, Deutsche Bank National Trust Company, as a custodian and ▇.▇. ▇▇▇▇▇▇
Trust Company, National Association, as a custodian. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
office designated by the Securities Administrator for such purposes or the
office or agency maintained by the Securities Administrator.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Securities Administrator that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which
Opinion of Counsel shall be an expense of the transferor. No transfer of a
Certificate of this Class shall be made unless the Securities Administrator
shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Securities Administrator, to the effect that such transferee is not an employee
benefit plan subject to Section 406 of ERISA or Section 4975 of the Code or any
materially similar provisions of applicable federal, state or local law
("Similar Law") or a person acting on behalf of or investing plan assets of any
such plan, which representation letter shall not be an expense of the Securities
Administrator.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities
Administrator
By:
Authenticated:
By:
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2005-12
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2005-12 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date for each
Distribution Date is the last Business Day of the month immediately preceding
the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Trustee and the other parties to the Agreement with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Trustee, the Depositor, the Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Principal Balance, the Person specified in Section 11.01 of the Agreement will
have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
----------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
---------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______, or, if mailed by check, to ___________________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT C
FORM OF REQUEST FOR RELEASE
(for ▇▇▇▇▇ Fargo Bank, N.A., as a custodian)
In connection with the administration of the Mortgage Loans held by
you as a custodian, we request the release, and acknowledge receipt, of the
(Custodial File/[specify documents]) for the Mortgage Loan described below, for
the reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Send Custodial File to:
Reason for Requesting Documents (check one)
_______ 1. Mortgage Loan Paid in Full. (The requestor hereby
certifies that all amounts received in connection therewith
have been credited to the Collection Account pursuant to
the Trust Agreement.)
_______ 2. Mortgage Loan Repurchased Pursuant to any or all of the
Trust Agreement, the applicable Servicing Agreements or the
Assignment Agreements. (The requestor hereby certifies that
the Repurchase Price (as defined in the applicable agreement)
has been credited to the Collection Account pursuant to the
Trust Agreement.)
_______ 3. Mortgage Loan Liquidated by _________________. (The
requestor hereby certifies that all proceeds of foreclosure,
insurance, condemnation or other liquidation have been finally
received and credited to the Collection Account pursuant to
the Trust Agreement.)
_______ 4. Mortgage Loan in Foreclosure.
_______ 5. Other (explain).
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
Capitalized terms not defined herein shall have the meanings set
forth in the Master Servicing and Trust Agreement, dated as of October 1, 2005
(the "Trust Agreement"), among GS Mortgage Securities Corp., as depositor, HSBC
Bank USA, National Association, as trustee, Deutsche Bank National Trust
Company, as a custodian, ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association, as a
custodian and ▇▇▇▇▇ Fargo Bank, N.A., as master servicer, securities
administrator and as a custodian.
I, the undersigned, hereby certify that the above statements are
true and correct and set my name hereof on this __ day of ___________, 200_.
[REQUESTOR]
By:
------------------------------------
Name:
Title:
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the custodian, please acknowledge your receipt by signing in
the space indicated below, and returning this form, if requested.
▇▇▇▇▇ FARGO BANK, N.A.,
as a Custodian
By:
-----------------------------------
Name:
Title
EXHIBIT D
FORM OF CLASS R-1 AND CLASS R-2 CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR
PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON
INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT
SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT,
SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : [R-1][R-2]
Cut-off Date : October 1, 2005
First Distribution Date : November 25, 2005
Initial Certificate Balance
of this Certificate
("Denomination") : $100
Initial Certificate Balance
of all Certificates of this
Class: : $100
[R-1] [362341 TE 9]
CUSIP : [R-2] [362341 TF 6]
[R-1] [US362341TE96]
ISIN : [R-2] [US362341TF61]
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2005-12
Asset-Backed Certificates, Series 2005-12
Class [R-1] [R-2]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Master Servicer, the Securities Administrator or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [____________] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class [R-1][R-2] Certificates pursuant to a Master Servicing and Trust Agreement
dated as of the Cut-off Date specified above (the "Agreement") among GS Mortgage
Securities Corp., as depositor (the "Depositor"), HSBC Bank USA, National
Association, as trustee (the "Trustee"), ▇▇▇▇▇ Fargo Bank, N.A., as Master
Servicer (in such capacity, the "Master Servicer"), Securities Administrator (in
such capacity, the "Securities Administrator") and a custodian, Deutsche Bank
National Trust Company, as a custodian and ▇.▇. ▇▇▇▇▇▇ Trust Company, National
Association, as a custodian. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class
[R-1][R-2] Certificate at the office designated by the Securities Administrator
for such purposes.
No transfer of a Class [R-1][R-2] Certificate shall be made unless
the Securities Administrator shall have received a representation letter from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of ERISA,
a plan or arrangement subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement or
using the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Securities Administrator or
the Trust Fund. In the event that such representation is violated, or any
attempt is made to transfer to a plan or arrangement subject to Section 406 of
ERISA or a plan subject to Section 4975 of the Code or a plan subject to Similar
Law, or a person acting on behalf of any such plan or arrangement or using the
assets of any such plan or arrangement, such attempted transfer or acquisition
shall be void and of no effect.
Each Holder of this Class [R-1][R-2] Certificate shall be deemed by
the acceptance or acquisition an Ownership Interest in this Class [R-1][R-2]
Certificate to have agreed to be bound by the following provisions, and the
rights of each Person acquiring any Ownership Interest in this Class [R-1][R-2]
Certificate are expressly subject to the following provisions: (i) each Person
holding or acquiring any Ownership Interest in this Class [R-1][R-2] Certificate
shall be a Permitted Transferee and shall promptly notify the Securities
Administrator of any change or impending change in its status as a Permitted
Transferee, (ii) no Ownership Interest in this Class [R-1][R-2] Certificate may
be registered on the Closing Date or thereafter transferred, and the Securities
Administrator shall not register the Transfer of this Certificate unless, in
addition to the certificates required to be delivered to the Securities
Administrator under Section 5.02(b) of the Agreement, the Securities
Administrator shall have been furnished with a Transfer Affidavit of the initial
owner or the proposed transferee in the form attached as Exhibit H to the
Agreement, (iii) each Person holding or acquiring any Ownership Interest in this
Class [R-1][R-2] Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership Interest
this Class [R-1][R-2] Certificate, (B) to obtain a Transfer Affidavit from any
Person for whom such Person is acting as nominee, trustee or agent in connection
with any Transfer of this Class [R-1][R-2] Certificate, (C) not to cause income
with respect to the Class [R-1][R-2] Certificate to be attributable to a foreign
permanent establishment or fixed base, within the meaning of an applicable
income tax treaty, of such Person or any other U.S. Person and (D) not to
Transfer the Ownership Interest in this Class [R-1][R-2] Certificate or to cause
the Transfer of the Ownership Interest in this Class [R-1][R-2] Certificate to
any other Person if it has actual knowledge that such Person is not a Permitted
Transferee and (iv) any attempted or purported Transfer of the Ownership
Interest in this Class [R-1][R-2] Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities
Administrator
By:
Authenticated:
By:
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2005-12
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2005-12 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date for each
Distribution Date is the last Business Day of the monthly immediately preceding
the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes, or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Trustee and the other parties to the Agreement with the
consent of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor, the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Trustee or Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 11.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
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(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------------
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______, or, if mailed by check, to ___________________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT E
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER ASSETS
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN AND
EITHER (I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM
OF EXHIBIT J TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT-REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR IF THE TRANSFEREE IS AN
INSURANCE COMPANY AND THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION LETTER THAT IT IS USING THE
ASSETS OF ITS GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE SATISFY THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR, TO
THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE
OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING OF ERISA,
SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE,
THE MASTER SERVICER, THE DEPOSITOR OR THE SECURITIES ADMINISTRATOR TO ANY
OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR TO ANY
LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED
TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE
REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES
ADMINISTRATOR AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : October 1, 2005
First Distribution Date : November 25, 2005
Percentage Interest of this
Certificate ("Denomination") : 100%
CUSIP : 362341 TG 4
ISIN : US362341TG45
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2005-12
Asset-Backed Certificates, Series 2005-12
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor the Master
Servicer, to Securities Administrator or the Trustee referred to below or any of
their respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_______________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the Denomination of this Certificate by the aggregate of the
Denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Master Servicing and
Trust Agreement dated as of the Cut-off Date specified above (the "Agreement")
among GS Mortgage Securities Corp., as depositor (the "Depositor"), HSBC Bank
USA, National Association, as trustee (the "Trustee"), ▇▇▇▇▇ Fargo Bank, N.A.,
as Master Servicer (in such capacity, the "Master Servicer"), Securities
Administrator (in such capacity, the "Securities Administrator") and a
custodian, Deutsche Bank National Trust Company, as a custodian and ▇.▇. ▇▇▇▇▇▇
Trust Company, National Association, as a custodian. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
office designated by the Securities Administrator for such purposes or the
office or agency maintained by the Securities Administrator.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Securities Administrator that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which
Opinion of Counsel shall be an expense of the transferor. No transfer of a
Certificate of this Class shall be made unless the Securities Administrator
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Securities Administrator, to the effect that such transferee is not an employee
benefit plan subject to Section 406 of ERISA or Section 4975 of the Code or any
materially similar provisions of applicable federal, state or local law
("Similar Law") or a person acting on behalf of or investing plan assets of any
such plan, which representation letter shall not be an expense of the Securities
Administrator, or (ii) if the transferee is an insurance company and the
certificate has been the subject of an ERISA-Qualifying Underwriting, a
representation letter that it is purchasing such Certificates with the assets of
its general account and that the purchase and holding of such Certificates
satisfy the requirements for exemptive relief under Sections I and III of PTCE
95-60, or (iii) in the case of a Certificate presented for registration in the
name of an employee benefit plan subject to ERISA, or a plan or arrangement
subject to Section 4975 of the Code (or comparable provisions of any subsequent
enactments) or a plan subject to Similar Law, or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Securities Administrator, which Opinion of Counsel shall not be an expense of
the Securities Administrator, the Depositor, the Trustee or the Trust Fund,
addressed to the Securities Administrator, the Trustee and the Depositor to the
effect that the purchase and holding of such Certificate will not constitute or
result in a non-exempt prohibited transaction within the meaning of ERISA,
Section 4975 of the Code or any Similar Law and will not subject the Trustee to
any obligation in addition to those expressly undertaken in this Agreement or to
any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities
Administrator
By:
Authenticated:
By:
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2005-12
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2005-12 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date for each
Distribution Date is the last Business Day of the month immediately preceding
the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Trustee and the other parties to the Agreement with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Trustee, the Depositor, the Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Principal Balance, the Person specified in Section 11.01 of the Agreement will
have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
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--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------------
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______, or, if mailed by check, to ___________________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT F
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
[Trustee]
[Class AF-3W Certificate Insurer]
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---------------------
Re: Master Servicing and Trust Agreement, dated as of October 1, 2005,
among GS Mortgage Securities Corp., as depositor, HSBC Bank USA,
National Association, as trustee, ▇▇▇▇▇ Fargo Bank, N.A., as Master
Servicer, Securities Administrator and a custodian, Deutsche Bank
National Trust Company, as a custodian and ▇.▇. ▇▇▇▇▇▇ Trust
Company, National Association, as a custodian
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Master
Servicing and Trust Agreement (the "Trust Agreement"), the undersigned, as
Custodian, for each Mortgage Loan listed in the Mortgage Loan Schedule for which
the undersigned is specified as the Custodian (other than any Mortgage Loan
listed in the attached schedule), certifies that it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) except with respect to a MERS Loan, a duly executed Assignment
of the Mortgage (which may be included in a blanket assignment or
assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Trust Agreement. The Custodian makes no representations as to: (i) the validity,
legality, sufficiency, enforceability, recordability or genuineness of any of
the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan or the
perfection or priority of any Mortgage. Notwithstanding anything herein to the
contrary, the Custodian has made no determination and makes no representations
as to whether (i) any endorsement is sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note or (ii) any assignment is in recordable form or sufficient to
effect the assignment of and transfer to the assignee thereof, under the
Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.
[▇▇▇▇▇ FARGO BANK, N.A.]
[DEUTSCHE BANK NATIONAL TRUST
COMPANY], [▇.▇. ▇▇▇▇▇▇ TRUST
COMPANY, NATIONAL ASSOCIATION]
By:
--------------------------------------
Name:
Title:
EXHIBIT G
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
[date]
[Depositor]
[Servicer]
[Responsible Party]
---------------------
---------------------
Re: Master Servicing and Trust Agreement, dated as of October 1, 2005,
among GS Mortgage Securities Corp., as depositor, HSBC Bank USA,
National Association, as trustee, ▇▇▇▇▇ Fargo Bank, N.A., as Master
Servicer, Securities Administrator and a custodian, Deutsche Bank
National Trust Company, as a custodian and ▇.▇. ▇▇▇▇▇▇ Trust
Company, National Association, as a custodian
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Master
Servicing and Trust Agreement (the "Trust Agreement"), the undersigned, as
Custodian, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule for which the undersigned is specified as the Custodian (other
than any Mortgage Loan paid in full or listed on the attached Document Exception
Report) it has received:
(a) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(b) The original Assignment of Mortgage in blank, unless the
Mortgage Loan is a MERS Mortgage Loan;
(c) personal endorsement and/or guaranty agreements executed in
connection with all non-individual Mortgage Loans (corporations,
partnerships, trusts, estates, etc. (if any);
(d) the related original Mortgage and evidence of its recording or,
in certain limited circumstances, a certified copy of the mortgage with
evidence of recording with the standard ▇▇▇▇▇▇ ▇▇▇/FHLMC Condominium Rider
or PUD Rider be attached if the mortgaged property is a condominium or is
located in a PUD;
(e) except with respect to a MERS Loan, originals of any intervening
Mortgage assignment or certified copies in either case evidencing
recording; provided that the assignment may be in the form of a blanket
assignment or assignments, a copy of which with evidence of recording
shall be acceptable;
(f) originals of all assumption, modification, agreements or
certified copies thereof, in either case with evidence of recording if
required to maintain the lien of the mortgage or if otherwise required,
or, if recordation is not required, an original or copy of the agreement;
(g) an original or copy of a title insurance policy, a certificate
of title, or attorney's opinion of title and abstract of title;
(h) to the extent applicable, (1) an original power of attorney, or
a certified copy thereof, in either case with evidence of recordation
thereon if necessary to maintain the lien of the Mortgage or if the
document to which such power of attorney relates is required to be
recorded, or, if recordation is not so required, an original or copy of
such power of attorney, and (2) an original or copy of any surety
agreement or guaranty agreement;
(i) for each Mortgage Loan with respect to which the Mortgagor's
name as it appears on the note does not match the borrower's name on the
mortgage loan schedule, one of the following: the original of the
assumption agreement, or a certified copy thereof, in either case with
evidence of recording thereon if required to maintain the lien of the
mortgage or if otherwise required, or, if recordation is not so required,
an original or copy of such assumption agreement;
(j) a security agreement, chattel mortgage or equivalent document
executed in connection with the mortgage, if any.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items 2, 8, 33 and 34 of the
Mortgage Loan Schedule accurately reflects information set forth in the
Custodial File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Trust Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or the perfection or priority of any Mortgage. Notwithstanding anything
herein to the contrary, the Custodian has made no determination and makes no
representations as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.
[▇▇▇▇▇ FARGO BANK, N.A.]
[DEUTSCHE BANK NATIONAL TRUST
COMPANY], [▇.▇. ▇▇▇▇▇▇ TRUST
COMPANY, NATIONAL ASSOCIATION] not
in its individual capacity, but
solely as Custodian
By:____________________________________
Name:
Title:
EXHIBIT H
FORM OF RESIDUAL TRANSFER AFFIDAVIT
GSAA Home Equity Trust 2005-12,
Asset-Backed Certificates, Series 2005-12
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class [R-1][R-2] Certificate
(the "Certificate") issued pursuant to the Master Servicing and Trust Agreement
(the "Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), HSBC Bank USA, National Association, as trustee (the "Trustee"),
▇▇▇▇▇ Fargo Bank, N.A., as Master Servicer (in such capacity, the "Master
Servicer"), Securities Administrator (in such capacity, the "Securities
Administrator") and a custodian, Deutsche Bank National Trust Company, as a
custodian and ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association, as a custodian.
Capitalized terms used, but not defined herein, shall have the meanings ascribed
to such terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee for the benefit of the
Depositor, the Securities Administrator and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass through entity an
affidavit that such record holder is a Permitted Transferee and the pass through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Securities Administrator a certificate
substantially in the form set forth as Exhibit H to the Agreement (a "Transferor
Certificate") to the effect that such Transferee has no actual knowledge that
the Person to which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee has historically paid its debts as they have come
due, intends to pay its debts as they come due in the future, and understands
that the taxes payable with respect to the Certificate may exceed the cash flow
with respect thereto in some or all periods and intends to pay such taxes as
they become due. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Certificate to be
attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of the Transferee or any other U.S.
person.
12. Check one of the following:
[_] The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
(i) the present value of any consideration given to the
Transferee to acquire such Certificate;
(ii) the present value of the expected future distributions on
such Certificate; and
(iii) the present value of the anticipated tax savings
associated with holding such Certificate as the related REMIC
generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee:
[_] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly:
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to which
income from the Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer,
the Transferee had gross assets for financial reporting purposes
(excluding any obligation of a person related to the Transferee
within the meaning of U.S. Treasury Regulations Section
1.860E-1(c)(6)(ii)) in excess of $100 million and net assets in
excess of $10 million;
(iii) the Transferee will transfer the Certificate only to
another "eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii) and
(iii) and Section 1.860E-1(c)(5) of the U.S. Treasury Regulations;
and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions
(including, but not limited to, borrowing and investment rates,
prepayment and loss assumptions, expense and reinvestment
assumptions, tax rates and other factors specific to the Transferee)
that it has determined in good faith.
[_] None of the above.
13. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any federal, state or local law that is substantially similar to
Title I of ERISA or Section 4975 of the Code, and the Transferee is not acting
on behalf of or investing plan assets of such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of _______, 20__.
-------------------------------
Print Name of Transferee
By:
-------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------------
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ________, 20__.
---------------------------
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT I
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ Fargo Bank, N.A.
[Address]
Re: GSAA Home Equity Trust 2005-12,
Asset-Backed Certificates Series 2005-12, Class [?]
---------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (A) we have no
knowledge the Transferee is not a Permitted Transferee and (B) after conducting
a reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (C) we have no
reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
-----------------------------------------
Print Name of Transferor
By:
-------------------------------------
Authorized Officer
EXHIBIT J
FORM OF RULE 144A LETTER
____________, 20__
GS Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ Fargo Bank, N.A.
[Address]
Re: GSAA Home Equity Trust 2005-12,
Asset-Backed Certificates, Series 2005-12, Class [?]
----------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class AV-1
Certificate, Class AF-2 Certificate, Class AF-3 Certificate, Class AF-3W
Certificate, Class AF-4 Certificate, Class AF-5 Certificate, Class AF-6
Certificate, Class M-1 Certificate, Class M-2 Certificate, Class M-3
Certificate, Class M-4 Certificate, Class M-5 Certificate, Class M-6
Certificate, Class B-1, Class B-2 or a Class B-3 Certificate, or we are not an
employee benefit plan that is subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a plan or arrangement that
is subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), or a plan subject to any federal, state or local law materially similar
to the foregoing provisions of ERISA or the Code, nor are we acting on behalf of
any such plan or arrangement or using the assets of any such plan or arrangement
to effect such acquisition, or, with respect to a Class B-4 or Class X
Certificate that has been the subject of an ERISA-Qualifying Underwriting, the
purchaser is an insurance company that is purchasing this certificate with funds
contained in an "insurance company general account" (as such term is defined in
Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and
the purchase and holding of such Certificates satisfy the requirements for
exemptive relief under Sections I and III of PTCE 95-60, (e) we have not, nor
has anyone acting on our behalf offered, transferred, pledged, sold or otherwise
disposed of the Certificates, any interest in the Certificates or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Certificates, any interest in the Certificates or
any other similar security from, or otherwise approached or negotiated with
respect to the Certificates, any interest in the Certificates or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates and (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $___________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
--------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
____ Corporation, etc. The Buyer is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar business
trust, partnership, or charitable organization described in Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the business
of which is substantially confined to banking and is supervised by the State or
territorial banking commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at least $25,000,000
as demonstrated in its latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan association, building
and loan association, cooperative bank, homestead association or similar
institution, which is supervised and examined by a State or Federal authority
having supervision over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of a State, territory
or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the State
or its political subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor registered under the
Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business investment
company licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development company
as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
-----------------------------
Print Name of Transferee
By:
--------------------------------------
Name:
Title:
Date:
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $___________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in the
aggregate $__________ in securities (other than the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
-----------------------------------------
Print Name of Transferee
By:
--------------------------------------
Name:
Title:
IF AN ADVISER:
-----------------------------------------
Print Name of Buyer
Date:
------------------------------------
EXHIBIT K
FORM OF CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
GSAA Home Equity Trust 2005-12 (the "Trust")
Asset-Backed Certificates
Series 2005-12
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10 K (the "Annual Report"), and
all reports on Form 8 K containing distribution date reports (collectively
with this Annual Report, the "Reports") filed in respect of periods
included in the year covered by this Annual Report, of the Trust;
2. Based on my knowledge, the information in these Reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by this Annual Report;
3. Based on my knowledge, the distribution or servicing information required
to be provided to the Securities Administrator by the Master Servicer
under the Trust Agreement for inclusion in the Reports is included in the
Reports;
4. Based on my knowledge and upon the annual compliance statement included in
this Annual Report and required to be delivered to the Master Servicer in
accordance with the terms of the Trust Agreement, and except as disclosed
in the Reports, the Master Servicer has fulfilled its obligations under
the Trust Agreement; and; and
5. The Reports disclose all significant deficiencies relating to the Master
Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure, as set forth in the Trust
Agreement, that is included in the Reports.
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: the Securities
Administrator and the Master Servicer.
Dated:
-------------------------------------
-------------------------------------
[Signature]
[Title]
EXHIBIT L
FORM OF MASTER SERVICER CERTIFICATION TO
BE PROVIDED TO DEPOSITOR
Re: GSAA Home Equity Trust 2005-12 (the "Trust") Asset-Backed
Certificates Series 2005-12, issued pursuant to the Master
Servicing and Trust Agreement, dated as of October 1, 2005
(the "Trust Agreement"), among GS Mortgage Securities Corp.,
as depositor, HSBC Bank USA, National Association, as trustee,
▇▇▇▇▇ Fargo Bank, N.A., as Master Servicer, Securities
Administrator and a custodian, Deutsche Bank National Trust
Company, as a custodian and ▇.▇. ▇▇▇▇▇▇ Trust Company,
National Association, as a custodian
I, [identify the certifying individual], a [title] of ▇▇▇▇▇ Fargo
Bank, N.A., certify to the Depositor and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:
1. I have reviewed the annual report on Form 10-K (the "Annual
Report") for the fiscal year [___], and all reports on Form 8
K containing distribution reports filed in respect of periods
included in the year covered by the Annual Report
(collectively with the Annual Report, the "Reports"), of the
Trust;
2. Based on my knowledge, the information in the Reports, taken
as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under
which such statements were made, not misleading as of the last
day of the period covered by the Annual Report; and
3. Based on my knowledge, the distribution or servicing
information required to be provided to the Master Servicer by
▇▇▇▇▇ Fargo Bank, N.A., M&T Mortgage Corporation and
Countrywide Home Loans Servicing LP, as servicers, for
inclusion in the Reports is included in the Reports.
Dated:
▇▇▇▇▇ FARGO BANK, N.A.
By:
--------------------------------------
Name:
Title:
EXHIBIT M
MASTER SELLER'S WARRANTIES AND SERVICING AGREEMENT, DATED AUGUST 1, 2004, AS
AMENDED BY AMENDMENT NO. 1, DATED AS OF APRIL 26, 2005, BETWEEN ▇▇▇▇▇▇▇ SACHS
MORTGAGE COMPANY AND ▇▇▇▇▇ FARGO BANK, N.A.
EXECUTION COPY
----------------------------------------------------
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY
Purchaser
and
▇▇▇▇▇ FARGO BANK, N.A.
Company
----------------------------------------------------
MASTER SELLER'S WARRANTIES AND SERVICING AGREEMENT
Dated as of August 1, 2004
----------------------------------------------------
Fixed Rate and Adjustable Rate Residential Mortgage Loans
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS;
DELIVERY OF DOCUMENTS
Section 2.1 Conveyance of Mortgage Loans; Possession of Mortgage
Files; Maintenance of Servicing Files..........................
Section 2.2 Books and Records; Transfers of Mortgage Loans.................
Section 2.3 Delivery of Documents..........................................
Section 2.4 Mortgage Schedule..............................................
Section 2.5 Examination of Mortgage Files..................................
Section 2.6 Representations, Warranties and Agreements of the
Company........................................................
Section 2.7 Representation, Warranties and Agreement of Purchaser..........
Section 2.8 Closing........................................................
Section 2.9 Closing Documents..............................................
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.1 Company Representations and Warranties.........................
Section 3.2 Representations and Warranties Regarding Individual
Mortgage Loans.................................................
Section 3.3 Repurchase.....................................................
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.1 Company to Act as Servicer.....................................
Section 4.2 Liquidation of Mortgage Loans..................................
Section 4.3 Collection of Mortgage Loan Payments...........................
Section 4.4 Establishment of and Deposits to Custodial Account.............
Section 4.5 Permitted Withdrawals From Custodial Account...................
Section 4.6 Establishment of and Deposits to Escrow Account................
Section 4.7 Permitted Withdrawals From Escrow Account......................
Section 4.8 Payment of Taxes, Insurance and Other Charges..................
Section 4.9 Protection of Accounts.........................................
Section 4.10 Maintenance of Hazard Insurance ..............................
Section 4.11 Maintenance of Primary Mortgage Insurance Policy; Claims .....
Section 4.12 Maintenance of Mortgage Impairment Insurance .................
Section 4.13 Maintenance of Fidelity Bond and Errors
and Omissions Insurance ....................................
Section 4.14 Inspections ..................................................
Section 4.15 Restoration of Mortgaged Property ............................
Section 4.16 Claims .......................................................
Section 4.17 Title, Management and Disposition of REO Property ............
Section 4.18 Real Estate Owned Reports ....................................
Section 4.19 Liquidation Reports ..........................................
Section 4.20 Reports of Foreclosures and
Abandonments of Mortgaged Property .........................
Section 4.21 Fair Credit Reporting Act ....................................
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.1 Remittances....................................................
Section 5.2 Statements to Purchaser........................................
Section 5.3 Monthly Advances by Company....................................
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.1 Transfers of Mortgaged Property................................
Section 6.2 Satisfaction of Mortgages and Release of Mortgage
Files..........................................................
Section 6.3 Servicing Compensation.........................................
Section 6.4 Annual Statement as to Compliance..............................
Section 6.5 Annual Independent Public Accountants' Servicing
Report.........................................................
Section 6.6 Right to Examine Company Records...............................
Section 6.7 Compliance with REMIC Provisions...............................
ARTICLE VII
COMPANY TO COOPERATE
Section 7.1 Provision of Information.......................................
Section 7.2 Financial Statements; Servicing Facility.......................
ARTICLE VIII
THE COMPANY
Section 8.1 Indemnification; Third Party Claims............................
Section 8.2 Merger or Consolidation of the Company.........................
Section 8.3 Limitation on Liability of Company and Others..................
Section 8.4 Limitation on Resignation and Assignment by Company............
ARTICLE IX
PASS-THROUGH TRANSFER
Section 9.1 Removal of Mortgage Loans from Inclusion Under this
Agreement Upon a Pass-Through Transfer.......................
ARTICLE X
DEFAULT
Section 10.1 Events of Default ............................................
Section 10.2 Waiver of Defaults ...........................................
ARTICLE XI
TERMINATION
Section 11.1 Termination ..................................................
Section 11.2 Termination Without Cause ....................................
Section 11.3 Termination With Cause .......................................
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.1 Successor to Company .........................................
Section 12.2 Amendment ....................................................
Section 12.3 Governing Law ................................................
Section 12.4 Duration of Agreement ........................................
Section 12.5 Notices ......................................................
Section 12.6 Relationship of Parties ......................................
Section 12.7 Execution; Successors and Assigns ............................
Section 12.8 Recordation of Assignments of Mortgage .......................
Section 12.9 Assignment by Purchaser ......................................
Section 12.10 Solicitation of Mortgagor ...................................
EXHIBITS
Exhibit A Form of Assignment and Conveyance Agreement
Exhibit A-1 Data File Elements
Exhibit B Contents of Each Mortgage Loan File
Exhibit C Form of Custodial Agreement
Exhibit D Form of Opinion of Counsel
Exhibit E Items to Be Included in Monthly Remittance Advice
Exhibit F Form of Assignment and Assumption Agreement
Exhibit G Form of Seller's Officer's Certificate
Exhibit H Form of Annual Certification
This is a Master Seller's Warranties and Servicing Agreement for fixed
rate and adjustable rate residential first mortgage loans, dated and effective
as of August 1, 2004, and is executed between ▇▇▇▇▇▇▇ Sachs Mortgage Company, as
purchaser (the "Purchaser"), and ▇▇▇▇▇ Fargo Bank, N.A., as seller and servicer
(the "Company").
W I T N E S S E T H
WHEREAS, the Purchaser desires to purchase from time to time from the
Company and the Company desires to sell from time to time to the Purchaser
certain first-lien, fixed rate and adjustable rate residential mortgage loans
(the "Mortgage Loans") which shall be delivered in pools of whole loans (each, a
"Mortgage Loan Package") on various dates as provided herein (each, a "Closing
Date");
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of
trust or other security instrument creating a first lien on a one-to-four family
residential dwelling located in the jurisdiction indicated on the Mortgage Loan
Schedule for the related Mortgage Loan; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the conveyance, servicing and control of the
Mortgage Loans;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the Purchaser and the Company agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used herein, the following words and phrases, unless the content
otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
customary mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan purchased
pursuant to this Agreement.
Agreement: This Seller's Warranties and Servicing Agreement and all
exhibits hereto, amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Applicable Law: All provisions of statutes, rules and regulations,
interpretations and orders of governmental bodies or regulatory agencies
applicable to a Person, and all orders and decrees of all courts and arbitrators
in proceedings or actions in which the Person in question is a party.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i) the
value set forth on the appraisal made in connection with the origination of the
related Mortgage Loan as the value of the related Mortgage Property, or (ii) the
purchase price paid for the Mortgage Property, provided, however, in the case of
a refinanced Mortgage Loan, such value shall be based solely on the appraisal
made in connection with the refinance of such Mortgage Loan.
Assignment of Mortgage or Assignment: An assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form, sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to reflect the sale of the Mortgage to the Purchaser or its designated assignee,
of if the related Mortgage has been recorded in the name of MERS or its
designee, such actions as are necessary to cause the Purchaser to be shown as
the owner of the related Mortgage on the records of MERS for purposes of the
system of recording transfers of beneficial ownership of mortgages maintained by
MERS.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking and savings and loan institutions in the states where the
parties are located are authorized or obligated by law or executive order to be
closed.
Closing Date: The date or dates on which the Purchaser from time to time
shall purchase and the Company from time to time shall sell the Mortgage Loans
listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Code: The Internal Revenue Code of 1986, as it may be amended from time to
time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
Company: ▇▇▇▇▇ Fargo Bank, N.A., or its successor in interest or assigns,
or any successor to the Company under this Agreement appointed as herein
provided.
Company Certification: The certification delivered by the Company in a
form substantially similar to Exhibit H of this Agreement.
Company Employees: The meaning assigned to such term in Section 4.13.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage Loan
purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to the
Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.6, Appendix
E, as revised from time to time and in effect on each related Closing Date.
Custodial Account: The separate account or accounts created and maintained
pursuant to Section 4.4.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents if applicable, a form of which is annexed hereto as
Exhibit C.
Custodial Mortgage File: The items pertaining to a particular Mortgage
Loan referred to in items (1), (2), (3) and (4) of Exhibit B annexed hereto, and
any additional documents required to be added to the Custodial Mortgage File
pursuant to this Agreement that have been delivered to the Custodian as of the
related Closing Date.
Custodian: The custodian under the Custodial Agreement, or its successor
in interest or assigns, or any successor to the Custodian under the Custodial
Agreement as provided therein.
Cut-off Date: The date or dates designated as such on the related Mortgage
Loan Schedule with respect to the related Mortgage Loan Package.
Data File: The electronic data file prepared by Company and delivered to
the Purchaser including the data fields set forth on Exhibit A-1 with respect to
each Mortgage Loan.
Determination Date: The day preceding the Remittance Date, or if such day
is not a Business Day, the preceding Business Day.
Due Date: The first day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month preceding the month in which such Remittance Date
occurs and ending on (and including) the first day of the month in which such
Remittance Date occurs.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.6.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other related
document.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 10.1.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇, and its successors.
FDIC: The Federal Deposit Insurance Corporation, and its successors.
Fidelity Bond: A fidelity bond to be maintained by the Company pursuant to
Section 4.12.
First Remittance Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac, and its successors.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased pursuant to
this Agreement.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which amount is
added to the Index in accordance with the terms of the related Mortgage Note to
determine on each Interest Rate Adjustment Date the Mortgage Interest Rate for
such Mortgage Loan.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan under
the Home Ownership and Equity Protection Act of 1994, (b) a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002), "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law or (c) a Mortgage Loan
categorized as "High Cost" pursuant to the Standard & Poor's Glossary for File
Format for LEVELS(R) Version 5.6, Appendix E, as revised from time to time and
in effect on each related Closing Date.
Home Loan: A Mortgage Loan categorized as "Home Loan" pursuant to the
Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.6, Appendix
E, as revised from time to time and in effect on each related Closing Date.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate per
annum set forth in the related loan documents.
Interim Funder: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the interim funder pursuant to the MERS
Procedures Manual.
Insurance Proceeds: Proceeds of any mortgage insurance, title policy,
hazard policy or other insurance policy covering a Mortgage Loan, if any, to the
extent such proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with the
procedures that the Company would follow in servicing mortgage loans held for
its own account.
Interest Only Mortgage Loan: A Mortgage Loan for which an interest-only
payment feature is allowed during the period prior to the first Interest Rate
Adjustment Date.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Investor: With respect to each MERS Mortgage Loan, the Person named on the
MERS System as the investor pursuant to the MERS Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Liquidation Proceeds: Cash (other than Insurance Proceeds or Condemnation
Proceeds) received in connection with the liquidation of a defaulted Mortgage
Loan, whether through the sale or assignment of such Mortgage Loan, trustee's
sale, foreclosure sale, sale of REO Property, or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio of the
original loan amount of the Mortgage Loan at its origination or refinancing, as
applicable, to the Appraised Value of the Mortgaged Property.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be amended,
supplemented or otherwise modified from time to time.
MERS System: The system of recording transfers of mortgages electronically
maintained by MERS.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Advance: The portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the Determination
Date required to be advanced by the Company pursuant to Section 5.3 on the
Business Day immediately preceding the Remittance Date of the related month.
Monthly Payment: The scheduled monthly payment of principal and interest,
or in the case of an Interest Only Mortgage Loan, payments of interest on a
Mortgage Loan.
Monthly Remittance Advice: The meaning assigned to such term in Section
5.2.
Mortgage: The mortgage, deed of trust or other instrument and riders
thereto securing a Mortgage Note, which creates a first lien on an
unsubordinated estate in fee simple in real property securing the Mortgage Note.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note in accordance with the provisions of the Mortgage Note.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate Mortgage
Loan, the limit on each Mortgage Interest Rate adjustment as set forth in the
related Mortgage Note.
Mortgage Loan: An individual mortgage loan which is the subject of this
Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the related Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Retained Mortgage File, the Custodial Mortgage
File, the Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds and all
other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan.
Mortgage Loan Documents: With respect to a Mortgage Loan, the original
related Mortgage Note with applicable addenda and riders, the original related
security instrument and the originals of any required addenda and riders, the
original related Assignment and any original intervening related Assignments,
the original related title insurance policy, and the related appraisal report.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Company from time to time on each Closing
Date.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to the
Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: A schedule of Mortgage Loans included in each
Mortgage Loan Package, such schedule setting forth the following information
with respect to each Mortgage Loan: (1) the Company's Mortgage Loan number; (2)
the address, city, state and zip code of the Mortgaged Property; (3) a code
indicating whether the Mortgaged Property is a single family residence,
two-family residence, three-family residence, four-family residence, planned
unit development; (4) the Gross Margin; (5) the current Mortgage Interest Rate;
(6) the Servicing Fee Rate; (7) the current Monthly Payment; (8) the original
term to maturity; (9) the scheduled maturity date (and, if different, the stated
maturity date indicated on the Mortgage Note on its date of origination); (10)
the principal balance of the Mortgage Loan as of the related Cut-off Date after
deduction of payments of principal due on or before the related Cut-off Date
whether or not collected; (11) the Loan-to-Value Ratio; (12) the Interest Rate
Adjustment Date; (13) the Lifetime Rate Cap under the terms of the Mortgage
Note; (14) whether the Mortgage Loan is convertible or not; (15) a code
indicating the mortgage guaranty insurance company and (16) a field indicating
whether the Mortgage Loan is a Home Loan.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage and riders thereto.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President, a Vice President, an Assistant
Vice President, the Treasurer, the Secretary or one of the Assistant Treasurers
or Assistant Secretaries of the Company, and delivered to the Purchaser as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Company, reasonably acceptable to the Purchaser.
Pass-Through Transfer: The sale or transfer of some or all of the Mortgage
Loans by the Purchaser to a trust to be formed as part of a publicly issued or
privately placed mortgage-backed securities transaction.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth on the Mortgage Loan Schedule.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage Loan,
the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may decrease on an Interest
Rate Adjustment Date below the Mortgage Interest Rate previously in effect. The
Periodic Rate Floor for each Adjustable Rate Mortgage Loan is the rate set forth
on the Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Primary Mortgage Insurance Policy: Each policy of primary mortgage
insurance represented to be in effect pursuant to Section 3.2(xxxii), or any
replacement policy therefor obtained by the Servicer pursuant to Section 4.8.
Prime Rate: The prime rate announced to be in effect from time to time, as
published as the average rate in The Wall Street Journal.
Principal Balance: As to each Mortgage Loan, (i) the actual outstanding
principal balance of the Mortgage Loan at the related Cut-off Date after giving
effect to payments of principal due on or before such date, whether or not
received, minus (ii) all amounts attributable to principal collected from or on
behalf of the Mortgagor, including the principal portion of Liquidation
Proceeds, Condemnation Proceeds, and Insurance Proceeds.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any prepayment penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Principal Prepayment Period: With respect to each Remittance Date, the
period commencing on the first day of the month preceding the month in which
such Remittance Date occurs, and ending on the last day of such month.
Purchase Price: The purchase price for a Mortgage Loan Package specified
in the related Purchase Price and Terms Letter.
Purchase Price and Terms Letter: Those certain agreements setting forth
the general terms and conditions of the transaction consummated herein and
identifying the Mortgage Loans to be purchased from time to time hereunder,
between the Company and the Purchaser.
Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, or its successor in interest or
any successor to the Purchaser under this Agreement as herein provided.
Qualification Defect: With respect to a Mortgage Loan, (a) a defective
document in the Retained Mortgage File or Custodial Mortgage File, (b) the
absence of a document in the Retained Mortgage File or Custodial Mortgage File,
or (c) the breach of any representation, warranty or covenant with respect to
the Mortgage Loan made by the Company, but, in each case, only if the affected
Mortgage Loan would cease to qualify as a "qualified mortgage" for purposes of
the REMIC Provisions.
Qualified Depository: A federal or state chartered depository institution,
the deposits in which are insured by the FDIC to the applicable limits and the
short-term unsecured debt obligations of which (or, in the case of a depository
institution that is a subsidiary of a holding company, the short-term unsecured
debt obligations of such holding company) are rated A-1 by Standard & Poor's
Ratings Group and Prime-1 by ▇▇▇▇▇'▇ Investors Service, Inc. (or a comparable
rating if another rating agency is specified by the Purchaser by written notice
to the Company) at the time any deposits are held on deposit therein; provided
however, that in the event any of the Mortgage Loans are subject to a
Pass-Through Transfer, the Company agrees that the holding company or other
entity which maintains any accounts subject to this definition, shall satisfy
the rating requirements established by any Rating Agency which rates securities
issued as part of the Pass-Through Transfer.
Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by ▇▇▇▇▇▇ ▇▇▇.
Rating Agency: ▇▇▇▇▇'▇ Investors Service, Inc., Standard & Poor's Ratings
Group, division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Fitch, Inc (doing business as
"Fitch Ratings"), or any other nationally recognized statistical credit rating
agency rating any security issued in connection with any Pass-Through Transfer.
Rating Agency Delivery Event: The meaning specified in Section 9.1(h) of
this Agreement.
Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement shall be reconstituted as part of a Pass-Through
Transfer or Whole Loan Transfer pursuant to Section 9.1 hereof. The
Reconstitution Date shall be such date the Purchaser shall designate in writing
to the Company.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Advice Date: The 10th Business Day of each month.
Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately preceding such date) of any month, beginning
with the First Remittance Date.
REO Disposition: The final sale by the Company of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on behalf of
the Purchaser through foreclosure or by deed in lieu of foreclosure, as
described in Section 4.16.
Repurchase Price: Unless agreed otherwise by the Purchaser and the Company
(including without limitation as set forth in the related Purchase Price and
Terms Letter), a price equal to (i) the Scheduled Principal Balance of the
Mortgage Loan plus (ii) interest on such Scheduled Principal Balance at the
Mortgage Loan Remittance Rate from the date on which interest has last been paid
and distributed to the Purchaser to the last day of the month of repurchase less
amounts received or advanced in respect of such repurchased Mortgage Loan which
are being held in the Custodial Account for distribution in the month of
repurchase, to the extent such amounts are actually paid to the Purchaser upon
the repurchase of the related Mortgage Loan, plus (iii) any costs and damages,
including reasonable attorneys' fees and costs, incurred by the trust in the
applicable Pass-Through Transfer in connection with any violation by the
Mortgage Loan of any predatory or abusive lending law.
Retained Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in items (5), (6), (7) and (8) of Exhibit B annexed hereto, and any
additional documents required to be added to the Retained Mortgage File pursuant
to this Agreement, which items are retained in the possession of the Company.
Scheduled Principal Balance: As to each Mortgage Loan and as of any date
of determination, (i) the principal balance of the Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, whether or not received, minus (ii) all amounts previously collected by
the Company as servicer hereunder or advanced and distributed to the Purchaser
with respect to the related Mortgage Loan representing payments or recoveries of
principal or advances made in lieu thereof.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorney's fees and disbursements) incurred in the performance by the Company of
its servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of any REO Property and (d) compliance with the obligations
under Section 4.8.
Servicing Fee: With respect to each Mortgage Loan, the amount of the per
annum fee the Purchaser shall pay to the Company, which shall, for a period of
one full month, be equal to one-twelfth of the product of (a) the Servicing Fee
Rate and (b) the Scheduled Principal Balance of such Mortgage Loan. Such fee
shall be payable monthly, computed on the basis of the same principal amount and
same period for which any related interest payment on a Mortgage Loan is
computed. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to the
extent permitted by Section 4.5) of such Monthly Payment collected by the
Company, or as otherwise provided under Section 4.5.
Servicing Fee Rate: With respect to any Mortgage Loan, the rate per annum
set forth in the related Purchase Price and Terms Letter.
Servicing File: With respect to each Mortgage Loan, the file retained by
the Company consisting of originals of all documents in the Retained Mortgage
File which are not delivered to the Custodian and copies of the Mortgage Loan
Documents listed in the Custodial Agreement the originals of which are delivered
to the Custodian pursuant to Section 2.3.
Servicing Officer: Any officer of the Company involved in or responsible
for the administration and servicing of the Mortgage Loans whose name appears on
a list of servicing officers furnished by the Company to the Purchaser upon
request, as such list may from time to time be amended.
Time$aver(R) Mortgage Loan: A Mortgage Loan which has been refinanced
pursuant to a Company program that allows a rate/term refinance of an existing
Company-serviced loan with minimal documentation.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans by the Purchaser to a third party, which sale or transfer is not a
Pass-Through Transfer.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND
RECORDS; DELIVERY OF DOCUMENTS
Section 2.1 Conveyance of Mortgage Loans; Possession of Mortgage Files;
Maintenance of Servicing Files.
The Company, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit A (the "Assignment and
Conveyance Agreement").
The Company, simultaneously with the execution and delivery of each
Assignment and Conveyance Agreement, shall sell, transfer, assign, set over and
convey to the Purchaser, without recourse, but subject to the terms of this
Agreement, all the right, title and interest of the Company in and to the
Mortgage Loans, including all interest and principal received by the Company on
or with respect to the related Mortgage Loans after the related Cut-off Date
(and including Monthly Payments due after the related Cut-off Date but received
by the Company on or before the related Cut-off Date, but not including payments
of principal and interest due on the Mortgage Loans on or before the related
Cut-off Date).
The principal balance of each Mortgage Loan as of the related Cut-off Date
shall be determined after application of payments of principal due on or before
the related Cut-off Date whether or not collected. Therefore, payments of
scheduled principal and interest prepaid for a Due Date beyond the related
Cut-off Date shall not be applied to the principal balance as of the related
Cut-off Date. Such prepaid amounts (minus interest at the Servicing Fee Rate)
shall be the property of the Purchaser. The Company shall deposit any such
prepaid amounts into the Custodial Account, which account is established for the
benefit of the Purchaser for subsequent remittance by the Company to the
Purchaser, and shall remit such amounts as provided in Section 5.1.
With respect to each Closing Date and pursuant to Section 2.3, the Company
shall deliver the Custodial Mortgage File to the Custodian. The Retained
Mortgage File for each Mortgage Loan shall be held in trust by the Company for
the benefit of the Purchaser as the owner thereof. Additionally and separate to
the Retained Mortgage File, the Company shall maintain a Servicing File
consisting of a copy of the contents of the Custodial Mortgage File and the
Retained Mortgage File. The possession of each Retained Mortgage File by the
Company shall be at the will of the Purchaser, and such retention and possession
by the Company shall be in a custodial capacity only. The possession of each
Servicing File by the Company shall be at the will of the Purchaser for the sole
purpose of servicing the related Mortgage Loan, and such retention and
possession by the Company shall be in a custodial capacity only. Upon the sale
of the Mortgage Loans the ownership of each Mortgage Note, the related Mortgage
and the related Custodial Mortgage File, Retained Mortgage File and Servicing
File shall vest immediately in the Purchaser, and the ownership of all records
and documents with respect to the related Mortgage Loan prepared by or which
come into the possession of the Company shall vest immediately in the Purchaser
and shall be retained and maintained by the Company, in trust, at the will of
the Purchaser and only in such custodial capacity. The Company shall release its
custody of the contents of any Retained Mortgage File and Servicing File only in
accordance with written instructions from the Purchaser, unless such release is
required as incidental to the Company's servicing of the Mortgage Loans, in the
case of the Servicing File, or is in connection with a repurchase of any
Mortgage Loan pursuant to Sections 2.03, 3.3 or 6.2.
In addition, in connection with the assignment of any MERS Mortgage Loan,
the Company agrees that it will cause, at its own expense, the MERS(R) System to
indicate that such Mortgage Loans have been assigned by the Company to the
Purchaser in accordance with this Agreement by including (or deleting, in the
case of Mortgage Loans which are repurchased in accordance with this Agreement)
in such computer files the information required by the MERS(R) System to
identify the Purchaser of such Mortgage Loans. Prior to the assignment of any
MERS Mortgage Loan, the Purchaser will provide the Company with Purchaser's MERS
registration number. The Company further agrees that it will not alter the
information referenced in this paragraph with respect to any Mortgage Loan
during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement.
Section 2.2 Books and Records; Transfers of Mortgage Loans.
From and after the sale of the Mortgage Loans to the Purchaser all rights
arising out of the Mortgage Loans including but not limited to all funds
received on or in connection with the Mortgage Loans, shall be received and held
by the Company in trust for the benefit of the Purchaser as owner of the
Mortgage Loans, and the Company shall retain record title to the related
Mortgages for the sole purpose of facilitating the servicing and the supervision
of the servicing of the Mortgage Loans.
The sale of each Mortgage Loan shall be reflected on the Company's balance
sheet and other financial statements as a sale of assets by the Company. The
Company shall be responsible for maintaining, and shall maintain, a complete set
of books and records for each Mortgage Loan which shall be marked clearly to
reflect the ownership of each Mortgage Loan by the Purchaser. In particular, the
Company shall maintain in its possession, available for inspection by the
Purchaser, or its designee, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the Flood Disaster Protection Act of 1973, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, and records of periodic inspections as required by Section 4.13. To the
extent that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Company
may be in the form of microfilm or microfiche or such other reliable means of
recreating original documents, including but not limited to, optical imagery
techniques so long as the Company complies with the requirements of the ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac Selling and Servicing Guide, as amended from time to time.
The Company shall maintain with respect to each Mortgage Loan and shall
make available for inspection by any Purchaser or its designee the related
Servicing File during the time the Purchaser retains ownership of a Mortgage
Loan and thereafter in accordance with Applicable Law.
The Company shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Company shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms hereof. For the purposes of
this Agreement, the Company shall be under no obligation to deal with any Person
with respect to this Agreement or the Mortgage Loans unless the books and
records show such Person as the owner of the Mortgage Loan. The Purchaser may,
subject to the terms of this Agreement, sell and transfer one or more of the
Mortgage Loans. The Purchaser also shall advise the Company of the transfer.
Upon receipt of notice of the transfer, the Company shall ▇▇▇▇ its books and
records to reflect the ownership of the Mortgage Loans of such assignee, and
shall release the previous Purchaser from its obligations hereunder with respect
to the Mortgage Loans sold or transferred. Such notification of a transfer shall
include a final loan schedule which shall be received by the Company no fewer
than five (5) Business Days before the monthly Determination Date. If such
notification is not received as specified above, the Company's duties to remit
and report to the new purchaser(s) as required by Section 5 shall begin with the
first Determination Date after the Reconstitution Date.
Section 2.3 Delivery of Documents.
Pursuant to the Custodial Agreement delivered to the Purchaser prior to or
contemporaneously with the delivery of this Agreement, the Company shall deliver
and release to the Custodian those Mortgage Loan Documents as required by the
Custodial Agreement and by this Agreement with respect to each Mortgage Loan.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement. The
Company will be responsible for the Custodian's fees and expenses with respect
to the delivery and certification of those Mortgage Loan Documents required to
be delivered pursuant to the Custodial Agreement. The Company will be
responsible for the fees and expenses related to the recording of the initial
Assignments of Mortgage (including any fees and expenses related to any
preparation and recording of any intervening or prior assignments of the
Mortgage Loans to the Company or to any prior owners of or mortgagees with
respect to the Mortgage Loans). The Purchaser will be responsible for the
Custodian's fees and expenses with respect to the initial inventory and
maintenance of the Mortgage Loans on or after the related Closing Date,
including the costs associated with clearing exceptions.
Within 180 days after the related Closing Date, the Company shall deliver
to the Custodian each of the documents described in Exhibit B not delivered
pursuant to the Agreement. Upon the occurrence of the events described in
Section 9.1(h), Section 11.2 or Section 11.3 of this Agreement or in the event
the Company fails to allow the Purchaser access to the Retained Mortgage File as
required pursuant to Section 2.5 (each such occurrence, a "Delivery Event"), the
Company shall deliver to the Custodian the additional documents required to be
delivered pursuant to the Custodial Agreement within the time period specified
therein. All of the provisions of this Section 2.3 relating to a failure to
deliver required documentation, delays in such delivery and the delivery of
defective documentation shall apply equally to any obligation on the part of the
Company to deliver documents which arises after the related Closing Date upon
the occurrence of a Delivery Event.
The Company shall pay all initial recording fees for the Assignments of
Mortgage and any other fees in connection with the transfer of all original
documents to the Purchaser or its designee. The Company shall prepare, in
recordable form, all Assignments of Mortgage necessary to assign the Mortgage
Loans to the Purchaser, or its designee. The Company shall be responsible for
recording the Assignments of Mortgage.
The Company shall forward to the Custodian original documents evidencing
an assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.1 or 6.1 within one week of their
execution, provided, however, that the Company shall provide the Custodian with
a certified true copy of any such document submitted for recordation within ten
(10) days of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within 60 days of its submission for recordation.
In the event the public recording office is delayed in returning any
original document, which the Company is required to deliver at any time to the
Custodian in accordance with the terms of the Custodial Agreement or which the
Company is required to maintain in the Retained Mortgage File, the Company shall
deliver to the Custodian or to the Retained Mortgage File, as applicable, within
240 days of its submission for recordation, a copy of such document and an
Officer's Certificate, which shall (i) identify the recorded document; (ii)
state that the recorded document has not been delivered to the Custodian due
solely to a delay by the public recording office, (iii) state the amount of time
generally required by the applicable recording office to record and return a
document submitted for recordation, and (iv) specify the date the applicable
recorded document will be delivered to the Custodian. The Company will be
required to deliver the document to the Custodian by the date specified in (iv)
above. An extension of the date specified in (iv) above may be requested from
the Purchaser, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, if the originals or certified copies
required in this Section 2.3 are not delivered as required within 180 days
following the related Closing Date or as otherwise extended as set forth above,
or within the designated time period, following any date subsequent to the
related Closing Date as of which the Company becomes obligated to deliver
additional documents from its Retained Mortgage File pursuant to the Custodial
Agreement, the related Mortgage Loan shall, upon request of the Purchaser, be
repurchased by the Company in accordance with Section 3.3 hereof; provided,
however, that the foregoing repurchase obligation shall not apply in the event
the Company cannot deliver such items due to a delay caused by the recording
office in the applicable jurisdiction; provided that the Company shall deliver
instead a recording receipt of such recording office or, if such recording
receipt is not available, an Officer's Certificate from the Company confirming
that such documents have been accepted for recording. Any such document shall be
delivered to the Purchaser or its designee promptly upon receipt thereof from
the related recording office.
If the Company, the Purchaser or the Custodian finds any document or
documents constituting a part of a Retained Mortgage File or the Custodial
Mortgage File pertaining to a Mortgage Loan to be defective (or missing) in any
material respect (regardless of whether the Company was required to deliver such
document(s) to the Custodian pursuant to this Agreement or whether such
document(s) were to remain in the possession of the Company), and such defect or
missing document materially and adversely affects the value of the related
Mortgage Loan or the interests of the Purchaser therein, the party discovering
such defect shall promptly so notify the Company. The Company shall have a
period of 90 days after receipt of such written notice within which to correct
or cure any such defect. The Company hereby covenants and agrees that, if any
material defect cannot be corrected or cured, the Company will, upon the
expiration of the applicable cure period described above, repurchase the related
Mortgage Loan in the manner set forth in Section 3.3; provided, however, that
with respect to any Mortgage Loan, if such defect constitutes a Qualification
Defect, any such repurchase must take place within 75 days of the date such
defect is discovered.
Notwithstanding the foregoing, with respect to a Mortgage Loan, if, at the
end of such 90-day period, the Company delivers an Officer's Certificate to the
Purchaser certifying that the Company is using good faith efforts to correct or
cure such defect and identifying progress made, then the Purchaser shall grant
the Company an extension to correct or cure such defect. The extension shall not
extend beyond (1) the date that is 75 days after the date the defect is
discovered, or, (2) if the defect is not a Qualification Defect (as evidenced by
an Opinion of Counsel), the date that is 30 days beyond the original 90-day cure
period. If the defect is not a Qualification Defect, additional 30-day
extensions may be obtained pursuant to the same procedure, as long as the
Company demonstrates continued progress toward a correction or cure; provided
that no extension shall be granted beyond 180 days from the date on which the
Company received the original notice of the defect.
Notwithstanding the foregoing, with respect to a Mortgage Loan, the
failure of the Purchaser to notify the Company of any defective or missing
document in either the Retained Mortgage File or Custodial Mortgage File within
such 90-day period, or the failure of the Purchaser to require the Company to
cure or repurchase the related Mortgage Loan upon expiration of such 90-day
period, shall not constitute a waiver of its rights hereunder, including the
rights with respect to a Mortgage Loan, to require the Company to repurchase the
affected Mortgage Loan and the right to indemnification pursuant to Section 3.3
hereof.
Section 2.4 Mortgage Schedule.
The Company shall provide the Purchaser with certain information
constituting a listing of the Mortgage Loans, in each Mortgage Loan Package, to
be purchased under this Agreement (the "Mortgage Loan Schedule"). The Mortgage
Loan Schedule shall conform to the definition of "Mortgage Loan Schedule"
hereunder.
Section 2.5 Examination of Mortgage Files.
Prior to the related Closing Date, the Company shall (a) deliver to the
Purchaser in escrow, for examination, the Custodial Mortgage File for each
Mortgage Loan, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the Mortgage Files available to the Purchaser
for examination at the Company's offices or such other location as shall
otherwise be agreed upon by the Purchaser and the Company. Such examination may
be made by the Purchaser or by any prospective purchaser of the Mortgage Loans
from the Purchaser, at any time before or after the related Closing Date upon
prior reasonable notice to the Company. The fact that the Purchaser or any
prospective purchaser of the Mortgage Loans has conducted or has failed to
conduct any partial or complete examination of the Custodial Mortgage Files
shall not affect the Purchaser's (or any of its successor's) rights to demand
repurchase, substitution or other relief as provided under this Agreement.
The Company shall make the Retained Mortgage Files available to the
Purchaser for examination at the Company's offices or such other location as
shall otherwise be agreed upon by the Purchaser and the Company. Such
examination may be made by the Purchaser or by any prospective purchaser of the
Mortgage Loans from the Purchaser, at any time before or after the related
Closing Date upon prior reasonable notice to the Company. The fact that the
Purchaser or any prospective purchaser of the Mortgage Loans has conducted or
has failed to conduct any partial or complete examination of the Retained
Mortgage Files shall not affect the Purchaser's (or any of its successor's)
rights to demand repurchase, substitution or other relief as provided under this
Agreement.
Section 2.6 Representations, Warranties and Agreements of the Company.
The Company agrees and acknowledges that it shall, as a condition to the
consummation of the transactions contemplated hereby, make the representations
and warranties specified in Sections 3.1 and 3.2 as of the related Closing Date.
The Company, without conceding that the Mortgage Loans are securities, hereby
makes the following additional representations, warranties and agreements which
shall be deemed to have been made as of the related Closing Date: Neither the
Company nor anyone acting on its behalf has offered, transferred, pledged, sold
or otherwise disposed of any Mortgage Loans, any interest in any Mortgage Loans
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of any Mortgage Loans, any interest in any
Mortgage Loans or any other similar security from, or otherwise approached or
negotiated with respect to any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933, as amended (the "1933 Act") or which
would render the disposition of any Mortgage Loans a violation of Section 5 of
the 1933 Act or require registration pursuant thereto, nor will it act, nor has
it authorized or will it authorize any person to act, in such manner with
respect to the Mortgage Loans.
Section 2.7 Representation, Warranties and Agreement of Purchaser.
The Purchaser, without conceding that the Mortgage Loans are securities,
hereby makes the following representations, warranties and agreements, which
shall have been deemed to have been made as of the related Closing Date.
(i) the Purchaser understands that the Mortgage Loans have not been
registered under the 1933 Act or the securities laws of any state;
(ii) the Purchaser is acquiring the Mortgage Loans for its own
account only and not for any other person; and
(iii) the Purchaser considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Mortgage Loans.
Section 2.8 Closing.
The closing for the purchase and sale of the Mortgage Loans shall take
place on the related Closing Date. At the Purchaser's option, each Closing shall
be either: by telephone, confirmed by letter or wire as the parties shall agree;
or conducted in person, at such place as the parties shall agree.
The closing shall be subject to each of the following conditions:
(i) all of the representations and warranties of the Company under this
Agreement shall be true and correct as of the related Closing Date
and no event shall have occurred which, with notice or the passage
of time, would constitute a default under this Agreement;
(ii) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all Closing Documents as specified in
Section 2.9 of this Agreement, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by all signatories other
than the Purchaser as required pursuant to the respective terms
thereof;
(iii) the Company shall have delivered and released to the Custodian all
documents required pursuant to this Agreement and the Custodial
Agreement; and
(iv) all other terms and conditions of this Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Company on the related Closing Date the Purchase Price by wire transfer of
immediately available funds to the account designated by the Company.
Section 2.9 Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
(i) this Agreement (to be executed and delivered only for the initial
Closing Date);
(ii) with respect to the initial Closing Date, the Custodial Agreement,
dated as of the initial Cut-off Date;
(iii) the related Mortgage Loan Schedule, segregated by Mortgage Loan
Package, to be attached to the related Assignment and Conveyance as
the Mortgage Loan Schedule thereto;
(iv) a Custodian's Certification, as required under the Custodial
Agreement;
(v) an officer's certificate of the Company substantially in the form of
Exhibit F attached hereto (with respect to the initial Closing
Date);
(vi) an Opinion of Counsel of the Company, in the form of Exhibit D
hereto (with respect to the initial Closing Date); and
(vii) Assignment and Conveyance Agreement in the form of Exhibit A hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.1 Company Representations and Warranties.
The Company hereby represents and warrants to the Purchaser that, as of
the related Closing Date:
(i) Due Organization and Authority.
The Company is a national banking association duly organized, validly
existing and in good standing under the laws of the United States and has
all licenses necessary to carry on its business as now being conducted and
is licensed, qualified and in good standing in each state where a
Mortgaged Property is located if the laws of such state require licensing
or qualification in order to conduct business of the type conducted by the
Company, and in any event the Company is in compliance with the laws of
any such state to the extent necessary to ensure the enforceability of the
related Mortgage Loan and the servicing of such Mortgage Loan in
accordance with the terms of this Agreement; the Company has the full
power and authority to execute and deliver this Agreement and to perform
in accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Company and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Company;
and all requisite action has been taken by the Company to make this
Agreement valid and binding upon the Company in accordance with its terms;
(ii) Ordinary Course of Business.
The consummation of the transactions contemplated by this Agreement are in
the ordinary course of business of the Company, which is in the business
of selling and servicing loans, and the transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Company pursuant
to this Agreement are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction;
(iii) No Conflicts.
Neither the execution and delivery of this Agreement, the acquisition of
the Mortgage Loans by the Company, the sale of the Mortgage Loans to the
Purchaser or the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement will
conflict with or result in a breach of any of the terms, articles of
incorporation or by-laws or any legal restriction or any agreement or
instrument to which the Company is now a party or by which it is bound, or
constitute a default or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Company or its property
is subject, or impair the ability of the Purchaser to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans;
(iv) Ability to Service.
The Company is an approved seller/servicer of residential mortgage loans
for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, with the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans
of the same type as the Mortgage Loans. The Company is a HUD approved
mortgagee pursuant to Section 203 of the National Housing Act and is in
good standing to sell mortgage loans to and service mortgage loans for
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, and no event has occurred, including but not
limited to a change in insurance coverage, which would make the Company
unable to comply with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements
or which would require notification to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(v) Reasonable Servicing Fee.
The Company acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that the entire
Servicing Fee shall be treated by the Company, for accounting and tax
purposes, as compensation for the servicing and administration of the
Mortgage Loans pursuant to this Agreement;
(vi) Ability to Perform.
The Company does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in this
Agreement. The Company is solvent and the sale of the Mortgage Loans will
not cause the Company to become insolvent. The sale of the Mortgage Loans
is not undertaken to hinder, delay or defraud any of the Company's
creditors;
(vii) No Litigation Pending.
There is no action, suit, proceeding or investigation pending or
threatened against the Company which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Company, or
in any material impairment of the right or ability of the Company to carry
on its business substantially as now conducted, or in any material
liability on the part of the Company, or which would draw into question
the validity of this Agreement or the Mortgage Loans or of any action
taken or to be contemplated herein, or which would be likely to impair
materially the ability of the Company to perform under the terms of this
Agreement;
(viii) Selection Process
The Mortgage Loans were selected from among the outstanding adjustable
rate one to four family mortgage loans in the Company's mortgage banking
portfolio at the related Closing Date as to which the representations and
warranties in Section 3.2 could be made and such selection was not made in
a manner so as to affect adversely the interests of the Purchaser.
(ix) No Consent Required.
No consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by
the Company of or compliance by the Company with this Agreement or the
sale of the Mortgage Loans as evidenced by the consummation of the
transactions contemplated by this Agreement, or if required, such approval
has been obtained prior to the related Closing Date;
(x) No Untrue Information.
Neither this Agreement nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or in connection
with the transactions contemplated hereby contains any untrue statement of
fact or omits to state a fact necessary to make the statements contained
therein not misleading;
(xi) Sale Treatment.
The Company has determined that the disposition of the Mortgage Loans
pursuant to this Agreement will be afforded sale treatment for accounting
and tax purposes;
(xii) No Material Change.
There has been no material adverse change in the business, operations,
financial condition or assets of the Company since the date of the
Company's most recent financial statements;
(xiii) No Brokers' Fees.
The Company has not dealt with any broker, investment banker, agent or
other Person that may be entitled to any commission or compensation in the
connection with the sale of the Mortgage Loans; and
(xiv) MERS Status
The Company is a member of MERS in good standing.
Section 3.2 Representations and Warranties Regarding Individual Mortgage
Loans.
As to each Mortgage Loan, the Company hereby represents and warrants to
the Purchaser that as of the related Closing Date:
(i) Mortgage Loans as Described.
The information set forth in the Mortgage Loan Schedule and the
information contained on the electronic Data File is true and
correct;
(ii) Payment History.
All payments required to be made up to the Cutoff Date for each
Mortgage Loan under the terms of the Mortgage Note have been made
and credited. No payment under any Mortgage Loan has been 30 days
delinquent more than one time within twelve months prior to the
related Closing Date;
(iii) No Outstanding Charges.
There are no defaults by the Company in complying with the terms of
the Mortgage Note or Mortgage, and all taxes, governmental
assessments, insurance premiums, leasehold payments, water, sewer
and municipal charges, which previously became due and owing have
been paid, or an escrow of funds has been established for every such
item which remains unpaid and which has been assessed but is not yet
due and payable. The Company has not advanced funds, or induced or
solicited directly or indirectly, the payment of any amount required
under the Mortgage Loan, except for interest accruing from the date
of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is later, to the day which precedes by one month
the Due Date of the first installment of principal and interest;
(iv) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary to protect the
interests of the Purchaser, and which has been delivered to the
Purchaser. The substance of any such waiver, alteration or
modification has been approved by the mortgage insurer, if the
Mortgage Loan is insured, the title insurer, to the extent required
by the policy, and its terms are reflected on the Mortgage Loan
Schedule. No Mortgagor has been released, in whole or in part. No
Mortgage Loan has been modified so as to restructure the payment
obligations or re-age the Mortgage Loan;
(v) No Defenses.
The Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the
Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(vi) No Satisfaction of Mortgage.
The Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not
been released from the lien of the Mortgage, in whole or in part,
nor has any instrument been executed that would effect any such
satisfaction, release, cancellation, subordination or rescission;
(vii) Validity of Mortgage Documents.
The Mortgage Note and the Mortgage and any other agreement executed
and delivered by a Mortgagor in connection with a Mortgage Loan are
genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms (including,
without limitation, any provisions therein relating to prepayment
charges). All parties to the Mortgage Note and the Mortgage had
legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note and the Mortgage, and the Mortgage Note
and the Mortgage have been duly and properly executed by such
parties;
(viii) No Fraud.
No error, omission, misrepresentation, negligence, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the
part of the Company, the Mortgagor, or, to the best of the Company's
knowledge, any appraiser, any builder, or any developer, or any
other party involved in the origination of the Mortgage Loan or in
the application of any insurance in relation to such Mortgage Loan;
(ix) Compliance with Applicable Laws.
Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity, predatory and abusive lending or disclosure laws
applicable to the Mortgage Loan, including, without limitation, any
provisions relating to prepayment charges, have been complied with,
the consummation of the transactions contemplated hereby will not
involve the violation of any such laws or regulations, and the
Company shall maintain in its possession, available for the
Purchaser's inspection, and shall deliver to the Purchaser upon
demand, evidence of compliance with all such requirements. All
inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities;
(x) Location and Type of Mortgaged Property.
The Mortgaged Property is located in the state identified in the
related Mortgage Loan Schedule and consists of a single parcel (or
more than one contiguous parcels) of real property with a detached
single family residence erected thereon, or a two- to four-family
dwelling, or an individual condominium unit in a condominium
project, or an individual unit in a planned unit development or a
townhouse. If the Mortgaged Property is a condominium unit or a
planned unit development (other than a de minimis planned unit
development), such condominium, or planned unit development project
meets the Company's eligibility requirements as set forth in the
Company's underwriting guidelines. No Mortgage Loan is secured by
manufactured housing. As of the related appraisal date for each
Mortgaged Property, no portion of any Mortgaged Property has been
used for commercial purposes outside of the Company's underwriting
guidelines;
(xi) Valid First Lien.
The Mortgage is a valid, subsisting and enforceable first lien on
the Mortgaged Property, including all buildings on the Mortgaged
Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements made at
any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(a) the lien of current real property taxes and
assessments not yet due and payable;
(b) covenants, conditions and restrictions, rights of
way, easements and other matters of the public
record as of the date of recording acceptable to
mortgage lending institutions generally and
specifically referred to in the lender's title
insurance policy or attorney's title opinion
delivered to the originator of the Mortgage Loan
and (i) referred to or otherwise considered in the
appraisal made for the originator of the Mortgage
Loan and (ii) which do not adversely affect the
Appraised Value of the Mortgaged Property set
forth in such appraisal; and
(c) 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 the mortgage or the use, enjoyment,
value or marketability of the related Mortgaged
Property;
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting and enforceable first
lien and first priority security interest on the property described
therein and the Company has full right to sell and assign the same
to the Purchaser;
(xii) Full Disbursement of Proceeds.
The proceeds of the Mortgage Loan have been fully disbursed, except
for escrows established or created due to seasonal weather
conditions, and there is no requirement for future advances
thereunder. All costs, fees and expenses incurred in making or
closing the Mortgage Loan and the recording of the Mortgage were
paid, and the Mortgagor is not entitled to any refund of any amounts
paid or due under the Mortgage Note or Mortgage;
(xiii) Ownership.
The Company is the sole owner of record and holder of the Mortgage
Loan and the related Mortgage Note and the Mortgage are not assigned
or pledged, and the Company has good and marketable title thereto
and has full right and authority to transfer and sell the Mortgage
Loan to the Purchaser. The Company is transferring the Mortgage Loan
free and clear of any and all encumbrances, liens, pledges,
equities, participation interests, claims, charges or security
interests of any nature encumbering such Mortgage Loan;
(xiv) Origination/Doing Business.
The Mortgage Loan was originated by a savings and loan association,
a savings bank, a commercial bank, a credit union, an insurance
company, or similar institution which is supervised and examined by
a federal or state authority or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203
and 211 or the National Housing Act. All parties which have had any
interest in the Mortgage Loan, whether as mortgagee, assignee,
pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) (1) in compliance with any and
all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located, and any qualification
requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and (2) organized under
the laws of such state, or (3) qualified to do business in such
state, or (4) federal savings and loan associations or national
banks having principal offices in such state, or (5) not doing
business in such state;
(xv) Title Insurance.
The Mortgage Loan is covered by an ALTA lender's title insurance
policy or other generally acceptable form of policy of insurance
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a title insurer
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified to do business
in the jurisdiction where the Mortgaged Property is located,
insuring the Company, its successors and assigns, as to the first
priority lien of the Mortgage in the original principal amount of
the Mortgage Loan, subject only to the exceptions contained in
clauses (a), (b) and (c) of paragraph (xi) of this Section 3.02, and
against any loss by reason of the invalidity or unenforceability of
the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment;
provided, however, that in the case of any Mortgage Loan secured by
a Mortgaged Property located in a jurisdiction where such policies
are generally not available, the Mortgage Loan is the subject of an
opinion of counsel of the type customarily rendered in such
jurisdiction in lieu of title insurance. The Company is the sole
insured of such lender's title insurance policy, and such lender's
title insurance policy is in full force and effect and will be in
force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such
lender's title insurance policy, and no prior holder of the
Mortgage, including the Company, has done, by act or omission,
anything which would impair the coverage of such lender's title
insurance policy;
(xvi) No Mechanics' Liens.
There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding
that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage which are
not insured against by the title insurance policy referenced in
clause (xv) above;
(xvii) Location of Improvements; No Encroachments.
Except as insured against by the title insurance policy referenced
in clause (xv) above, all improvements which were considered in
determining the Appraised Value of the Mortgaged Property lay wholly
within the boundaries and building restriction lines of the
Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or
being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation;
(xviii) Customary Provisions.
The Mortgage and the related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of
the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage;
(xix) Occupancy of the Mortgaged Property.
As of the date of origination, the Mortgaged Property was lawfully
occupied under Applicable Law;
(xx) No Additional Collateral.
The Mortgage Note is not and has not been secured by any collateral,
pledged account or other security except the lien of the
corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to in (xi) above;
(xxi) Deeds of Trust.
In the event that the Mortgage constitutes a deed of trust, a
trustee, duly qualified under Applicable Law to serve as such, has
been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the
Mortgagee to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(xxii) Transfer of Mortgage Loans.
As to any Mortgage Loan which is not a MERS Mortgage Loan, the
Assignment of Mortgage is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged
Property is located;
(xxiii) Mortgaged Property Undamaged.
The Mortgaged Property is undamaged by waste, water, fire,
earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the
premises were intended;
(xxiv) Collection Practices; Escrow Deposits.
The origination and collection practices used with respect to the
Mortgage Loan have been in accordance with Acceptable Servicing
Practices, and have been in all material respects legal and proper,
and in accordance with the terms of the Mortgage Note and Mortgage.
All Escrow Payments have been collected in full compliance with
state and federal law. An escrow of funds is not prohibited by
Applicable Law and has been established to pay for every item that
remains unpaid and has been assessed but is not yet due and payable.
No escrow deposits or Escrow Payments or other charges or payments
due the Company have been capitalized under the Mortgage Note. All
Mortgage Interest Rate adjustments have been made in compliance with
state and federal law and the terms of the related Mortgage and
Mortgage Note on the related Interest Rate Adjustment Date;
(xxv) No Condemnation.
To the best of Company's knowledge, there is no proceeding pending
or threatened for the total or partial condemnation of the related
Mortgaged Property;
(xxvi) The Appraisal.
The Mortgage Loan Documents contain an appraisal of the related
Mortgaged Property, As to each Time$aver(R) Mortgage Loan, the
appraisal may be from the original of the existing Company-serviced
loan, which was refinanced via such Time$aver(R) Mortgage Loan. The
appraisal was conducted by an appraiser who had no interest, direct
or indirect, in the Mortgaged Property or in any loan made on the
security thereof; and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and the appraisal and
the appraiser both satisfy the applicable requirements of ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac;
(xxvii) Insurance.
The Mortgaged Property securing each Mortgage Loan is insured by an
insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac against loss by
fire, such hazards as are covered under a standard extended coverage
endorsement and such other hazards as are customary in the area
where the Mortgaged Property is located pursuant to insurance
policies conforming to the requirements of Section 4.10, in an
amount which is not less than the lesser of 100% of the insurable
value of the Mortgaged Property and the outstanding principal
balance of the Mortgage Loan, but in no event less than the minimum
amount necessary to fully compensate for any damage or loss on a
replacement cost basis; if the Mortgaged Property is a condominium
unit, it is included under the coverage afforded by a blanket policy
for the project; the insurance policy contains a standard clause
naming the originator of such mortgage loan, its successor and
assigns, as insured mortgagee; if upon origination of the Mortgage
Loan, the improvements on the Mortgaged Property were in an area
identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, a flood insurance
policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect with a generally
acceptable insurance carrier, in an amount representing coverage not
less than the least of (A) the outstanding principal balance of the
Mortgage Loan, (B) the full insurable value and (C) the maximum
amount of insurance which was available under the Flood Disaster
Protection Act of 1973, as amended. All individual insurance
policies contain a standard mortgagee clause naming the Company and
its successors and assigns as mortgagee and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at the Mortgagor's cost and expense, and
on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor's
cost and expense, and to seek reimbursement therefor from the
Mortgagor. The hazard insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be
in full force and effect and inure to the benefit of the Purchaser
upon the consummation of the transactions contemplated by this
Agreement and the Company has not acted or failed to act so as to
impair the coverage of any such insurance policy or the validity,
binding effect and enforceability thereof;
(xxviii) Servicemembers' Civil Relief Act.
The Mortgagor has not notified the Company, and the Company has no
knowledge of any relief requested or allowed to the Mortgagor under
the Servicemembers' Civil Relief Act, as amended;
(xxix) Payment Terms.
The Mortgage Note is payable on the first day of each month in
equal monthly installments of principal and interest, which
installments of interest are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated
maturity date, over an original term of not more than thirty years
from origination and once the amortization period starts, payments
are calculated to fully amortize by maturity. No Mortgage Loan has
a shared appreciation or other contingent interest feature, or
permits negative amortization. The Mortgage Interest Rate as well
as the Lifetime Rate Cap and the Periodic Rate Cap for each
Mortgage Loan are as set forth for such Mortgage Loan in the
Mortgage Loan Schedule;
(xxx) No Defaults.
Except with respect to delinquencies identified on the Mortgage
Loan Schedule, there is no default, breach, violation or event of
acceleration existing under any Mortgage or Mortgage Note and no
event that, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration, and the Company has not
waived any default, breach, violation or event of acceleration;
(xxxi) Loan-to-Value Ratio; Modifications; No
Foreclosures.
The Loan-to-Value Ratio of each Mortgage Loan was less than 100% at
the time of its origination or refinancing, as applicable. No
Mortgage Loan is subject to a written foreclosure agreement or
pending foreclosure proceedings;
(xxxii) Primary Mortgage Insurance.
Each Mortgage Loan with an LTV at origination in excess of 80% will
be subject to a Primary Mortgage Insurance Policy, issued by an
insurer acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, in at least such
amounts as are required by ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ ▇▇▇. All
provisions of such Primary Mortgage Insurance Policy have been and
are being complied with, such policy is in full force and effect,
and all premiums due thereunder have been paid. Any Mortgage
subject to any such Primary Mortgage Insurance Policy obligates the
Mortgagor thereunder to maintain such insurance and to pay all
premiums and charges in connection therewith unless terminable in
accordance with ▇▇▇▇▇▇▇ Mac standards or Applicable Law;
(xxxiii) Underwriting Guidelines.
The Mortgage Loan was underwritten in accordance with the Company's
underwriting guidelines in effect at the time of origination with
exceptions thereto exercised in a reasonable manner;
(xxxiv) No Bankruptcy.
To the best of the Company's knowledge, no Mortgagor was a debtor
in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated and as of the related Closing
Date, the Company has not received notice that any Mortgagor is a
debtor under any state or federal bankruptcy or insolvency
proceeding.
(xxxv) No Additional Payments.
There is no obligation on the part of the Company or any other
party to make payments in addition to those made by the Mortgagor;
(xxxvi) Comparable Custodial Mortgage Loan File.
Each document or instrument in the related Custodial or Retained
Mortgage File, whether delivered to the Custodian or not is in a
form generally acceptable to prudent mortgage lenders that
regularly originate or purchase mortgage loans comparable to the
Mortgage Loans for sale to prudent investors in the secondary
market that invest in mortgage loans such as the Mortgage Loans;
(xxxvii) Contents of the Retained Mortgage File.
The Retained Mortgage File contains the documents listed in items
(5) through (8) of Exhibit B;
(xxxviii) HOEPA.
No Mortgage Loan is a High Cost Loan or Covered Loan;
(xxxix) Fair Credit Reporting Act.
The Company, in its capacity as servicer for each Mortgage Loan,
has fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower
credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a
monthly basis;
(xl) No Arbitration.
No Mortgage Loan originated on or after August 1, 2004 requires the
related Mortgagor to submit to arbitration to resolve any dispute
arising out of or relating in any way to the Mortgage Loan
transaction;
(xli) No Pledged Assets.
No Mortgage Loan is subject to the Servicer's Pledged Asset
Program;
(xlii) No Credit Insurance Policies.
No Mortgagor was required to purchase any credit life, disability,
accident or health insurance product as a condition of obtaining
the extension of credit. No Mortgagor was required to obtain a
prepaid single premium credit life, disability, accident or health
insurance policy in connection with the origination of the
Mortgage Loan; No proceeds from any Mortgage Loan were used to
purchase single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage Loan;
(xliii) Prepayment Penalty Term.
No Mortgage Loan originated on or after October 1, 2002, will
impose a prepayment premium for a term in excess of three years
after its origination. No Mortgage Loan originated before October
1, 2002, will impose a prepayment premium for a term in excess of
five years after its origination;
(xliv) Tax Service Contract; Flood Certification
Contract.
Each Mortgage Loan shall have a tax service contract and, if
applicable, a flood insurance contract which shall have a term of
the life of the Mortgage Loan. Each such tax service and flood
insurance contract shall be fully transferable without penalty,
premium or cost to the Purchaser or its designee, unless, with
respect to tax service contract, the Company is terminated
pursuant to Section 11.2 hereof;
(xlv) Violation of Environmental Laws.
There is no pending action or proceeding directly involving any
Mortgaged Property of which the Company is aware in which
compliance with any environmental law, rule or regulation is an
issue; and to the best of the Company's knowledge, nothing further
remains to be done to satisfy in full all requirements of each
such law, rule or regulation constituting a prerequisite to use
and enjoyment of said property;
(xlvi) No Buydowns.
No Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in
any separate account established by the Company, the Mortgagor or
anyone on behalf of the Mortgagor, (b) paid by any source other
than the Mortgagor or (c) contains any other similar provisions
which may constitute a "buydown" provision;
(xlvii) Interest Calculation.
Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(xlviii) The Mortgagor.
The Mortgagor is one or more natural persons and/or trustees for
an Illinois land trust or a trustee under a "living trust" and
such "living trust" is in compliance with the Underwriting
Guidelines;
(xlix) No Construction Loans.
No Mortgage Loan was made in connection with (i) the construction
or rehabilitation of a Mortgage Property or (ii) facilitating the
trade-in or exchange of a Mortgaged Property other than a
construction-to-permanent loan which has converted to a permanent
Mortgage Loan;
(l) Balloon Payments, Graduated Payments or Contingent
Interests.
No Mortgage Loan is a graduated payment mortgage loan and no
Mortgage Loan has a shared appreciation or other contingent
interest feature. If a Mortgage Loan has a balloon payment
feature, the Mortgage Note is payable in monthly payments based on
a fifteen- or thirty-year amortization schedule and a final
monthly payment substantially greater than the preceding monthly
payment which is sufficient to amortize the remaining principal of
the Mortgage Loan;
(li) Ground Leases.
With respect to each Mortgage Loan that is secured in whole or in
part by the interest of the mortgagor as a lessee under a ground
lease of the related Mortgaged Property (a "Ground Lease") and not
by a fee interest in such Mortgaged Property and as further
specified in the underwriting guidelines of the Company:
(a) The mortgagor is the owner of a valid and subsisting
interest as tenant under the Ground Lease;
(b) The Ground Lease is in full force and effect, unmodified
and not supplemented by any writing or otherwise;
(c) The Company has not received notice of default by the
mortgagor under the Ground Lease or of circumstances
which, with the passage of time or the giving of notice
or both, would constitute an event of default;
(d) The term of the Ground Lease exceeds the maturity date
of the related Mortgage Loan by at least five years;
(e) The Ground Lease or a memorandum thereof has been
recorded and by its terms permits the leasehold estate
to be mortgaged;
(f) The Ground Lease does not contain any default provisions
that could give rise to forfeiture or termination of the
Ground Lease except for the non-payment of the Ground
Lease rents;
(g) The execution, delivery and performance of the Mortgage
do not require the consent (other than those consents
which have been obtained and are in full force and
effect) under, and will not contravene any provision of
or cause a default under, the Ground Lease; and
(h) The Ground Lease provides that the leasehold can be
transferred, mortgaged and sublet an unlimited number of
times either without restriction or on payment of a
reasonable fee and delivery of reasonable documentation
to the lessor.
(lii) Conversion.
The Adjustable Rate Mortgage Loan is not a Convertible Mortgage
Loan;
(liii) Anti-Money Laundering Laws.
With respect to each Mortgage Loan, the Company has complied with
all applicable anti-money laundering laws and regulations (the
"Anti-Money Laundering Laws"), and has established an anti-money
laundering compliance program as required by the applicable
Anti-Money Laundering Laws, and maintains, and will maintain,
sufficient information to identify the applicable Mortgagor for
purposes of the Anti-Money Laundering Laws; and
(liv) Due on Sale.
The Mortgage or Mortgage Note contains an enforceable provision,
to the extent not prohibited by federal law, for the acceleration
of the payment of the unpaid principal balance of the related
Mortgage Loan in the event the related Mortgaged Property is sold
without the prior consent of the mortgagee thereunder; provided
that, with respect to Mortgage Notes which bear an adjustable rate
of interest, such provision shall not be enforceable if the
Mortgagor causes to be submitted to the Company to evaluate the
intended transferee as if a new Mortgage Loan were being made to
such transferee, and the Company reasonably determines that the
security will not be impaired by such Mortgage Loan assumption and
that the risk of breach of any covenant or agreement in such
Mortgage is acceptable to the Purchaser.
3.3 Repurchase.
It is understood and agreed that the representations and warranties set
forth in Sections 3.1 and 3.2 shall survive the sale of the Mortgage Loans to
the Purchaser and the delivery of the Mortgage Loan Documents to the Custodian
and shall inure to the benefit of the Purchaser, notwithstanding any restrictive
or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or failure to examine any Custodial Mortgage File or Retained
Mortgage File. Upon discovery by either the Company or the Purchaser of a breach
of any of the foregoing representations and warranties which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or which materially and adversely affects the interests of Purchaser
in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan), the party discovering such breach shall
give prompt written notice to the other.
Within 90 days of the earlier of either discovery by or notice to the
Company of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans, (i) the Company shall use its
best efforts promptly to cure such breach in all material respects and (ii) if
such breach cannot be cured, the Company shall, at the Purchaser's option,
repurchase such Mortgage Loan at the Repurchase Price. In the event that a
breach shall involve any representation or warranty set forth in Section 3.1,
and such breach cannot be cured within 90 days of the earlier of either
discovery by or notice to the Company of such breach, all of the Mortgage Loans
shall, at the Purchaser's option, be repurchased by the Company at the
Repurchase Price. Any repurchase of a Mortgage Loan or Loans pursuant to the
foregoing provisions of this Section 3.3 shall be accomplished by deposit in the
Custodial Account of the amount of the Repurchase Price as required in Section
4.4, for distribution to Purchaser on the Remittance Date for the month
following the date of the repurchase, after deducting therefrom any amount
received in respect of such repurchased Mortgage Loan or Loans and being held in
the Custodial Account for future distribution for application in accordance with
Section 5.1.
Notwithstanding the above paragraphs, within 60 days of the earlier of
either discovery by, or notice to, the Company of any breach of the
representations or warranties set forth in clauses, (xxxviii), (xl) or (xlvi) of
Section 3.2, the Company shall repurchase such Mortgage Loan at the Repurchase
Price.
If pursuant to the foregoing provisions the Company repurchases a Mortgage
Loan that is a MERS Mortgage Loan, the Company shall either (i) cause MERS to
execute and deliver an assignment of the Mortgage in recordable form to transfer
the Mortgage from MERS to the Company on behalf of the Purchaser and shall cause
such Mortgage to be removed from registration on the MERS(R) System in
accordance with MERS' rules and regulations or (ii) cause MERS to designate on
the MERS(R) System the Purchaser as the beneficial holder with respect to such
Mortgage Loan.
At the time of repurchase, the Purchaser and the Company shall arrange for
the reassignment of the repurchased Mortgage Loan to the Company and the
delivery to the Company of any documents held by the Custodian relating to the
repurchased Mortgage Loan. In the event of a repurchase, the Company shall,
simultaneously with such reassignment, give written notice to the Purchaser that
such repurchase has taken place and amend the Mortgage Loan Schedule to reflect
the withdrawal of the repurchased Mortgage Loan from this Agreement.
In addition to such repurchase obligation, the Company shall indemnify the
Purchaser and hold it harmless against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of the
Company's representations and warranties contained in this Agreement. It is
understood and agreed that the obligations of the Company set forth in this
Section 3.3 to cure or repurchase a defective Mortgage Loan and to indemnify the
Purchaser as provided in this Section 3.3, constitute the sole remedies of the
Purchaser respecting a breach of the foregoing representations and warranties.
Any cause of action against the Company relating to or arising out of the
breach of any representations and warranties made in Sections 3.1 and 3.2 shall
accrue as to any Mortgage Loan upon the earliest of (i) discovery of such breach
by the Company or the Purchaser or notice thereof by the Purchaser to the
Company, (ii) failures by the Company to cure such breach or repurchase such
Mortgage Loan as specified above, and (iii) demand upon the Company by the
Purchaser for compliance with this Agreement.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.1 Company to Act as Servicer.
The Company, as an independent contractor, shall service and administer
the Mortgage Loans and shall have full power and authority, acting alone or
through the utilization of a third party servicing provider, to do any and all
things in connection with such servicing and administration which the Company
may deem necessary or desirable, consistent with the terms of this Agreement and
with Accepted Servicing Practices. The Servicer shall be responsible for any and
all acts of a third party servicing provider, and the Servicer's utilization of
a third party servicing provider shall in no way relieve the liability of the
Servicer under this Agreement.
Consistent with the terms of this Agreement and subject to the REMIC
Provisions if the Mortgage Loans have been transferred to a REMIC, the Company
may waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Company's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Purchaser. In the event of any such modification which
permits the deferral of interest or principal payments on any Mortgage Loan, the
Company shall, on the Business Day immediately preceding the Remittance Date in
any month in which any such principal or interest payment has been deferred,
deposit in the Custodial Account from its own funds, in accordance with Section
5.3, the difference between (a) such month's principal and one month's interest
at the Mortgage Loan Remittance Rate on the unpaid principal balance of such
Mortgage Loan and (b) the amount paid by the Mortgagor. The Company shall be
entitled to reimbursement for such advances to the same extent as for all other
advances made pursuant to Section 5.3. Without limiting the generality of the
foregoing, the Company shall continue, and is hereby authorized and empowered,
to execute and deliver on behalf of itself and the Purchaser, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties. If reasonably required by the Company, the
Purchaser shall furnish the Company with any powers of attorney and other
documents necessary or appropriate to enable the Company to carry out its
servicing and administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Company shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, and the Purchaser's reliance on the Company.
Notwithstanding anything to the contrary contained herein, the Company
shall not waive a prepayment penalty except under the following circumstances:
(i) such waiver would, in the reasonable judgment of the Company, maximize
recovery of total proceeds taking into account the value of such prepayment
penalty and the related Mortgage Loan and, if such waiver is made in connection
with a refinancing of the related Mortgage Loan, such refinancing is related to
a default or a reasonably foreseeable default; or (ii) the Company obtains a
written Opinion of Counsel, which may be in-house counsel for the Company,
opining that any prepayment penalty or charge is not legally enforceable in the
circumstances under which the related Principal Prepayment occurs. In the event
the Company waives any prepayment penalty, other than as set forth in (i) and
(ii) above, the Company shall deposit the amount of any such prepayment penalty
in the Custodial Account for distribution to the Purchaser on the next
Remittance Date.
The Company is authorized and empowered by the Purchaser, in its own name,
when the Company believes it appropriate in its reasonable judgment to register
any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Purchaser, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a
Mortgage in the name of MERS, solely as nominee for the Purchaser and its
successors and assigns. The Company will comply in all material respects with
the rules and procedures of MERS in connection with the servicing of the MERS
Mortgage Loans for as long as such Mortgage Loans are registered with MERS.
Section 4.2 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 4.1 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Company shall take such action as (1) the Company
would take under similar circumstances with respect to a similar mortgage loan
held for its own account for investment, (2) shall be consistent with Accepted
Servicing Practices, and (3) the Company shall determine prudently to be in the
best interest of Purchaser. In the event that any payment due under any Mortgage
Loan is not postponed pursuant to Section 4.1 and remains delinquent for a
period of 90 days or any other default continues for a period of 90 days beyond
the expiration of any grace or cure period, the Company shall commence
foreclosure proceedings, the Company shall notify the Purchaser in writing of
the Company's intention to do so, and the Company shall not commence foreclosure
proceedings if the Purchaser objects to such action within three (3) Business
Days of receiving such notice. In the event the Purchaser objects to such
foreclosure action, the Company shall not be required to make Monthly Advances
with respect to such Mortgage Loan, pursuant to Section 5.3, and the Company's
obligation to make such Monthly Advances shall terminate on the 90th day
referred to above. In such connection, the Company shall from its own funds make
all necessary and proper Servicing Advances, provided, however, that the Company
shall not be required to expend its own funds in connection with any foreclosure
or towards the restoration or preservation of any Mortgaged Property, unless it
shall determine (a) that such preservation, restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan to Purchaser after
reimbursement to itself for such expenses and (b) that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it shall
have priority for purposes of withdrawals from the Custodial Account pursuant to
Section 4.5) or through Insurance Proceeds (respecting which it shall have
similar priority).
Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event
the Company has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, the Company shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser shall
determine how the Company shall proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Purchaser directs the Company to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Company shall be reimbursed for
all reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Company, the Company shall be entitled to be
reimbursed from amounts in the Custodial Account pursuant to Section 4.5 hereof.
In the event the Purchaser directs the Company not to proceed with foreclosure
or acceptance of a deed in lieu of foreclosure, the Company shall be reimbursed
for all Servicing Advances made with respect to the related Mortgaged Property
from the Custodial Account pursuant to Section 4.5 hereof.
Section 4.3 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the Company shall proceed diligently to collect
all payments due under each of the Mortgage Loans when the same shall become due
and payable in accordance with Accepted Servicing Practices, and shall, in
accordance with RESPA and applicable state law, take special care in
ascertaining and estimating Escrow Payments and all other charges that will
become due and payable with respect to the Mortgage Loan and the Mortgaged
Property, to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Section 4.4 Establishment of and Deposits to Custodial Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled "▇▇▇▇▇ Fargo Bank, N.A.,
in trust for the Purchaser of Residential Mortgage Loans serviced under a
Seller's Warranties and Servicing Agreement, dated as of August 1, 2004, and
various Mortgagors - P & I", or as otherwise directed in writing by the
Purchaser or its assigns after the related Closing Date in connection with any
Whole Loan Transfer or Pass-Through Transfer. The Custodial Account shall be
established with a Qualified Depository. Upon request of the Purchaser and
within ten (10) days thereof, the Company shall provide the Purchaser with
written confirmation of the existence of such Custodial Account. The Custodial
Account shall at all times be insured to the fullest extent allowed by
Applicable Law. Funds deposited in the Custodial Account may be drawn on by the
Company in accordance with Section 4.5.
The Company shall deposit in the Custodial Account within one Business Day
(or two Business Days in the case of the amounts described in clauses (iii)
through (v) below) of the Company's receipt, and retain therein, the following
collections received by the Company and payments made by the Company after the
related Cut-off Date, other than payments of principal and interest due on or
before the related Cut-off Date:
(1) all payments on account of principal on the
Mortgage Loans, including all Principal Prepayments;
(2) all payments on account of interest on the
Mortgage Loans, adjusted to the Mortgage Loan Remittance Rate;
(3) all Liquidation Proceeds;
(4) all Insurance Proceeds including amounts
required to be deposited pursuant to Section 4.10 (other than proceeds to
be held in the Escrow Account and applied to the restoration or repair of
the Mortgaged Property or released to the Mortgagor in accordance with
Section 4.14), Section 4.11 and Section 4.15;
(5) all Condemnation Proceeds which are not
applied to the restoration or repair of the Mortgaged Property or released
to the Mortgagor in accordance with Section 4.14;
(6) any amount required to be deposited in the
Custodial Account pursuant to Section 4.1, 5.1, 5.3, 6.1 or 6.2;
(7) any amounts payable in connection with the
repurchase of any Mortgage Loan pursuant to Section 2.3, 3.3 or 6.2;
(8) with respect to each Principal Prepayment an
amount (to be paid by the Company out of its funds) which, when added to
all amounts allocable to interest received in connection with the
Principal Prepayment, equals one month's interest on the amount of
principal so prepaid at the Mortgage Loan Remittance Rate;
(9) any amounts required to be deposited by the
Company pursuant to Section 4.11 in connection with the deductible clause
in any blanket hazard insurance policy; and
(10) any amounts received with respect to or
related to any REO Property and all REO Disposition Proceeds pursuant to
Section 4.16.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.1, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.5. The Company shall
reimburse the Custodial Account for any losses incurred as a result of the
investment of amounts on deposit in the Custodial Account.
Section 4.5 Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(1) to make payments to the Purchaser in the
amounts and in the manner provided for in Section 5.1;
(2) to reimburse itself for Monthly Advances of
the Company's funds made pursuant to Section 5.3, the Company's right to
reimburse itself pursuant to this subclause (2) being limited to amounts
received on the related Mortgage Loan which represent late payments of
principal and/or interest respecting which any such advance was made, it
being understood that, in the case of any such reimbursement, the
Company's right thereto shall be prior to the rights of Purchaser, except
that, where the Company is required to repurchase a Mortgage Loan pursuant
to Section 2.3, 3.3 or 6.2, the Company's right to such reimbursement
shall be subsequent to the payment to the Purchaser of the Repurchase
Price pursuant to such sections and all other amounts required to be paid
to the Purchaser with respect to such Mortgage Loan;
(3) to reimburse itself for unreimbursed Servicing
Advances, and for any unpaid Servicing Fees, the Company's right to
reimburse itself pursuant to this subclause (3) with respect to any
Mortgage Loan being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be collected by
the Company from the Mortgagor or otherwise relating to the Mortgage Loan,
it being understood that, in the case of any such reimbursement, the
Company's right thereto shall be prior to the rights of Purchaser, except
that where the Company is required to repurchase a Mortgage Loan pursuant
to Section 2.3, 3.3 or 6.2, in which case the Company's right to such
reimbursement shall be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to such sections and all other amounts required
to be paid to the Purchaser with respect to such Mortgage Loan;
(4) to pay itself as servicing compensation any
interest on funds deposited in the Custodial Account;
(5) to reimburse itself for expenses incurred to
the extent reimbursable pursuant to Section 8.1;
(6) to pay any amount required to be paid pursuant
to Section 4.16 related to any REO Property, it being understood that, in
the case of any such expenditure or withdrawal related to a particular REO
Property, the amount of such expenditure or withdrawal from the Custodial
Account shall be limited to amounts on deposit in the Custodial Account
with respect to the related REO Property;
(7) to reimburse itself for any Servicing Advances
or REO expenses after liquidation of the Mortgaged Property not otherwise
reimbursed above;
(8) to reimburse the trustee with respect to any
Pass-Through Transfer for any unreimbursed Monthly Advances or Servicing
Advances made by the Trustee, as applicable, the right to reimbursement
pursuant to this subclause (8) with respect to any Mortgage Loan being
limited to related Liquidation Proceeds, proceeds of REO Dispositions,
Condemnation Proceeds, Insurance Proceeds and such other amounts as may be
collected by the Company from the Mortgagor or otherwise relating to the
Mortgage Loan, it being understood that, in the case of such
reimbursement, such trustee's right thereto shall be prior to the rights
of the Company to reimbursement under (2) and (3), and prior to the rights
of the Purchaser under (1);
(9) to remove funds inadvertently placed in the
Custodial Account by the Company; and
(10) to clear and terminate the Custodial Account
upon the termination of this Agreement.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all interest earned on funds on
deposit in the Custodial Account. The Company may use such withdrawn funds only
for the purposes described in this Section 4.5.
Section 4.6 Establishment of and Deposits to Escrow Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled,
"▇▇▇▇▇ Fargo Bank, N.A., in trust for the Purchaser under the Seller's
Warranties and Servicing Agreement dated as of August 1, 2004 and/or subsequent
purchasers of Mortgage Loans, and various Mortgagors - T & I." The Escrow
Accounts shall be established with a Qualified Depository, in a manner which
shall provide maximum available insurance thereunder. Upon request of the
Purchaser and within ten (10) days thereof, the Company shall provide the
Purchaser with written confirmation of the existence of such Escrow Account.
Funds deposited in the Escrow Account may be drawn on by the Company in
accordance with Section 4.7.
The Company shall deposit in the Escrow Account or Accounts within two (2)
Business Days of the Company's receipt, and retain therein:
(1) all Escrow Payments collected on account of
the Mortgage Loans, for the purpose of effecting timely payment of any
such items as required under the terms of this Agreement;
(2) all amounts representing Insurance Proceeds or
Condemnation Proceeds which are to be applied to the restoration or repair
of any Mortgaged Property; and
(3) all amounts representing proceeds of any
Primary Mortgage Insurance Policy.
The Company shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section 4.7.
The Company shall be entitled to retain any interest paid on funds deposited in
the Escrow Account by the depository institution, other than interest on
escrowed funds required by law to be paid to the Mortgagor. To the extent
required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes. The Company shall
reimburse the Escrow Account for any losses incurred as a result of the
investment of amounts on deposit in the Escrow Account.
Section 4.7 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Company
only:
(1) to effect timely payments of ground rents,
taxes, assessments, water rates, mortgage insurance premiums, condominium
charges, fire and hazard insurance premiums or other items constituting
Escrow Payments for the related Mortgage;
(2) to reimburse the Company for any Servicing
Advances made by the Company pursuant to Section 4.8 with respect to a
related Mortgage Loan, but only from amounts received on the related
Mortgage Loan which represent late collections of Escrow Payments
thereunder;
(3) to refund to any Mortgagor any funds found to
be in excess of the amounts required under the terms of the related
Mortgage Loan;
(4) for transfer to the Custodial Account and
application to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the related Mortgage and Mortgage Note;
(5) for application to restoration or repair of
the Mortgaged Property in accordance with the procedures outlined in
Section 4.14;
(6) to pay to the Company, or any Mortgagor to the
extent required by law, any interest paid on the funds deposited in the
Escrow Account;
(7) to remove funds inadvertently placed in the
Escrow Account by the Company;
(8) to apply the proceeds of Primary Mortgage
Insurance as if such proceeds were payments on, or Liquidation Proceeds
of, the related Mortgage Loan, as the case may be; and
(9) to clear and terminate the Escrow Account on
the termination of this Agreement.
Section 4.8 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges (including renewal premiums) and
shall effect payment thereof prior to the applicable penalty or termination
date, employing for such purpose deposits of the Mortgagor in the Escrow Account
which shall have been estimated and accumulated by the Company in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage. The
Company assumes full responsibility for the timely payment of all such bills and
shall effect timely payment of all such charges irrespective of each Mortgagor's
faithful performance in the payment of same or the making of the Escrow
Payments, and the Company shall make advances from its own funds to effect such
payments.
Section 4.9 Protection of Accounts.
The Company may transfer the Custodial Account or the Escrow Account to a
different Qualified Depository from time to time, upon prior written notice to
the Purchaser.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by an
insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, against loss by fire, hazards
of extended coverage and such other hazards as are customary in the area where
the Mortgaged Property is located, in an amount which is at least equal to the
lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan and (ii) the greater of (a) the outstanding principal balance of
the Mortgage Loan and (b) an amount such that the proceeds thereof shall be
sufficient to prevent the Mortgagor or the loss payee from becoming a
co-insurer. In the event a hazard insurance policy shall be in danger of being
terminated, or in the event the insurer shall cease to be acceptable to ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac, the Company shall notify the Purchaser and the related
Mortgagor, and shall use its best efforts, as permitted by Applicable Law, to
obtain from another Qualified Insurer a replacement hazard insurance policy
substantially and materially similar in all respects to the original policy. In
no event, however, shall a Mortgage Loan be without a hazard insurance policy at
any time, subject only to Section 4.11 hereof.
If upon origination of the Mortgage Loan, the related Mortgaged Property
was located in an area identified by the Flood Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available)
a flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration is in effect with a generally acceptable
insurance carrier acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended.
If a Mortgage is secured by a unit in a condominium project, the Company
shall verify that the coverage required of the owner's association, including
hazard, flood, liability, and fidelity coverage, is being maintained in
accordance with then current ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac requirements, secure from
the owner's association its agreement to notify the Company promptly of any
change in the insurance coverage or of any condemnation or casualty loss that
may have a material effect on the value of the Mortgaged Property as security.
In the event that any Purchaser or the Company shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the desirability of protection of the Mortgaged Property.
All policies required hereunder shall name the Company as loss payee and
shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Company shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The Company shall determine that such policies provide sufficient risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address.
Pursuant to Section 4.4, any amounts collected by the Company under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.4) shall be deposited in the Custodial Account subject to
withdrawal pursuant to Section 4.5.
Section 4.11 Maintenance of Primary Mortgage Insurance Policy; Claims..
With respect to each Mortgage Loan with a LTV in excess of 80%, the
Company shall, without any cost to the Purchaser, maintain or cause the
Mortgagor to maintain in full force and effect a Primary Mortgage Insurance
Policy insuring that portion of the Mortgage Loan in excess of a percentage in
conformance with ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac requirements. The Company shall pay
or shall cause the Mortgagor to pay the premium thereon on a timely basis, at
least until the LTV of such Mortgage Loan is reduced to 80%, or such amount as
required by Applicable Law, or such other amount as ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac
permits for cancellation of mortgage insurance. In the event that such Primary
Mortgage Insurance Policy shall be terminated, the Company shall obtain from
another insurer a comparable replacement policy, with a total coverage equal to
the remaining coverage of such terminated Primary Mortgage Insurance Policy. If
the insurer shall cease to be a qualified insurer, the Company shall determine
whether recoveries under the Primary Mortgage Insurance Policy are jeopardized
for reasons related to the financial condition of such insurer, it being
understood that the Company shall in no event have any responsibility or
liability for any failure to recover under the Primary Mortgage Insurance Policy
for such reason. If the Company determines that recoveries are so jeopardized,
it shall notify the Purchaser and the Mortgagor, if required, and obtain from
another qualified insurer a replacement insurance policy. The Company shall not
take any action which would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the Company
would have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to Subsection
6.1, the Company shall promptly notify the insurer under the related Primary
Mortgage Insurance Policy, if any, of such assumption or substitution of
liability in accordance with the terms of such Primary Mortgage Insurance Policy
and shall take all actions which may be required by such insurer as a condition
to the continuation of coverage under such Primary Mortgage Insurance Policy. If
such Primary Mortgage Insurance Policy is terminated as a result of such
assumption or substitution of liability, the Company shall obtain a replacement
Primary Mortgage Insurance Policy as provided above.
In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any Primary Mortgage Insurance Policy in a timely fashion in
accordance with the terms of such Primary Mortgage Insurance Policy and, in this
regard, to take such action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policy respecting a defaulted Mortgage Loan. Pursuant
to Section 4.6, any amounts collected by the Company under any Primary Mortgage
Insurance Policy shall be deposited in the Escrow Account, subject to withdrawal
pursuant to Section 4.7.
Section 4.12 Maintenance of Mortgage Impairment Insurance.
In the event that the Company shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy provides
coverage in an amount equal to the amount required pursuant to Section 4.10 and
otherwise complies with all other requirements of Section 4.10, it shall
conclusively be deemed to have satisfied its obligations as set forth in Section
4.10. The Company shall prepare and make any claims on the blanket policy as
deemed necessary by the Company in accordance with Accepted Servicing Practices.
Any amounts collected by the Company under any such policy relating to a
Mortgage Loan shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.5. Such policy may contain a deductible clause, in which
case, in the event that there shall not have been maintained on the related
Mortgaged Property a policy complying with Section 4.10, and there shall have
been a loss which would have been covered by such policy, the Company shall
deposit in the Custodial Account at the time of such loss the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to be deposited from the Company's funds, without reimbursement
therefor. Upon request of any Purchaser, the Company shall cause to be delivered
to such Purchaser a certified true copy of such policy and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days' prior written notice to such Purchaser.
Section 4.13 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The Company shall maintain with responsible companies, at its own expense,
a blanket Fidelity Bond and an Errors and Omissions Insurance Policy, with broad
coverage on all officers, employees or other persons acting in any capacity
requiring such persons to handle funds, money, documents or papers relating to
the Mortgage Loans ("Company Employees"). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker's Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy
also shall protect and insure the Company against losses in connection with the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 4.13
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Company from its duties and obligations as set forth in
this Agreement. The minimum coverage under any such bond and insurance policy
shall be at least equal to the amounts acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Upon the request of any Purchaser, the Company shall cause to be delivered to
such Purchaser a certified true copy of such fidelity bond and insurance policy
and a statement from the surety and the insurer that such fidelity bond and
insurance policy shall in no event be terminated or materially modified without
30 days' prior written notice to the Purchaser.
Section 4.14 Inspections.
If any Mortgage Loan is more than 45 days delinquent, the Company or its
agent shall inspect the Mortgaged Property as promptly as practicable after the
45th day of delinquency and shall conduct subsequent inspections in accordance
with Accepted Servicing Practices or as may be required by the primary mortgage
guaranty insurer. The Company shall keep a record of each such inspection and,
upon request, shall provide the Purchaser with such information.
Section 4.15 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices. For claims greater than
$15,000, at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation Proceeds:
(i) the Company shall receive satisfactory
independent verification of completion of repairs and issuance of any
required approvals with respect thereto;
(ii) the Company shall take all steps necessary to
preserve the priority of the lien of the Mortgage, including, but not
limited to requiring waivers with respect to mechanics' and materialmen's
liens;
(iii) the Company shall verify that the Mortgage
Loan is not in default; and
(iv) pending repairs or restoration, the Company
shall place the Insurance Proceeds or Condemnation Proceeds in the Escrow
Account.
If the Purchaser is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.
Section 4.16 Claims.
In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer in a timely fashion and, in this regard, to take such action as shall be
necessary to permit recovery respecting a defaulted Mortgage Loan. Pursuant to
Section 4.04, any amounts collected by the Company under any guaranty shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.5.
Section 4.17 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Company, or in the event the Company is not
authorized or permitted to hold title to real property in the state where the
REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, or the perfection of
the ownership or security interest of the Purchaser in such REO Property would
be adversely effected, the deed or certificate of sale shall be taken in the
name of such Person or Persons as shall be consistent with an Opinion of Counsel
obtained by the Company from any attorney duly licensed to practice law in the
state where the REO Property is located. The Person or Persons holding such
title other than the Purchaser shall acknowledge in writing that such title is
being held as nominee for the Purchaser.
The Company shall manage, conserve, protect and operate each REO Property
for the Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Company shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Company deems to
be in the best interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event within one year
after title has been taken to such REO Property, unless (i) a REMIC election has
not been made with respect to the arrangement under which the Mortgage Loans and
the REO Property are held, and (ii) the Company determines, and gives an
appropriate notice to the Purchaser to such effect, that a longer period is
necessary for the orderly liquidation of such REO Property. If a period longer
than one year is permitted under the foregoing sentence and is necessary to sell
any REO Property, (i) the Company shall report monthly to the Purchaser as to
the progress being made in selling such REO Property and (ii) if, with the
written consent of the Purchaser, a purchase money mortgage is taken in
connection with such sale, such purchase money mortgage (1) shall name the
Company as mortgagee, and (2) shall not be held pursuant to this Agreement, but
instead a separate participation agreement among the Company and Purchaser shall
be entered into with respect to such purchase money mortgage.
The Company shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
Subject to 5 days' prior written notice to the Purchaser, at the address
specified in Section 12.5, of its intent to do so, the disposition of REO
Property shall be carried out by the Company at such price, and upon such terms
and conditions, as the Company deems to be in the best interests of the
Purchaser. The proceeds of sale of the REO Property shall be promptly deposited
in the Custodial Account. As soon as practical thereafter the expenses of such
sale shall be paid and the Company shall reimburse itself for any related
unreimbursed Servicing Advances, unpaid Servicing Fees and unreimbursed advances
made pursuant to Section 5.3. On the Remittance Date immediately following the
Principal Prepayment Period in which such sale proceeds are received the net
cash proceeds of such sale remaining in the Custodial Account shall be
distributed to the Purchaser.
The Company shall withdraw the Custodial Account funds necessary for the
proper operation management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 4.10 and the fees
of any managing agent of the Company, or the Company itself. The Company shall
make monthly distributions on each Remittance Date to the Purchaser of the net
cash flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in the Section 4.16 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section 4.18 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.2, the Company
shall furnish to the Purchaser on or before the Remittance Date each month a
statement with respect to any REO Property covering the operation of such REO
Property for the previous month and the Company's efforts in connection with the
sale of such REO Property and any rental of such REO Property incidental to the
sale thereof for the previous month. That statement shall be accompanied by such
other information as the Purchaser shall reasonably request.
Section 4.19 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed in lieu of foreclosure, the Company
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.
Section 4.20 Reports of Foreclosures and Abandonments of Mortgaged
Property.
Following the foreclosure sale or abandonment of any Mortgaged Property,
the Company shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code. The Company shall file information reports with
respect to the receipt of mortgage interest received in a trade or business and
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property as required by the Code. Such reports shall be in form
and substance sufficient to meet the reporting requirements imposed by the Code.
Section 4.21 Fair Credit Reporting Act.
The Company, in its capacity as servicer for each Mortgage Loan, agrees to
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans Union
Credit Information Company (three of the credit repositories), on a monthly
basis.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.1 Remittances.
On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.5), plus (b) all amounts, if any, which the Company is obligated to distribute
pursuant to Section 5.3, minus (c) any amounts attributable to Principal
Prepayments received after the applicable Principal Prepayment Period which
amounts shall be remitted on the following Remittance Date, together with any
additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.4(viii);
and minus (d) any amounts attributable to Monthly Payments collected but due on
a Due Date or Dates subsequent to the first day of the month of the Remittance
Date.
All cash flows from prepayment penalties shall be passed through to the
Purchaser and shall not be waived by the Company, except pursuant to Section
4.1.
With respect to any remittance received by the Purchaser after the date on
which such payment was due, the Company shall pay to the Purchaser interest on
any such late payment at an annual rate equal to the Prime Rate, adjusted as of
the date of each charge, plus two percentage points, but in no event greater
than the maximum amount permitted by Applicable Law. Such interest shall be
deposited in the Custodial Account by the Company on the date such late payment
is made and shall cover the period commencing with the day following such second
Business Day and ending with the Business Day on which such payment is made,
both inclusive. Such interest shall be remitted along with the distribution
payable on the next succeeding Remittance Date. The payment by the Company of
any such interest shall not be deemed an extension of time for payment or a
waiver of any Event of Default by the Company.
Section 5.2 Statements to Purchaser.
Not later than the Remittance Advice Date, the Company shall furnish to
the Purchaser a Monthly Remittance Advice, including the information set forth
in Exhibit E attached hereto, with a trial balance report attached thereto, as
to the period ending on the last day of the preceding month, in a form to be
agreed upon by the Purchaser and the Company.
Section 5.3 Monthly Advances by Company.
On the Business Day immediately preceding each Remittance Date, the
Company shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution an amount equal to all Monthly Payments
(with interest adjusted to the Mortgage Loan Remittance Rate) which were due on
the Mortgage Loans during the applicable Due Period and which were delinquent at
the close of business on the Determination Date immediately preceding such
Remittance Date or which were deferred pursuant to Section 4.1. Any amounts held
for future distribution and so used shall be replaced by the Company by deposit
in the Custodial Account on or before any future Remittance Date if funds in the
Custodial Account on such Remittance Date shall be less than payments to the
Purchaser required to be made on such Remittance Date. Notwithstanding the
foregoing, the Company shall not be permitted to make any advances from amounts
held for future distribution, and instead shall be required to make all advances
from its own funds, unless the Company, its parent, or their respective
successors hereunder shall have a long-term credit rating of at least "A" by
Fitch, Inc. (doing business as Fitch Ratings), "A" by Standard & Poor's Ratings
Group, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and "A2" by ▇▇▇▇▇'▇
Investors Service, Inc. The Company's obligation to make such Monthly Advances
as to any Mortgage Loan will continue through the last Monthly Payment due prior
to the payment in full of the Mortgage Loan, or through the earlier of: (i) the
last Remittance Date prior to the Remittance Date for the distribution of all
Liquidation Proceeds and other payments or recoveries (including Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan and (ii)
the Remittance Date prior to the date the Mortgage Loan is converted to REO
Property, provided however, that if requested by a Rating Agency in connection
with Pass-Through Transfer, the Company shall be obligated to make such advances
through the Remittance Date prior to the date on which cash is received in
connection with the liquidation of REO Property; provided, however, that such
obligation shall cease if the Company determines, in its sole reasonable
opinion, that advances with respect to such Mortgage Loan are non-recoverable by
the Company from Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds, or otherwise with respect to a particular Mortgage Loan. In the event
that the Company determines that any such advances are non-recoverable, the
Company shall provide the Purchaser with a certificate signed by two officers of
the Company evidencing such determination.
ARTICLE VI
GENERAL SERVICING PROCEDURES
6.1 Transfers of Mortgaged Property.
The Company shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the Person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to the
extent it has knowledge of such conveyance, exercise its rights to accelerate
the maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Company shall not exercise such rights if
prohibited by law from doing so.
If the Company reasonably believes it is unable under Applicable Law to
enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the Person to whom such property has
been conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event the
Company is unable under Applicable Law to require that the original Mortgagor
remain liable under the Mortgage Note and the Company has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Purchaser's consent.
To the extent that any Mortgage Loan is assumable, the Company shall
inquire diligently into the credit worthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used with respect to underwriting mortgage loans of the
same type as the Mortgage Loan. If the credit of the proposed transferee does
not meet such underwriting criteria, the Company diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by Applicable Law, accelerate
the maturity of the Mortgage Loan.
Section 6.2 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, the Company shall notify
the Purchaser in the Monthly Remittance Advice as provided in Section 5.2, and
may request the release of any Mortgage Loan Documents. If such Mortgage Loan is
a MERS Mortgage Loan, the Company is authorized to cause the removal from the
registration on the MERS System of such Mortgage and to execute and deliver, on
behalf of the Purchaser, any and all instruments of satisfaction or cancellation
or of partial or full release.
If the Company satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Company otherwise prejudice any rights the Purchaser may have under the
mortgage instruments, upon written demand of the Purchaser, the Company shall
repurchase the related Mortgage Loan at the Repurchase Price by deposit thereof
in the Custodial Account within 2 Business Days of receipt of such demand by the
Purchaser. The Company shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 4.12 insuring the Company against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section 6.3 Servicing Compensation.
As compensation for its services hereunder, the Company shall be entitled
to withdraw from the Custodial Account or to retain from interest payments on
the Mortgage Loans the amount of its Servicing Fee. The Servicing Fee shall be
payable monthly and shall be computed on the basis of the Scheduled Principal
Balance and for the period respecting which any related interest payment on a
Mortgage Loan is computed. The obligation of the Purchaser to pay the Servicing
Fee is limited to, and payable solely from, the interest portion of such Monthly
Payments.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 6.01, and late payment charges shall be retained by
the Company to the extent not required to be deposited in the Custodial Account.
The Company shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 6.4 Annual Statement as to Compliance.
For each Mortgage Loan Package, the Company shall deliver to the Purchaser
on or before February 28 each year, beginning in the calendar year immediately
succeeding the calendar year of the related Closing Date, an Officer's
Certificate, stating that (i) a review of the activities of the Company during
the preceding calendar year and of performance under this Agreement has been
made under such officer's supervision, and (ii) the Company has complied with
the provisions of this Agreement or similar agreements, and (iii) to the best of
such officer's knowledge, based on such review, the Company has fulfilled all
its obligations under this Agreement or similar agreements throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and the action being taken by the Company to cure such default.
Section 6.5 Annual Independent Public Accountants' Servicing Report.
For each Mortgage Loan Package, on or before February 28 each year,
beginning in the calendar year immediately succeeding the calendar year of the
related Closing Date, the Company, at its expense, shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to furnish a statement to each Purchaser to the
effect that such firm has examined certain documents and records relating to the
servicing of the mortgage loans similar in nature and that such firm is of the
opinion that the provisions of this or similar agreements have been complied
with, and that, on the basis of such examination conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers,
nothing has come to their attention which would indicate that such servicing has
not been conducted in compliance therewith, except for (i) such exceptions as
such firm shall believe to be immaterial, and (ii) such other exceptions as
shall be set forth in such statement. By providing Purchaser a copy of a Uniform
Single Attestation Program Report from their independent public accountant's on
an annual basis, Company shall be considered to have fulfilled its obligations
under this Section 6.5.
Section 6.6 Right to Examine Company Records.
The Purchaser, or its designee, shall have the right to examine and audit
any and all of the books, records, or other information of the Company, whether
held by the Company or by another on its behalf, with respect to or concerning
this Agreement or the Mortgage Loans, during business hours or at such other
times as may be reasonable under applicable circumstances, upon reasonable
advance notice. The Purchaser shall pay its own expenses associated with such
examination.
Section 6.7 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Company shall not take
any action or fail to take any action or fail to cause the REMIC to take any
action, that, under the REMIC Provisions, if taken or not taken, as the case may
be, could (i) endanger the status of the REMIC as a REMIC or (ii) result in the
imposition of a tax upon the REMIC (including but not limited to the tax on
"prohibited transactions" as defined Section 860F(a)(2) of the Code and the tax
on "contributions" to a REMIC set forth in Section 860G(d) of the Code) unless
the Company has received an Opinion of Counsel (at the expense of the party
seeking to take such action) to the effect that the contemplated action will not
endanger such REMIC status or result in the imposition of any such tax.
ARTICLE VII
COMPANY TO COOPERATE
Section 7.1 Provision of Information.
During the term of this Agreement, the Company shall furnish to the
Purchaser such periodic, special, or other reports or information, and copies or
originals of any documents contained in the Servicing File for each Mortgage
Loan provided for herein. All other special reports or information not provided
for herein as shall be necessary, reasonable, or appropriate with respect to the
Purchaser or any regulatory agency will be provided at the Purchaser's expense.
All such reports, documents or information shall be provided by and in
accordance with all reasonable instructions and directions which the Purchaser
may give.
The Company shall execute and deliver all such instruments and take all
such action as the Purchaser may reasonably request from time to time, in order
to effectuate the purposes and to carry out the terms of this Agreement.
Section 7.2 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective Purchaser a Consolidated Statement of Operations of
the Company for the most recently completed two fiscal years for which such a
statement is available, as well as a Consolidated Statement of Condition at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Company, upon request, also shall make available any comparable
interim statements to the extent any such statements have been prepared by or on
behalf of the Company (and are available upon request to members or stockholders
of the Company or to the public at large).
The Company also shall make available to Purchaser or prospective
Purchaser a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Company or the
financial statements of the Company, and to permit any prospective purchaser to
inspect the Company's servicing facilities for the purpose of satisfying such
prospective purchaser that the Company has the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE VIII
THE COMPANY
Section 8.1 Indemnification; Third Party Claims.
The Company shall indemnify the Purchaser and hold it harmless against any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of the
Company to perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. The Company immediately shall
notify the Purchaser if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Company shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser promptly shall
reimburse the Company for all costs, fees or expenses advanced by it pursuant to
this paragraph except when the claim in any way results from, relates to or
arises out of any liability, obligation, act or omission of the Company,
including without limitation, the Company's indemnification obligation under
Section 3.3 and this Section 8.1, any repurchase obligation of the Company
hereunder including Sections 2.3, 3.3 and 6.2, or the failure of the Company to
service and administer the Mortgage Loans and otherwise perform its obligations
hereunder in strict compliance with the terms of this Agreement.
Section 8.2 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and franchises
and shall obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement or any of the Mortgage Loans and
to perform its duties under this Agreement.
Any Person into which the Company may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, provided, however, that
the successor or surviving Person shall be an institution which is a ▇▇▇▇▇▇
▇▇▇/▇▇▇▇▇▇▇ Mac-approved company in good standing. Furthermore, in the event the
Company transfers or otherwise disposes of all or substantially all of its
assets to an affiliate of the Company, such affiliate shall satisfy the
condition above, and shall also be fully liable to the Purchaser for all of the
Company's obligations and liabilities hereunder.
Section 8.3 Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers, employees or
agents of the Company shall be under any liability to the Purchaser for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment, provided, however, that
this provision shall not protect the Company or any such Person against any
breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement or any other liability which would otherwise be imposed under this
Agreement. The Company and any director, officer, employee or agent of the
Company may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Company shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve it
in any expense or liability, provided, however, that the Company may, with the
consent of the Purchaser, undertake any such action which it may deem necessary
or desirable in respect to this Agreement and the rights and duties of the
parties hereto. In such event, the Company shall be entitled to reimbursement
from the Purchaser of the reasonable legal expenses and costs of such action.
Section 8.4 Limitation on Resignation and Assignment by Company.
The Purchaser has entered into this Agreement with the Company and
subsequent Purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Company, and the representations as to the adequacy of
its servicing facilities, plant, personnel, records and procedures, its
integrity, reputation and financial standing, and the continuance thereof.
Therefore, the Company shall neither assign this Agreement or the servicing
rights hereunder, or sell or otherwise dispose of all of its property or assets
without the prior written consent of the Purchaser, which consent shall not be
unreasonably withheld.
The Company shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Company and the Purchaser or upon
the determination that its duties hereunder are no longer permissible under
Applicable Law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.1.
Without in any way limiting the generality of this Section 8.4, in the
event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or sell or otherwise dispose of all or substantially
all of its property or assets without the prior written consent of the
Purchaser, then the Purchaser shall have the right to terminate this Agreement
upon notice given as set forth in Section 10.1, without any payment of any
penalty or damages and without any liability whatsoever to the Purchaser or any
third party.
ARTICLE IX
PASS-THROUGH TRANSFER
Section 9.1 Removal of Mortgage Loans from Inclusion Under this Agreement
Upon a Pass-Through Transfer
The Purchaser and the Company agree that with respect to some or all of
the Mortgage Loans, the Purchaser, at its sole option, may effect Whole Loan
Transfers or Pass-Through Transfers, retaining the Company as the Servicer
thereof or subservicer if a master servicer is employed, or as applicable the
"seller/servicer". From and after the Reconstitution Date, the Mortgage Loans
transferred may remain covered by this Agreement, insofar as the Company shall
continue to service such Mortgage Loans on behalf of the Purchaser in accordance
with the terms and provisions of this Agreement.
The Company shall cooperate with the Purchaser in connection with each
Whole Loan Transfer or Pass-Through Transfer in accordance with this Section
9.1. In connection therewith the Company shall:
(a) make all representations and warranties with respect to the
Mortgage Loans as of the related Closing Date and with respect to the Company
itself as of the closing date of each Whole Loan Transfer or Pass-Through
Transfer;
(b) negotiate in good faith and execute any seller/servicer
agreements required by the shelf registrant to effectuate the foregoing provided
such agreements create no greater obligation or cost on the part of the Company
than otherwise set forth in this Agreement;
(c) with respect to any Mortgage Loans that are subject to a
Pass-Through Transfer or other securitization (a "Securitization") in which the
filing of a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ certification directly with the Securities and
Exchange Commission is required, by February 28th of each year or in connection
with any additional ▇▇▇▇▇▇▇▇-▇▇▇▇▇ certification required to be filed, upon
thirty (30) days written request, an officer of the Company shall execute and
deliver a Company Certification substantially in the form attached hereto as
Exhibit H, to the entity filing the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ certification directly with
the Securities and Exchange Commission (such as the Purchaser, any master
servicer, any trustee or any depositor) for the benefit of such entity and such
entity's affiliates and the officers, directors and agents of such entity and
such entity's affiliates, and shall indemnify such entity or persons arising out
of any breach of the Company's obligations or representations relating thereto
as provided in such Company Certification;
(d) represent to the Purchaser, the depositor, the trustee, and the
initial purchaser of the securities issued in connection with any Pass-Through
Transfer that: (1) that the Company has serviced the Mortgage Loans in
accordance with the terms of this Agreement, and has otherwise complied with all
covenants and obligations hereunder, and (2) that the Company has taken no
action that would, nor omitted to take any required action the omission of which
would, have the effect of impairing the mortgage insurance or guarantee on the
Mortgage Loans. The Company also agrees to represent the accuracy of any
information provided to the Purchaser by the Company for inclusion in any
prospectus supplement, offering memorandum or term sheet prepared in connection
with any Pass-Through Transfers;
(e) deliver an opinion of counsel (which can be an opinion of
in-house counsel to the Company) reasonably acceptable to the Purchaser;
provided that any out-of-pocket, third party expenses incurred by the Company in
connection with the foregoing shall be paid by the Purchaser;
(f) provide as applicable:
(i) any and all information and appropriate verification of
information which may be reasonably available to the Company, whether
through letters of its auditors and counsel or otherwise, as the Purchaser
shall request;
(ii) (x) a company certification executed by a senior officer
of the Company responsible for the servicing of the Mortgage Loans, and
(y) such additional statements, certificates or other similar documents of
the Company or reports from the Company's accountants in connection with a
Pass-Through Transfer and in substance as required by Applicable Law; and
(iii) such additional representations, warranties, covenants,
opinions of counsel, letters from auditors, financial description of the
Company as servicer for inclusion in any offering memorandum to be
distributed to potential investors in connection with a Pass-Through
Transfer with respect to the Mortgage Loans, and certificates of public
officials or officers of the Company as are reasonably believed necessary
by the trustee, any Rating Agency, the Purchaser, as the case may be, in
connection with such Whole Loan Transfers or Pass-Through Transfers. The
Purchaser shall pay all third party costs associated with the preparation
of such information. The Company shall execute any seller/servicer
agreements required within a reasonable period of time after receipt of
such seller/servicer agreements which time shall be sufficient for the
Company and Company's counsel to review such seller/servicer agreements.
Under this Agreement, the Company shall retain a servicing fee for each
Mortgage Loan, at the Servicing Fee Rate;
(g) indemnify the Purchaser for any material misstatements,
omissions or alleged material misstatements or omissions contained in the
information provided pursuant to (d) or (f) above; provided, that the Purchaser
shall provide indemnification to the Company, its successors or assigns, with
respect to any material misstatements, omissions or alleged material
misstatements or omissions contained in any information (other than the
information provided by the Company pursuant to (d) or (f) above) in any
securitization offering materials; and
(h) if required at any time by the Rating Agencies in connection
with any Pass-Through Transfer, the Company shall deliver such additional
documents from its Retained Mortgage File to the Custodian as the Rating
Agencies may require (a "Rating Agency Delivery Event").
In the event the Purchaser has elected to have the Company hold record
title to the Mortgages, prior to the Reconstitution Date and after the related
Closing Date the Company shall prepare an Assignment of Mortgage in blank or, at
the option of the Purchaser, to the trustee from the Company (to the extent such
Assignment has not been prepared on or before the related Closing Date)
acceptable to the trustee for each Mortgage Loan that is part of the Whole Loan
Transfers or Pass-Through Transfers. The Purchaser shall pay all preparation and
recording costs associated therewith. The Company shall execute each Assignment
of Mortgage, track such Assignments of Mortgage to ensure they have been
recorded and deliver them as required by the trustee upon the Company's receipt
thereof. Additionally, the Company shall prepare and execute, at the direction
of the Purchaser, any note endorsements in connection with any and all
seller/servicer agreements.
ARTICLE X
DEFAULT
Section 10.1 Events of Default.
Each of the following shall constitute an Event of Default on the part of
the Company:
(i) any failure by the Company to remit to the Purchaser
any payment required to be made under the terms of this Agreement which
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 Company by the Purchaser; or
(ii) failure by the Company duly to observe or perform
in any material respect any other of the covenants or agreements on the
part of the Company set forth in this Agreement which continues unremedied
for a period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Company by the Purchaser or by the Custodian; or
(iii) failure by the Company to maintain its license to
do business in any jurisdiction where the Mortgaged Property is located if
such license is required; or
(iv) a decree or order of a court or agency or
supervisory authority having jurisdiction for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, including bankruptcy, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Company and such degree or order shall
have remained in force undischarged or unstayed for a period of 60 days;
or
(v) the Company shall consent 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 Company or of or relating to all or substantially all of
its property; or
(vi) the Company shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency, bankruptcy or reorganization
statute, make an assignment for the benefit of its creditors, voluntarily
suspend payment of its obligations or cease its normal business operations
for three Business Days; or
(vii) the Company ceases to meet the qualifications of a
▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇ Mac servicer; or
(viii) the Company attempts to assign its right to
servicing compensation hereunder or to assign this Agreement or the
servicing responsibilities hereunder in violation of Section 8.4; or
(ix) the taking of any action by the Company, any
Company Employee, any Affiliate or any director or employee thereof that
constitutes fraud or criminal activity in the performance of its
obligations under this Agreement or the indictment of any of the foregoing
Persons for criminal activity related to the mortgage origination or
servicing activities of the Company, in each case, where such indictment
materially and adversely affects the ability of the Company to perform its
obligations under this Agreement (subject to the condition that such
indictment is not dismissed within 90 days).
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatever rights the Purchaser may have at law or
equity to damages, including injunctive relief and specific performance, the
Purchaser, by notice in writing to the Company, may terminate with cause all the
rights and obligations of the Company under this Agreement and in and to the
Mortgage Loans and the proceeds thereof.
Upon receipt by the Company of such written notice, all authority and
power of the Company under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the successor appointed
pursuant to Section 12.1. Upon written request from any Purchaser, the Company
shall prepare, execute and deliver to the successor entity designated by the
Purchaser any and all documents and other instruments, place in such successor's
possession all Mortgage Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company's sole
expense. The Company shall cooperate with the Purchaser and such successor in
effecting the termination of the Company's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Company to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
If any of the Mortgage Loans are MERS Mortgage Loans, in connection with
the termination or resignation (as described in Section 8.4) of the Company
hereunder, either (i) the successor servicer shall represent and warrant that it
is a member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, or (ii) the predecessor
servicer shall cooperate with the successor servicer either (x) in causing MERS
to execute and deliver an assignment of Mortgage in recordable form to transfer
the Mortgage from MERS to the Purchaser and to execute and deliver such other
notices, documents and other instruments as may be necessary to effect a
transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS(R)
System to the successor servicer or (y) in causing MERS to designate on the
MERS(R) System the successor servicer as the servicer of such Mortgage Loan.
Section 10.2 Waiver of Defaults.
By a written notice, the Purchaser may waive any default by the Company in
the performance of its obligations hereunder and its consequences. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XI
TERMINATION
Section 11.1 Termination.
This Agreement shall terminate upon any of: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder, (ii) mutual consent
of the Company and the Purchaser in writing or (iii) termination pursuant to
Section 10.1, 11.2 or 11.3.
Section 11.2 Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights the Company
may have hereunder, without cause, as provided in this Section 11.2. Any such
notice of termination shall be in writing and delivered to the Company and any
Rating Agency by registered mail as provided in Section 12.5.
The Company shall be entitled to receive, as such liquidated damages, upon
its termination as servicer hereunder without cause pursuant to this Section
11.2 an amount equal to 2.50% of the aggregate outstanding principal amount of
the Mortgage Loans as of the termination date paid by the Purchaser to the
Company with respect to all of the Mortgage Loans. In the event of a termination
pursuant to this Section 11.2, the Company shall be required, at the expense of
the Purchaser, to deliver to the Custodian the entire contents of the Retained
Mortgage File, to the extent such contents were not previously delivered to the
Custodian pursuant to this Agreement or the Custodial Agreement.
Section 11.3 Termination With Cause.
Notwithstanding any other provision hereof to the contrary, the Purchaser,
at its option, may terminate this Agreement, and any rights the Company may have
hereunder, with cause upon ten (10) Business Days' prior written notice. For all
purposes of determining "cause" with respect to termination of this Agreement or
the rights of the Company hereunder, such term shall mean, without limitation,
termination upon the occurrence of any Event of Default hereunder which is not
cured within any applicable cure period. In the event of a termination of the
Company for cause under this Section 11.3, no liquidated damages shall be
payable to the Company pursuant to Section 11.2 and the Company shall be
required, at its own expense, to deliver to the Custodian the entire contents of
the Retained Mortgage File, to the extent such contents were not previously
delivered to the Custodian pursuant to this Agreement or the Custodial
Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.1 Successor to Company.
Prior to termination of the Company's responsibilities and duties under
this Agreement pursuant to Sections 8.4, 10.1 or 11.1, the Purchaser shall, (i)
succeed to and assume all of the Company's responsibilities, rights, duties and
obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in Section 8.2 and which shall succeed to all rights
and assume all of the responsibilities, duties and liabilities of the Company
under this Agreement prior to the termination of Company's responsibilities,
duties and liabilities under this Agreement. In connection with such appointment
and assumption, the Purchaser may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor shall
agree. In the event that the Company's duties, responsibilities and liabilities
under this Agreement should be terminated pursuant to the aforementioned
sections, the Company shall discharge such duties and responsibilities during
the period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which it
is obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of
its successor. The resignation or removal of the Company pursuant to the
aforementioned sections shall not become effective until a successor shall be
appointed pursuant to this Section 12.1 and shall in no event relieve the
Company of the representations and warranties made pursuant to Sections 3.1 and
3.2 and the remedies available to the Purchaser under Sections 2.3, 3.3 and 6.2,
it being understood and agreed that the provisions of such Sections 2.3, 3.1,
3.2, 3.3, 6.1 and 8.1 shall be applicable to the Company notwithstanding any
such sale, assignment, resignation or termination of the Company, or the
termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Company and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and warranties
set forth in Section 3.1, except for the portion of subsection (h) relating to
sale of the mortgage loans and all of subsections (j) and (l) thereof, whereupon
such successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Company, with like effect
as if originally named as a party to this Agreement. Any termination or
resignation of the Company or termination of this Agreement pursuant to Section
8.4, 10.1, 11.1, 11.2 or 11.3 shall not affect any claims that any Purchaser may
have against the Company arising out of the Company's actions or failure to act
prior to any such termination or resignation.
The Company shall deliver promptly to the successor servicer the funds in
the Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Company shall account for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Company.
Upon a successor's acceptance of appointment as such, the Company shall
notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.5.
Section 12.2 Amendment.
This Agreement may be amended from time to time by written agreement
signed by the Company and the Purchaser.
Section 12.3 Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Each of the Company and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect or any litigation based on, or arising out of, under, or in connection
with, this Agreement, or any other documents and instruments executed in
connection herewith, or any course of conduct, course of dealing, statements
(whether oral or written), or actions of the Company or the Purchaser. This
provision is a material inducement for the Purchaser to enter into this
Agreement.
Section 12.4 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated as
herein provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section 12.5 Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
(i) if to the Company with respect to servicing and investor
reporting issues:
▇▇▇▇▇ Fargo Bank, N.A.
1 Home Campus, MAC #X2401042
Des Moines, Iowa 503280001
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇▇▇▇▇
if to the Company with respect to all other issues:
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇, MAC X3906-012
Tel: (▇▇▇) ▇▇▇-▇▇▇▇; Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ Fargo Bank, N.A.
1 Home Campus, MAC #X240106T
Des Moines, Iowa 503280001
Attention: General Counsel
Tel: (▇▇▇) ▇▇▇-▇▇▇▇; Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished to the
Purchaser in writing by the Company;
(ii) if to Purchaser:
▇▇▇▇▇▇▇ Sachs Mortgage Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇; Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ Sachs Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇; Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished to the
Company in writing by the Purchaser.
Section 12.6 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
Section 12.7 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of the
Company shall be rendered as an independent contractor and not as agent for the
Purchaser.
Section 12.8 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.4, this Agreement
shall inure to the benefit of and be binding upon, and shall be enforceable by,
the Company and the Purchaser and their respective successors and assigns,
including without limitation, any trustee appointed by the Purchaser with
respect to any Whole Loan Transfer or Pass-Through Transfer. The parties agree
that this Agreement and signature pages thereof may be transmitted between them
by facsimile and that faxed signatures may constitute original signatures and
that a faxed signature page containing the signature (faxed or original) is
binding on the parties.
Section 12.9 Recordation of Assignments of Mortgage.
To the extent permitted by Applicable Law, as to each Mortgage Loan which
is not a MERS Mortgage Loan, each of the Assignments of Mortgage 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, which recordation shall have been effected at the Company's
expense in the event recordation is either necessary under Applicable Law or
requested by the Purchaser at its sole option.
Section 12.10 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Company to
assign, in whole or in part, its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any Person to exercise any
rights of the Purchaser hereunder, by executing an Assignment and Assumption
Agreement substantially in the form of Exhibit F hereto and the assignee or
designee shall accede to the rights and obligations hereunder of the Purchaser
with respect to such Mortgage Loans. All references to the Purchaser in this
Agreement shall be deemed to include its assignee or designee.
Section 12.11 Solicitation of Mortgagor.
Neither party shall, after the related Closing Date, take any action to
solicit the refinancing of any Mortgage Loan. It is understood and agreed that
neither (i) promotions undertaken by either party or any affiliate of either
party which are directed to the general public at large, including, without
limitation, mass mailings based upon commercially acquired mailing lists,
newspaper, radio, television advertisements nor (ii) serving the refinancing
needs of a Mortgagor who, without solicitation, contacts either party in
connection with the refinance of such Mortgage or Mortgage Loan, shall
constitute solicitation under this Section.
IN WITNESS WHEREOF, the Company and the Purchaser have caused their names
to be signed hereto by their respective duly authorized officers as of the day
and year first above written.
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Real Estate
Funding Corp., its General Partner
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
▇▇▇▇▇ FARGO BANK, N.A.,
As Company
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the _____ day of August 2004 before me, a Notary Public in and for said
State, personally appeared , known to me to be the of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Real Estate
Funding Corp., the general partner of ▇▇▇▇▇▇▇ Sachs Mortgage Company, the
partnership that executed the within instrument and also known to me to be the
person who executed it on behalf of said partnership, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
Notary Public
My Commission expires
-----------------------
STATE OF MARYLAND )
) ss:
COUNTY OF ▇▇▇▇▇▇▇▇▇▇ )
On the _____ day of August 2004 before me, a Notary Public in and for said
State, personally appeared ____________, known to me to be the _______________
of ▇▇▇▇▇ Fargo Bank, N.A., the national banking association that executed the
within instrument and also known to me to be the person who executed it on
behalf of said bank, and acknowledged to me that such bank executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
Notary Public
My Commission expires
EXHIBIT A
ASSIGNMENT AND CONVEYANCE
On this ___ day of __________, ____, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, ▇▇▇▇▇ Fargo Bank,
N.A. ("Company"), as (i) the Seller under that certain Purchase Price and Terms
Letter, dated as of ___________, _____ (the "PPTA"), (ii) the Company under that
certain Master Seller's Warranties and Servicing Agreement, dated as of August
1, 2004 (the "Purchase Agreement" and, together with the PPTL, the "Agreements")
does hereby sell, transfer, assign, set over and convey to ▇▇▇▇▇▇▇ Sachs
Mortgage Company ("Purchaser") as the Purchaser under the Agreements, and the
Purchaser hereby accepts from the Company, without recourse, but subject to the
terms of the Agreements, all right, title and interest of, in and to the
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as Exhibit A
(the "Mortgage Loans"). Pursuant to Section 2.03 of the Purchase Agreement, the
Company has delivered the Custodial Mortgage File to the Custodian. The Retained
Mortgage File and the Servicing File for each Mortgage Loan shall be retained by
the Company pursuant to Section 2.1 of the Purchase Agreement.
In accordance with Article 2 of the Purchase Agreement, the Purchaser
accepts the Mortgage Loans listed on Exhibit A attached hereto. Notwithstanding
the foregoing the Purchaser does not waive any rights or remedies it may have
under the Agreements.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
▇▇▇▇▇ FARGO BANK, N.A.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
Accepted and Agreed:
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Real Estate
Funding Corp., its General Partner
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
EXHIBIT A
MORTGAGE LOAN SCHEDULE
See attached
EXHIBIT A-1
DATA FILE ELEMENTS
(1) the Mortgagor's first and last name;
(2) a code indicating whether the Mortgaged Property is owner-occupied;
(3) the original date of the Mortgage Loan and the remaining months to
maturity from the Cut-off Date, based on the original amortization
schedule;
(4) the date on which the first Monthly Payment was due on the Mortgage Loan;
(5) the current Monthly Payment;
(6) the amount of the Monthly Payment as of the Cut-off Date;
(7) the last Due Date on which a Monthly Payment was actually applied to the
Stated Principal Balance;
(8) the original principal amount of the Mortgage Loan;
(9) the first Adjustment Date;
(10) a code indicating the purpose of the loan (i.e., purchase, financing,
Rate/Term Refinancing, Cash-Out Refinancing);
(11) the maximum Mortgage Interest Rate under the terms of the Mortgage Note;
(12) the Mortgage Interest Rate at origination;
(13) the Periodic Interest Rate Cap;
(14) the Index;
(15) the date on which the first Monthly Payment was due on the Mortgage Loan
and, if such date is not consistent with the Due Date currently in effect,
such Due Date;
(16) a code indicating the documentation style (i.e., full (providing two years
employment verification - 2 years W-2's and current paystub or 2 years
1040's for self employed borrowers), alternative or reduced),
(17) a code indicating if the Mortgage Loan is subject to a PMI Policy,
(18) the Appraised Value of the Mortgage Property,
(19) the sale price of the Mortgaged Property, if applicable,
(20) the Mortgagor's and Co-Mortgagor's (if applicable) social security
numbers;
(21) the Mortgagor's FICO score;
(22) the street address of the Mortgaged Property including the city, state,
county and zip code;
(23) term of prepayment penalty;
(24) a code indicating whether the Mortgaged Property is a single family
residence, a 2-4 family dwelling, a PUD, a townhouse, manufactured
housing, a unit in a condominium project, or a mobile home;
(25) a code indicating the product type;
(26) a code indicating the Credit Grade of the Mortgage Loan;
(27) the Loan to Value Ratio;
(28) the Mortgage Interest Rate as of the Cut-off Date;
(29) the stated maturity date;
(30) the original principal amount of the Mortgage Loan;
(31) the sale balance of the Mortgage Loan as of the close of business on the
Cut-off Date, after deduction of payments of principal due on or before
the Cut-off Date;
(32) the Mortgage Loan purpose type;
(33) the next Interest Rate Adjustment Date;
(34) the Gross Margin;
(35) the Note date of the Mortgage Loan;
(36) the Appraised value;
(37) the Mortgagor's and Co-Mortgagor's race;
(38) the Mortgagor's and Co-Mortgagor's gender;
(39) the qualifying monthly income of the Mortgagor;
(40) a code indicating whether the loan was originated through a correspondent,
retail or wholesale channel;
(41) the amount of the monthly principal and interest payment at the time of
origination;
(42) the Mortgage Insurance Certificate Number and percentage of coverage, if
applicable;
(43) borrower date of birth;
(44) a code indicating first time buyer;
(45) the monthly servicing fee;
(46) a code indicating the HMDA data;
(47) whether the Mortgage Loan is convertible,
(48) a code indicating whether the Mortgage Loan is a Time$aver(R) Mortgage
Loan,
(49) a code indicating whether the Mortgage Loan is a Cooperative Loan,
(50) the MIN Number for each MERS Mortgage Loan,
(51) LEX number,
(52) employer name,
(53) subsidy code,
(54) a code indicating whether the Mortgage Loan is a relocation loan;
(55) a code indicating whether the Mortgage Loan is a temporary buydown;
(56) the master service fee, if applicable,
(57) servicer name,
(58) total Loan-to-Value,
(59) the Mortgagor's electronic credit score;
(60) a code indicating whether the Mortgage Loan is a leasehold loan;
(61) a code indicating whether the Mortgage Loan is an Alt A loan,
(62) a code indicating whether the Mortgage Loan is a no ratio loan,
(63) citizenship type code,
(64) lien status,
(65) loan RSCA indicator,
(66) terminal didget
(67) servicer code,
(68) loan term number,
(69) a code indicating whether the Mortgage Loan is a pledged asset,
(70) effective LTV percentage for pledged asset mortgage loans,
(71) a code indicating whether the Mortgage Loan is an interest only loan,
(72) a code indicating whether the Mortgage Loan is a MERS Mortgage Loan.
EXHIBIT B
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Retained and Custodial Mortgage
Files shall include the respective items listed below, which shall be available
for inspection by the Purchaser and any prospective Purchaser, and which shall
be retained by the Company in the Retained Mortgage File or Servicing File or
delivered to the Custodian pursuant to the Custodial Agreement and Sections 2.1
and 2.3 of the Master Seller's Warranties and the Servicing Agreement to which
this Exhibit is attached (the "Agreement"):
With respect to each Custodial Mortgage File:
(1) The original Mortgage Note bearing all intervening endorsements, endorsed
"Pay to the order of ______________, without recourse" and signed in the
name of the Company by an authorized officer (in the event that the
Mortgage Loan was acquired by the Company in a merger, the signature must
be in the following form: "[Company], successor by merger to [name of
predecessor]"; and in the event that the Mortgage Loan was acquired or
originated by the Company while doing business under another name, the
signature must be in the following form: "[Company], formerly know as
[previous name]").
(2) The originals or certified true copies of all assumption, modification,
consolidation or extension agreements, with evidence of recording noted
thereon if recordation is required to maintain the lien of the mortgage or
is otherwise required, or, if recordation is not so required, an original
or copy of any such assumption, modification, consolidation or extension
agreements.
(3) The original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording, from the Company to "______________"
or as otherwise directed by the Purchaser. If the Mortgage Loan was
acquired by the Company in a merger, the Assignment of Mortgage must be
made by "[Company], successor by merger to [name of predecessor]." If the
Mortgage Loan was acquired or originated by the Company while doing
business under another name, the Assignment of Mortgage must be by
"[Company], formerly know as [previous name]." Subject to the foregoing
and where permitted under the Applicable Laws of the jurisdiction wherein
the Mortgaged property is located, such Assignments of Mortgage may be
made by blanket assignments for Mortgage Loans secured by the Mortgaged
Properties located in the same county.
(4) The original of any personal endorsement, surety and/or guaranty agreement
executed in connection with the Mortgage Note, if any.
With respect to each Retained Mortgage File:
(5) Except as set forth below, and for each Mortgage Loan that is not a MERS
Mortgage Loan, the original Mortgage, with evidence of recording thereon
or a certified true and correct copy of the Mortgage sent for recordation.
If in connection with any Mortgage Loan, the Company cannot deliver or
cause to be delivered the original Mortgage with evidence of recording
thereon on or prior to the related Closing Date because of a delay caused
by the public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, the Company shall
deliver or cause to be delivered to the Custodian, a photocopy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Company stating that
such Mortgage has been dispatched to the appropriate public recording
office for recordation and that the original recorded Mortgage or a copy
of such Mortgage certified by such public recording office to be a true
and complete copy of the original recorded Mortgage will be promptly
delivered to the Custodian upon receipt thereof by the Company; or (ii) in
the case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office or by the title insurance
company that issued the title policy to be a true and complete copy of the
original recorded Mortgage.
(6) Originals or certified true copies of all intervening assignments of the
Mortgage necessary to show a complete chain of title from the original
mortgagee to the Company, with evidence of recording thereon, or if any
such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the Company shall
deliver or cause to be delivered to the Custodian, a photocopy of such
intervening assignment, together with (i) in the case of a delay caused by
the public recording office, an Officer's Certificate of the Company
stating that such intervening assignment of mortgage has been dispatched
to the appropriate public recording office for recordation and that such
original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public
recording office or by the title insurance company that issued the title
policy to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon
receipt thereof by the Company; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment is
lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a
true and complete copy of the original recorded intervening assignment.
(7) The original mortgage policy of title insurance or other evidence of title
such as a copy of the title commitment or copy of the preliminary title
commitment.
(8) Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
With respect to each Mortgage Loan, the Servicing File shall include each of the
following items to the extent in the possession of the Company or in the
possession of the Company's agent(s):
(9) Verification of Mortgage Insurance.
(10) The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 4.10 of the Agreement.
(11) Residential loan application.
(12) Mortgage Loan closing statement.
(13) Verification of employment and income, unless originated under the
Company's Limited Documentation program, ▇▇▇▇▇▇ ▇▇▇ Timesaver Plus.
(14) Verification of acceptable evidence of source and amount of down payment.
(15) Credit report on the Mortgagor, if available.
(16) Residential appraisal report.
(17) Photograph of the Mortgaged Property.
(18) Survey of the Mortgaged Property, if required by the title company or
Applicable Law.
(19) Copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy, i.e.
map or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(20) All required disclosure statements.
(21) If available, termite report, structural engineer's report, water
potability and septic certification.
(22) Sales contract, if applicable.
(23) Evidence of payment of taxes and insurance premiums, insurance claim
files, correspondence, current and historical computerized data files, and
all other processing, underwriting and closing papers and records which
are customarily contained in a mortgage loan file and which are required
to document the Mortgage Loan or to service the Mortgage Loan.
(24) Amortization schedule, if available.
(25) Original power of attorney, if applicable.
In the event an Officer's Certificate of the Company is delivered to the
Custodian because of a delay caused by the public recording office in returning
any recorded document, the Company shall deliver to the Custodian, within 240
days of the related Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. The Company shall be required to deliver to the
Custodian the applicable recorded document by the date specified in (iv) above.
An extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld.
EXHIBIT C
FORM OF CUSTODIAL AGREEMENT
See attached
EXHIBIT D
FORM OF MASTER OPINION OF COUNSEL
Re: Sale of Mortgage Loans by
▇▇▇▇▇ Fargo Bank, N.A. to
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
Dear Sir/Madam:
I am _____ of ▇▇▇▇▇ Fargo Bank, N.A. and have acted as counsel to ▇▇▇▇▇
Fargo Bank, N.A. (the "Company"), with respect to certain matters in connection
with the sale by the Company of the mortgage loans (the "Mortgage Loans")
pursuant to that certain Master Seller's Warranties and Servicing Agreement (the
"Seller's Warranties and Servicing Agreement") by and between the Company and
▇▇▇▇▇▇▇ Sachs Mortgage Company (the "Purchaser"), dated as of August 1, 2004,
which sale is in the form of whole Mortgage Loans. Capitalized terms not
otherwise defined herein have the meanings set forth in the Seller's Warranties
and Servicing Agreement.
I have examined the following documents:
1. the Seller's Warranties and Servicing Agreement;
2. the Custodial Agreement;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as I have deemed necessary and
relevant as a basis for this opinion.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Seller's
Warranties and Servicing Agreement. I have assumed the authenticity of all
documents submitted to me as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is my opinion that:
1. The Company is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.
2. The Company has the power to engage in the transactions contemplated by
the Seller's Warranties and Servicing Agreement and the Custodial Agreement and
all requisite power, authority and legal right to execute and deliver the
Seller's Warranties and Servicing Agreement, the Custodial Agreement and the
Mortgage Loans, and to perform and observe the terms and conditions of such
instruments.
3. Each person who, as an officer or attorney-in-fact of the Company,
signed (a) the Seller's Warranties and Servicing Agreement, (b) the Custodial
Agreement , and (c) any other document delivered prior hereto or on the date
hereof in connection with the sale and servicing of the Mortgage Loans in
accordance with the Seller's Warranties and Servicing Agreement was, at the
respective times of such signing and delivery, and is, as of the date hereof,
duly elected or appointed, qualified and acting as such officer or
attorney-in-fact, and the signatures of such persons appearing on such documents
are their genuine signatures.
4. Each of the Seller's Warranties and Servicing Agreement, the Custodial
Agreement and the Mortgage Loans, has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement enforceable
in accordance with its terms, subject to the effect of insolvency, liquidation,
conservatorship and other similar laws administered by the Federal Deposit
Insurance Corporation affecting the enforcement of contract obligations of
insured banks and subject to the application of the rules of equity, including
those respecting the availability of specific performance, none of which will
materially interfere with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
5. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original or facsimile signature in order to
complete the transactions contemplated by the Seller's Warranties and Servicing
Agreement and the Custodial Agreement and in order to execute the endorsements
to the Mortgage Notes and the assignments of the Mortgages, and the original or
facsimile signature of the officer at the Company executing the Seller's
Warranties and Servicing Agreement, the Custodial Agreement, the endorsements to
the Mortgage Notes and the assignments of the Mortgages represents the legal and
valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the Seller's
Warranties and Servicing Agreement, the Custodial Agreement or the sale and
delivery of the Mortgage Loans or the consummation of the transactions
contemplated by the Seller's Warranties and Servicing Agreement and the
Custodial Agreement; or (ii) any required consent, approval, authorization or
order has been obtained by the Company.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Seller's Warranties and Servicing Agreement and
the Custodial Agreement, will conflict with or results in or will result in a
breach of or constitutes or will constitute a default under the charter or
by-laws of the Company, the terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is bound or to which
it is subject, or violates any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory body to
which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to
the best of my knowledge, threatened against the Company which, in my opinion,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Company or in any material impairment of the right or ability of
the Company to carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would draw into question
the validity of the Seller's Warranties and Servicing Agreement, and the
Custodial Agreement, or of any action taken or to be taken in connection with
the transactions contemplated thereby, or which would be likely to impair
materially the ability of the Company to perform under the terms of the Seller's
Warranties and Servicing Agreement and the Custodial Agreement.
9. For purposes of the foregoing, I have not regarded any legal or
governmental actions, investigations or proceedings to be "threatened" unless
the potential litigant or governmental authority has manifested to the legal
department of the Company or an employee of the Company responsible for the
receipt of process a present intention to initiate such proceedings; nor have I
regarded any legal or governmental actions, investigations or proceedings as
including those that are conducted by state or federal authorities in connection
with their routine regulatory activities. The sale of each Mortgage Note and
Mortgage as and in the manner contemplated by the Seller's Warranties and
Servicing Agreement is sufficient fully to transfer all right, title and
interest of the Company thereto as noteholder and mortgagee, apart from the
rights to service the Mortgage Loans pursuant to the Seller's Warranties and
Servicing Agreement.
10. The form of endorsement that is to be used with respect to the
Mortgage Loans is legally valid and sufficient to duly endorse the Mortgage
Notes to the Purchaser. Upon the completion of the endorsement of the Mortgage
Notes and the completion of the assignments of the Mortgages, and the recording
thereof, the endorsement of the Mortgage Notes, the delivery to the Custodian of
the completed assignments of the Mortgages, and the delivery of the original
endorsed Mortgage Notes to the Custodian would be sufficient to permit the
entity to which such Mortgage Note is initially endorsed at the Purchaser's
direction, and to whom such assignment of Mortgages is initially assigned at the
Purchaser's direction, to avail itself of all protection available under
Applicable Law against the claims of any present or future creditors of the
Company, and would be sufficient to prevent any other sale, transfer,
assignment, pledge or hypothecation of the Mortgages and the Mortgage Notes by
the Company from being enforceable, such that in a properly presented and argued
case under title 11, United States Code (the "Bankruptcy Code"), in which the
Company were the debtor, a bankruptcy court having jurisdiction over the Company
would consider the transfer of the Mortgage Loans from the Company to the
Purchaser to be a true sale of the Mortgage Loans from the Company to the
Purchaser and not a secured loan by the Purchaser to the Company and,
accordingly, the Mortgage Loans and the payments and other collections thereon
(other than those at any given time that may be commingled with unrelated funds
held by the Company) and the proceeds thereof transferred to the Purchaser by
the Company in accordance with the Company's Warranties and Servicing Agreement
would not be deemed property of the Company's estate for purposes of Section 541
of the Bankruptcy Code or be subject to the automatic stay provisions of Section
362 of the Bankruptcy Code.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Sincerely,
EXHIBIT E
ITEMS TO BE INCLUDED IN MONTHLY REMITTANCE ADVICE
On the related Closing Date, the Company shall deliver to the Purchaser an
initial set-up report (the "Initial Set-up Report"), dated as of the related
Cut-off Date, which shall set forth certain information regarding the Mortgage
Pool. Such information shall include, without limitation, the principal balance
of each Mortgage Loan, the interest rate, delinquency status and any other
information requested by the Purchaser. For each month after the related Closing
Date, the Company shall provide a monthly remittance advice report (the "Monthly
Remittance Advice Reports") to the Purchaser, which shall set forth for each
Mortgage Loan, the trial balance, interest rate, delinquency, foreclosure and
related default information, and such other information as may be requested by
the Purchaser. The Initial Set-up Report and the Monthly Remittance Advice
Reports will be delivered in an Excel format or in such other electronic format
as agreed to by the parties. Each Initial Set-up Report and Monthly Remittance
Advice Report shall contain only such information as is readily available to the
Company and is mutually agreed to by Company and the Purchaser.
EXHIBIT F
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT made this _____ day of
__________________, 200_, among ▇▇▇▇▇ Fargo Bank, N.A., a ____________________
(the "Servicer"), _________________________ a ________________________ (the
"Assignee"), and _____________________________, a _______________________ (the
"Assignor).
WHEREAS, ▇▇▇▇▇▇▇ Sachs Mortgage Company and the Servicer have
entered into a certain Master Seller's Warranties and Servicing Agreement dated
as of August 1, 2004 (the "Servicing Agreement"), pursuant to which the Servicer
sold certain mortgage loans listed on the mortgage loan schedule attached as an
exhibit to the Servicing Agreement;
WHEREAS, the Assignee has agreed on certain terms and conditions to
purchase from the Assignor certain mortgage loans (the "Mortgage Loans"), which
Mortgage Loans are subject to the provisions of the Servicing Agreement and are
listed on the mortgage loan schedule attached as Exhibit 1 hereto (the "Mortgage
Loan Schedule");
WHEREAS, pursuant to a Trust Agreement, dated as of [______ __],
200__ (the "Trust Agreement"), between GS Mortgage Securities Corp., as
Depositor, and [______], as Trustee (the "Trustee"), the Assignee will transfer
the Mortgage Loans to the Trustee, together with the Assignee's rights in the
Sale and Servicing Agreement;
NOW THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Assignment and Assumption.
(a) The Assignor hereby assigns to the Assignee all of its
right, title and interest in and to the Mortgage Loans and Servicing Agreement,
to the extent relating to the Mortgage Loans (other than the rights of the
Assignor to indemnification thereunder), and the Assignee hereby assumes all of
the Assignor's obligations under the Servicing Agreement, to the extent relating
to the Mortgage Loans from and after the date hereof, and the Servicer hereby
acknowledges such assignment and assumption and hereby agrees to the release of
the Assignor from any obligations under the Servicing Agreement from and after
the date hereof, to the extent relating to the Mortgage Loans. Notwithstanding
the foregoing, it is understood that the Assignor is not released from liability
for any breaches of the representations and warranties made in Section 3.6 of
the Servicing Agreement, and the Assignee is not undertaking any such liability
hereunder.
(b) The Assignor represents and warrants to the Assignee that
the Assignor has not taken any action which would serve to impair or encumber
the Assignor's ownership interest in the Mortgage Loans since the date of the
Servicing Agreement.
(c) The Servicer and the Assignor shall have the right to
amend, modify or terminate the Servicing Agreement without the joinder of the
Assignee with respect to mortgage loans not conveyed to the Assignee hereunder,
provided, however, that such amendment, modification or termination shall not
affect or be binding on the Assignee.
2. Accuracy of Servicing Agreement.
The Servicer and the Assignor represent and warrant to the Assignee
that (i) attached hereto as Exhibit 2 is a true, accurate and complete copy of
the Servicing Agreement, (ii) the Servicing Agreement is in full force and
effect as of the date hereof, (iii) the Servicing Agreement has not been amended
or modified in any respect and (iv) no notice of termination has been given to
the Servicer under the Servicing Agreement.
3. Recognition of Purchaser.
From and after the date hereof, the Servicer shall note the transfer
of the Mortgage Loans to the Assignee in its books and records, shall recognize
the Assignee as the owner of the Mortgage Loans and shall service the Mortgage
Loans for the benefit of the Assignee pursuant to the Servicing Agreement, the
terms of which are incorporated herein by reference. It is the intention of the
Assignor, Servicer and Assignee that the Servicing Agreement shall be binding
upon and inure to the benefit of the Servicer and the Assignee and their
successors and assigns.
4. Representations and Warranties of the Assignee. The Assignee
hereby represents and warrants to the Assignor as follows:
(a) Decision to Purchase. The Assignee represents and warrants
that it is a sophisticated investor able to evaluate the risks and merits of the
transactions contemplated hereby, and that it has not relied in connection
therewith upon any statements or representations of the Assignor or the Servicer
other than those contained in the Servicing Agreement or this Agreement.
(b) Authority. The Assignee hereto represents and warrants
that it is duly and legally authorized to enter into this Agreement and to
perform its obligations hereunder and under the Servicing Agreement.
(c) Enforceability. The Assignee hereto represents and
warrants that this Agreement has been duly authorized, executed and delivered by
it and (assuming due authorization, execution and delivery thereof by each of
the other parties hereto) constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
5. Representations and Warranties of the Assignor. The Assignor
hereby represents and warrants to the Assignee as follows:
(a) The Assignor has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the State
of New York with full power and authority (corporate and other) to enter into
and perform its obligations under the Servicing Agreement and this Assignment
Agreement.
(b) This Assignment Agreement has been duly executed and
delivered by the Assignor, and, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a legal, valid, and
binding agreement of the Assignor, enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium, or other
similar laws affecting creditors' rights generally and to general principles of
equity regardless of whether enforcement is sought in a proceeding in equity or
at law.
(c) The execution, delivery and performance by the Assignor of
this Assignment Agreement and the consummation of the transactions contemplated
thereby 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 such as has been
obtained, given, effected or taken prior to the date thereof.
(d) The execution and delivery of this Assignment Agreement
have been duly authorized by all necessary corporate action on the part of the
Assignor; neither the execution and delivery by the Assignor of this Assignment
Agreement, nor the consummation by the Assignor of the transactions therein
contemplated, nor compliance by the Assignor with the provisions thereof, will
conflict with or result in a breach of, or constitute a default under, any of
the provisions of the governing documents of the Assignor or any law,
governmental rule or regulation or any material judgment, decree or order
binding on the Assignor or any of its properties, or any of the provisions of
any material indenture, mortgage, deed of trust, contract or other instrument to
which the Assignor is a party or by which it is bound.
(e) There are no actions, suits or proceedings pending or, to
the knowledge of the Assignor, threatened, before or by any court,
administrative agency, arbitrator or governmental body (A) with respect to any
of the transactions contemplated by this Assignment Agreement or (B) with
respect to any other matter that in the judgment of the Assignor will be
determined adversely to the Assignor and will if determined adversely to the
Assignor materially adversely affect its ability to perform its obligations
under this Assignment Agreement.
(f) Except for the sale to the Assignee, the Assignor has not
assigned or pledged any Mortgage Note or the related Mortgage or any interest or
participation therein.
(g) The Assignor has not satisfied, canceled, or subordinated
in whole or in part, or rescinded the Mortgage, and the Assignor has not
released the Mortgaged Property from the lien of the Mortgage, in whole or in
part, nor has the Assignor executed an instrument that would effect any such
release, cancellation, subordination, or rescission. The Assignor has not
released any Mortgagor, in whole or in part, except in connection with an
assumption agreement or other agreement approved by the related Federal Insurer,
to the extent such approval was required.
It is understood and agreed that the representations and warranties
set forth in this Section 5 shall survive delivery of the respective Mortgage
Files to the Custodian and shall inure to the benefit of the Assignee and its
assigns notwithstanding any restrictive or qualified endorsement or assignment.
Upon the discovery by the Assignor or the Assignee and its assigns of a breach
of the foregoing representations and warranties, the party discovering such
breach shall give prompt written notice to the other parties to this Assignment
Agreement, and in no event later than two (2) Business Days from the date of
such discovery. It is understood and agreed that the obligations of the Assignor
set forth in Section 6 to repurchase a Mortgage Loan constitute the sole
remedies available to the Assignee and its assigns on their behalf respecting a
breach of the representations and warranties contained in this Section 5. It is
further understood and agreed that the Assignor shall be deemed not to have made
the representations and warranties in this Section 5 with respect to, and to the
extent of, representations and warranties made, as to the matters covered in
this Section 5, by the Servicer in the Servicing Agreement (or any officer's
certificate delivered pursuant thereto).
It is understood and agreed that the Assignor has made no
representations or warranties to the Assignee other than those contained in this
Section 5, and no other affiliate of the Assignor has made any representations
or warranties of any kind to the Assignee.
6. Repurchase of Mortgage Loans.
Upon discovery or notice of any breach by the Assignor of any
representation, warranty, or covenant under this Assignment Agreement that
materially and adversely affects the value of any Mortgage Loan or the interest
of the Assignee therein (it being understood that any such defect or breach
shall be deemed to have materially and adversely affected the value of the
related Mortgage Loan or the interest of the Assignee therein if the Assignee
incurs a loss as a result of such defect or breach), the Assignee promptly shall
request that the Assignor cure such breach and, if the Assignor does not cure
such breach in all material respects within 60 days from the date on which it is
notified of the breach, the Assignee may enforce the Assignor's obligation
hereunder to purchase such Mortgage Loan from the Assignee. Notwithstanding the
foregoing, however, if such breach is a Qualification Defect, such cure or
repurchase must take place within 75 days of the Defect Discovery Date.
In the event the Servicer has breached a representation or warranty
under the Servicing Agreement that is substantially identical to a
representation or warranty breached by the Assignor hereunder, the Assignee
shall first proceed against the Servicer. If the Servicer does not within 60
days after notification of the breach, take steps to cure such breach (which may
include certifying to progress made and requesting an extension of the time to
cure such breach, as permitted under the Servicing Agreement) or purchase, or
substitute for the Mortgage Loan, the Trustee shall be entitled to enforce the
obligations of the Assignor hereunder to cure such breach or to purchase the
Mortgage Loan from the Trust. In such event, the Assignor shall succeed to the
rights of the Assignee to enforce the obligations of the Servicer to cure such
breach or repurchase such Mortgage Loan under the terms of the related Servicing
Agreement with respect to such Mortgage Loan
Except as specifically set forth herein, the Assignee shall have no
responsibility to enforce any provision of this Assignment Agreement, to oversee
compliance hereof, or to take notice of any breach or default thereof.
7. Continuing Effect.
Except as contemplated hereby, the Servicing Agreement shall remain
in full force and effect in accordance with its terms.
8. Governing Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
9. Notices.
Any notices or other communications permitted or required hereunder
or under the Servicing Agreement shall be in writing and shall be deemed
conclusively to have been given if personally delivered at or mailed by
registered mail, postage prepaid, and return receipt requested or transmitted by
telex, telegraph or telecopier and confirmed by a similar mailed writing, to:
(i) in the case of the Servicer, [_________________, ____________________] or
such address as may hereafter be furnished by the Servicer; (ii) in the case of
the Assignee, _______________, _______________, Attention: ________________, or
such other address as may hereafter be furnished by the Assignee, and (iii) in
the case of the Assignor, __________________, Attention: _________________, or
such other address as may hereafter be furnished by the Assignor.
10. Counterparts.
This Agreement may be executed in counterparts, each of which when
so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same instrument.
11. Definitions.
Any capitalized term used but not defined in this Agreement has the
same meaning as in the Servicing Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
ASSIGNEE:
By:
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Name:
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Title:
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ASSIGNOR:
By:
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Name:
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Title:
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Acknowledged by:
SERVICER:
By:
------------------------------
Name:
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Title:
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EXHIBIT G
FORM OF COMPANY OFFICER'S CERTIFICATE
I, ______________________, hereby certify that I am a duly elected [Vice
President] of ▇▇▇▇▇ Fargo Bank, N.A., a national banking association organized
under the laws of the United States (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy of
the articles of association of the Company which is in full force and effect on
the date hereof.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy of
the bylaws of the Company which are in effect on the date hereof.
3. The execution and delivery by the Company of the Seller's Warranties
and Servicing Agreement, dated as of August 1, 2004 (the "Sale and Servicing
Agreement") and the Custodial Agreement, dated as of August 1, 2004 (the
"Custodial Agreement" and, together with the Sale and Servicing Agreement, the
"Agreements") are in the ordinary course of business of the Company.
4. A true and correct copy of the resolution of the Mortgage Banking
Committee of the Board of Directors of the Company authorizing the Company to
enter into the Agreements is attached hereto as Exhibit 3.
5. Each person who, as an officer or representative of the Company, signed
(a) the Sale and Servicing Agreement, or (b) any other document delivered prior
hereto or on the date hereof in connection with any transaction described in the
Agreements was, at the respective times of such signing and delivery a duly
elected or appointed, qualified and acting officer or representative of the
Company and the signatures of such persons appearing on such documents are their
genuine signatures.
6. No proceedings for dissolution, merger, consolidation, liquidation,
conservatorship or receivership of the Company or for the sale of all or
substantially all of its assets is pending, or to my knowledge threatened, and
no such proceeding is contemplated by the Company.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
the Company.
Dated: By:
Title: Vice President
I, __________________ the Secretary of __________________________, hereby
certify that _______________________ is a duly elected and acting Vice President
of the Company and that the signature appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
Title: Secretary
EXHIBIT H
FORM OF ANNUAL CERTIFICATION
I, ______________________, Vice President of ▇▇▇▇▇ Fargo Bank, N.A. (the
"Servicer"), certify to __________________, and its officers, directors, agents
and affiliates (in its role as ____________, the "____________"), and with the
knowledge and intent that they will rely upon this certification, that:
(i) Based on my knowledge, the information relating to the Mortgage Loans and
the servicing thereof submitted by the Servicer to the ___________ which is used
in connection with preparation of the reports on Form 8-K and the annual report
on Form 10-K filed with the Securities and Exchange Commission with respect to
each transaction listed on the attached Exhibit A, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the date of this certification;
(ii) The servicing information required to be provided to the _____________ by
the Servicer under the relevant servicing agreements has been provided to the
______________;
(iii) I am responsible for reviewing the activities performed by the Servicer
under the relevant servicing agreements and based upon the review required by
the relevant servicing agreements, and except as disclosed in the Annual
Statement of Compliance, the Annual Independent Public Accountant's Servicing
Report and all servicing reports, officer's certificates and other information
relating to the servicing of the Mortgage Loans submitted to the ___________,
the Servicer has, as of the date of this certification fulfilled its obligations
under the relevant servicing agreements; and
(iv) I have disclosed to the ___________ all significant deficiencies relating
to the Servicer's compliance with the minimum servicing standards in accordance
with a review conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar standard as set forth in the relevant
servicing agreements.
(v) The Servicer shall indemnify and hold harmless the ___________ and its
officers, directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Servicer or any of its officers, directors, agents or affiliates of its
obligations under this Certification or the negligence, bad faith or willful
misconduct of the Servicer in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the
___________, then the Servicer agrees that it shall contribute to the amount
paid or payable by the ___________ as a result of the losses, claims, damages or
liabilities of the ___________ in such proportion as is appropriate to reflect
the relative fault of the ___________ on the one hand and the Servicer on the
other in connection with a breach of the Servicer's obligations under this
Certification or the Servicer's negligence, bad faith or willful misconduct in
connection therewith.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Servicer.
Dated: By:
Name:
Title:
EXECUTION COPY
AMENDMENT NO. 1 TO
MASTER SELLER'S WARRANTIES AND SERVICING AGREEMENT
This AMENDMENT NO. 1 TO MASTER SELLER'S WARRANTIES AND SERVICING
AGREEMENT ("Amendment No. 1") dated as of April 26, 2005, by and between ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Company (the "Purchaser") and ▇▇▇▇▇ Fargo Bank, N.A. (the
"Company").
WHEREAS, the Purchaser and the Company have entered into a Master
Seller's Warranties and Servicing Agreement (the "Master SWSA"), dated as of
August 1, 2004, which prescribes the manner of purchase, conveyance, servicing
and control of certain Mortgage Loans purchased by the Purchaser from the
Company from time to time;
WHEREAS, the Purchaser and the Company wish to amend provisions of
the Master SWSA as provided herein; and
WHEREAS, capitalized terms not otherwise defined herein shall have
the meanings set forth in the Master SWSA.
NOW THEREFORE, in consideration of the mutual promises set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Company
agree as follows:
1. The following definitions are inserted alphabetically into
Article I of the Master SWSA:
(a) "Agency/Agencies: ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, or any of them as
applicable."
(b) "Agency Transfer: Any sale or transfer of some or all of the
Mortgage Loans by the Purchaser to an Agency which sale or
transfer is not a Pass-Through Transfer or Whole Loan
Transfer."
(c) "Lender Paid Mortgage Insurance Policy or LPMI Policy: A PMI
Policy for which the Company pays all premiums from its own
funds, without reimbursement therefor."
(d) "LPMI Proceeds: Proceeds of any Lender Paid Mortgage Insurance
Policy."
2. The definition of "Whole Loan Transfer" in Article I of the
Master SWSA is amended by inserting the language "or Agency Transfer" at the end
of the definition immediately following "Pass-Through Transfer".
3. The definition of "Servicing Fee" is deleted in its entirety from
Article I of the Master SWSA and replaced with the following:
"With respect to each Mortgage Loan, the amount of the per annum fee
the Purchaser shall pay to the Company, which shall, for a period of
one full month, be equal to one-twelfth of the product of (a) the
Servicing Fee Rate and (b) the unpaid principal balance of such
Mortgage Loan. The obligation of the Purchaser to pay the Servicing
Fee is limited to, and the Servicing Fee is payable solely from, the
interest portion (including recoveries with respect to interest from
Liquidation Proceeds, to the extent permitted by this Agreement) of
such Monthly Payment collected by the Company, or as otherwise
provided under this Agreement. The Servicing Fee shall be payable
monthly, computed on the basis of the same principal amount and same
period for which any related interest payment on a Mortgage Loan is
received."
4. Section 3.1(viii) in Article III of the Master SWSA is amended by
inserting the language "and fixed rate" immediately following "outstanding
adjustable rate".
5. Section 3.2 (iv) in Article III of the Master SWSA is hereby
amended and restated as follows:
"(iv) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the
interests of the Purchaser, the related Mortgage Note has been
delivered to the Purchaser. The substance of any such waiver,
alteration or modification has been approved by the mortgage
insurer, if the Mortgage Loan is insured, the title insurer, to the
extent required by the policy, and its terms are reflected on the
Mortgage Loan Schedule. No Mortgagor has been released, in whole or
in part. No Mortgage Loan has been modified so as to restructure the
payment obligations or re-age the Mortgage Loan;"
6. Section 3.2(xxxii) in Article III of the Master SWSA is replaced
with the following:
"Primary Mortgage Insurance.
Except as set forth on the related Data File, each Mortgage Loan
with an LTV at origination in excess of 80% will be subject to a
Primary Mortgage Insurance Policy or Lender Paid Mortgage Insurance
Policy, issued by an insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, in at least such amounts as are required by ▇▇▇▇▇▇▇ Mac or
▇▇▇▇▇▇ ▇▇▇. All provisions of such Primary Mortgage Insurance Policy
or Lender Paid Mortgage Insurance Policy have been and are being
complied with, such policy is in full force and effect, and all
premiums due thereunder have been paid. Any Mortgage subject to any
such Primary Mortgage Insurance Policy or Lender Paid Mortgage
Insurance Policy obligates the Mortgagor or Company, as applicable,
to maintain such insurance and to pay all premiums and charges in
connection therewith unless terminable in accordance with ▇▇▇▇▇▇▇
Mac or ▇▇▇▇▇▇ ▇▇▇ standards or Applicable Law;"
7. The third paragraph of Section 3.3 in Article III of the Master
SWSA is amended and restated as follows:
"Notwithstanding the above paragraphs, within 60 days of the earlier
of either discovery by, or notice to, the Company of any breach of
the representations or warranties set forth in clauses, (xxxviii)
and (xl) of Section 3.2, the Company shall repurchase such Mortgage
Loan at the Repurchase Price."
8. The first paragraph in Section 4.2 in Article IV of the Master
SWSA is amended by inserting ", and (4) is consistent with any related PMI
Policy or LPMI Policy" immediately following "(3) the Company shall determine
prudently to be in the best interest of Purchaser".
9. The second paragraph of Section 4.4 in Article IV of the Master
SWSA is amended by replacing the language "clauses (iii) through (v)" with
"clauses (3) through (5)".
10. Section 4.11 in Article IV of the Master SWSA is amended by
inserting "Lender Paid Mortgage Insurance Policy" immediately after each
instance "Primary Mortgage Insurance Policy" is used, except for the second and
third instances, within such section.
11. Section 4.11 in Article IV of the Master SWSA is further amended
by inserting the following sentence as the sixth sentence of such section:
"The Company will maintain or cause to be maintained in full force
and effect any LPMI Policy issued by a Qualified Insurer with
respect to each Mortgage Loan for which such coverage is in
existence or is obtained."
12. Section 6.3 in Article VI of the Master SWSA is amended by
replacing the first paragraph in its entirety with the following:
"As compensation for its services hereunder, the Company shall be
entitled to withdraw from the Custodial Account or to retain from
interest payments on the Mortgage Loans the amount of its Servicing
Fee. The Servicing Fee shall be computed on the basis of the unpaid
principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of
the Purchaser to pay the Servicing Fee is limited to, and payable
solely from, the interest portion of such Monthly Payments."
13. Each reference to "Whole Loan Transfers or Pass-Through
Transfers" in Section 9.1 in Article IX of the Master SWSA is amended and
replaced with "Whole Loan Transfers, Agency Transfers or Pass-Through
Transfers".
14. Section 12.5(i) in Article XII of the Master SWSA is hereby
amended by replacing the reference to "▇▇▇▇▇▇ ▇▇▇▇, MAC X3906-012" with
"Structured Finance Manager, MAC X3906-012".
15. Section 9.1 in Article IX of the Master SWSA is further amended
by inserting the following as the last paragraph of said section:
"All Mortgage Loans (i) not sold or transferred pursuant to Whole
Loan Transfers, Agency Transfers or Pass-Through Transfers or (ii)
that are subject to a Securitization for which the related trust is
terminated for any reason, shall remain subject to this Agreement
and shall continue to be serviced in accordance with the terms of
this Agreement and with respect thereto this Agreement shall remain
in full force and effect."
16. Except as modified by this Amendment No. 1, all terms,
conditions, representations and warranties of the Master SWSA shall remain in
full force and effect. If any term or condition of this Amendment No. 1 is in
conflict with any term or condition of the Master SWSA, the terms of this
Amendment No. 1 shall control.
17. This Amendment No. 1 may be executed simultaneously in any
number of counterparts. Each counterpart shall be deemed to be an original, and
all such counterparts shall constitute one and the same instrument.
18. This Amendment No. 1 shall be construed in accordance with the
laws of the State of New York, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
19. This Amendment No. 1 shall inure to the benefit of and be
binding upon the Purchaser and the Servicer under the Master SWSA, and their
respective successors and permitted assigns.
[Signatures Follow]
IN WITNESS WHEREOF, the Company, the Assignee and the Purchaser have
caused their names to be signed to the Amendment No. 1 by their respective
officers, duly authorized as of the day and year first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, as
Purchaser
By: ▇▇▇▇▇▇▇ Sachs Real Estate Funding
Corp., its General Partner
By:
--------------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK, N.A., as Company
By:
--------------------------------------
Name:
Title:
EXHIBIT N
MASTER MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT, DATED MARCH
24, 2004, BETWEEN ▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY AND FIRST NATIONAL BANK OF
NEVADA
MASTER MORTGAGE LOAN PURCHASE AND
INTERIM SERVICING AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
Purchaser
and
FIRST NATIONAL BANK OF NEVADA
Company
Dated as of March 24, 2004
Fixed and Variable Rate Mortgage Loans
MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT
This MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT (the
"Agreement"), is dated as of March 24, 2004, by and between ▇▇▇▇▇▇▇ Sachs
Mortgage Company, having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
10004(the "Purchaser") and First National Bank of Nevada, having an office at
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Company, from time to time, certain
conventional fixed and variable rate residential first lien mortgage loans as
described herein, including all Servicing Rights (as defined below) related
thereto (the "Mortgage Loans") which shall be delivered as whole loans;
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the related Mortgage Loan Schedule,
which is annexed to the related Term Sheet;
WHEREAS, the Purchaser and the Company wish to prescribe the manner
of the conveyance, interim servicing and control of the Mortgage Loans.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Company agree as follows:
SECTION 1. Definitions: For purposes of this Agreement the following
capitalized terms shall have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices (including collection procedures) of prudent
mortgage banking institutions which service mortgage loans of the same type as
the Mortgage Loans in the jurisdiction where the related Mortgaged Property is
located.
Adjustment Date: With respect to each adjustable rate Mortgage Loan,
the date set forth in the related Mortgage Note on which the Mortgage Interest
Rate on the Mortgage Loan is adjusted in accordance with the terms of the
Mortgage Note.
Agreement: This Mortgage Loan Purchase and Interim Servicing
Agreement including all exhibits, schedules, amendments and supplements hereto.
Appraised Value: With respect to any Mortgaged Property, the lesser
of (i) the value thereof as determined by an appraisal made for the originator
of the Mortgage Loan at the time of origination of the Mortgage Loan by a
Qualified Appraiser, and (ii) the purchase price paid for the related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan, provided,
however, in the case of a Refinanced Mortgage Loan, such value of the Mortgaged
Property is based solely upon the value determined by an appraisal made for the
originator of such Refinanced Mortgage Loan at the time of origination of such
Refinanced Mortgage Loan by a Qualified Appraiser.
Assignment of Mortgage: An individual assignment of Mortgage, notice
of transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
give record notice of the sale of the Mortgage to the Purchaser. None of the
assignments of Mortgage will be "blanket" assignments of Mortgage.
Business Day: Any day other than a Saturday or Sunday, or a day on
which banking and savings and loan institutions in the State of New York or in
the State of Arizona are authorized or obligated by law or executive order to be
closed.
Cash-Out Refinancing: A Refinanced Mortgage Loan the proceeds of
which were in excess of the principal balance of any existing first mortgage on
the related Mortgaged Property and related closing costs, and were used to pay
any such existing first mortgage, related closing costs and subordinate
mortgages on the related Mortgaged Property.
Closing Date: With respect to any Mortgage Loan, the date stated on
the related Term Sheet.
Closing Documents: The documents required pursuant to Section 9.
Company: First National Bank of Nevada, their successors in interest
and assigns, as permitted by this Agreement.
Company's Officer's Certificate: A certificate signed by the
Chairman of the Board, President, any Vice President or Treasurer of the Company
stating the date by which Company expects to receive any missing documents sent
for recording from the applicable recording office.
Condemnation Proceeds: All awards, compensation and settlements in
respect of a taking of all or part of a Mortgaged Property by exercise of the
power of condemnation or the right of eminent domain.
Confirmation: The Trade Confirmation Letter between the Purchaser
and the Company which relates to the Mortgage Loans.
Current Appraised Value: With respect to any Mortgaged Property, the
value thereof as determined by an appraisal made for the Company (by a Qualified
Appraiser) at the request of a Mortgagor for the purpose of canceling a Primary
Mortgage Insurance Policy in accordance with federal, state and local laws and
regulations.
Current LTV: The ratio of the Stated Principal Balance of a Mortgage
Loan to the Current Appraised Value of the Mortgaged Property.
Custodial Account: Each separate account or accounts, each of which
shall be an Eligible Account, created and maintained pursuant to this Agreement,
which shall be entitled "First National Bank of Nevada, in trust for the
[Purchaser], Owner of Mortgage Loans, P&I Account," and shall be established in
an Eligible Account, in the name of the Person that is the "Purchaser" with
respect to the related Mortgage Loans.
Cut-off Date: With respect to any Mortgage Loan, the date stated on
the related Term Sheet.
Due Date: The day on which the Monthly Payment is due on a Mortgage
Loan, exclusive of any days of grace which day is the first day of the month.
Eligible Account: An account established and maintained: (i) within
FDIC insured accounts created or (ii) as a trust account with the corporate
trust department of a depository institution or trust company organized under
the laws of the United States of America or any one of the states thereof or the
District of Columbia which is not affiliated with the Company (or any
sub-servicer).
Escrow Account: Each separate trust account or accounts created and
maintained pursuant to this Agreement which shall be entitled "First National
Bank of Nevada, in trust for the [Purchaser], Owner of Mortgage Loans, and
various Mortgagors, T&I Account," and shall be established in an Eligible
Account, in the name of the Person that is the "Purchaser" with respect to the
related Mortgage Loans.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water charges, sewer rents, mortgage insurance premiums, fire and
hazard insurance premiums and other payments as may be required to be escrowed
by the Mortgagor with the Mortgagee pursuant to the terms of any Mortgage Note
or Mortgage.
Event of Default: Any one of the events enumerated in Subsection
13.01.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇ or any successor thereto.
▇▇▇▇▇▇ Mae Guide(s): The ▇▇▇▇▇▇ ▇▇▇ Selling Guide and the ▇▇▇▇▇▇ Mae
Servicing Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation or any
successor thereto.
▇▇▇▇▇▇▇ Mac Guide: The ▇▇▇▇▇▇▇ Mac Single Family Seller/Servicer
Guide and all amendments or additions thereto.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
act of 1989, as amended and in effect from time to time.
GAAP: Generally accepted accounting principles, consistently
applied.
Gross Margin: With respect to each adjustable rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note and the
related Mortgage Loan Schedule that is added to the Index on each Adjustment
Date in accordance with the terms of the related Mortgage Note to determine the
new Mortgage Interest Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994 ("HOEPA") or (b) a
"high cost," "threshold," "high risk home," "covered" (other than New Jersey or
North Carolina "covered" loans), "predatory" or similar loan under any other
applicable state, federal or local law, including any predatory or abusive
lending laws (or a similarly classified loan using different terminology under a
law imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees, or
(c) in violation of any state or local law or ordinance similar to HOEPA.
HMDA: The Home Mortgage Disclosure Act, as amended.
Index: With respect to each adjustable rate Mortgage Loan, the index
identified on the related Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating the interest rate thereon.
Initial Rate Cap: With respect to each adjustable rate Mortgage Loan
and the first Adjustment Date after the Origination Date, a number of percentage
points per annum that is set forth in the related Mortgage Loan Schedule and in
the related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Mortgage Loan may increase (without regard to the Maximum
Mortgage Interest Rate) or decrease (without regard to the Minimum Mortgage
Interest Rate) on such Adjustment Date from the Mortgage Interest Rate in effect
immediately prior to such Adjustment Date.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
any insurance policy insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Paid to Date: With respect to a Mortgage Loan, the last
date to which interest has been paid on such Mortgage Loan, as shown on the
books and records of Company as of the related Cut-off Date.
Interim Servicing Period: With respect to any Mortgage Loan, the
period during which the Company shall service the Mortgage Loans in accordance
with the provisions of this Agreement, commencing on the related Closing Date
and ending on the related Servicing Transfer Date.
Lifetime Rate Cap: As to each adjustable rate Mortgage Loan, the
maximum Mortgage Interest Rate over the term of such Mortgage Loan.
Liquidation Proceeds: Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received in connection with the liquidation of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale or otherwise,
other than amounts received following the acquisition of REO Property.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan as of
origination, the ratio on such date of the outstanding principal amount of the
Mortgage Loan to the lesser of the Appraised Value of the Mortgaged Property as
of the Origination Date or the purchase price of the Mortgaged Property.
Maximum Mortgage Interest Rate: With respect to each adjustable rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the maximum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be increased on any Adjustment
Date.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Minimum Mortgage Interest Rate: With respect to each adjustable rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the minimum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be decreased on any Adjustment
Date.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
combined payment of principal and interest payable by a Mortgagor under the
related Mortgage Note on each Due Date.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and
the successors and assigns of such mortgagee or beneficiary.
Mortgage File: With respect to each Mortgage Loan, the file
consisting of the Mortgage Loan Documents and originals of all other documents
referred to in Exhibit 2 annexed hereto and any additional documents related to
the origination of a particular Mortgage Loan and all documents, files and other
information necessary to service the Mortgage Loans.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note.
Mortgage Loan: Each mortgage loan sold, assigned and transferred to
the Purchaser pursuant to this Agreement and identified on the related Mortgage
Loan Schedule attached to the related Term Sheet, which Mortgage Loan includes
without limitation the Servicing Rights, the Mortgage File, the Monthly
Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, REO Disposition proceeds, and all other rights, benefits,
proceeds and obligations arising from or in connection with such mortgage loan.
Mortgage Loan Documents: The documents listed in Subsection 6.03
pertaining to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans annexed to
the related Term Sheet (which shall also be provided in an electronic format
acceptable to Purchaser), such schedule setting forth the following information
with respect to each Mortgage Loan: (1) the Company's Mortgage Loan identifying
number; (2) the Mortgagor's first and last name; (3) the street address of the
Mortgaged Property including the city, state and zip code; (4) a code indicating
whether the Mortgaged Property is owner-occupied, a second home or investor
property; (5) the type of Residential Dwelling constituting the Mortgaged
Property; (6) a code indicating the purpose of the loan (i.e., purchase
financing, Rate/Term Refinancing, Cash-Out Refinancing); (7) the original
principal amount of the Mortgage Loan; (8) the Mortgage Interest Rate at
origination; (9) the date on which the first Monthly Payment was due on the
Mortgage Loan; (10) the stated maturity date; (11) the amount of the Monthly
Payment at origination; (12) the original months to maturity; (13) the
Origination Date of the Mortgage Loan and the remaining months to maturity from
the Cut-off Date, based on the original amortization schedule; (14) the last Due
Date on which a Monthly Payment was actually applied to the unpaid Stated
Principal Balance; (15) the Mortgage Interest Rate in effect immediately
following the Cut-off Date; (16) the Stated Principal Balance of the Mortgage
Loan as of the Cut-off Date; (17) the amount of the Monthly Payment as of the
Cut-off Date; (18) the sales price of the Mortgaged Property, if applicable, the
Appraised Value and the Loan-to-Value Ratio at origination; (19) the Current
Appraised Value and Current LTV, if applicable; (20) a code indicating the
documentation type; (21) credit score and/or mortgage score, each if applicable;
(22) a code indicating whether or not the Mortgage Loan is the subject of
Primary Mortgage Insurance Policy and the name of the related; (23) loan type
(i.e. fixed, adjustable, 3/1 ARM, etc.); (24) whether the Mortgage Loan is
classified as a high cost loan under Section 32 of the Home Ownership and Equity
Protection Act of 1994; (25) for any adjustable rate Mortgage Loan, the first
Adjustment Date after the Origination Date, the Adjustment Date next following
the Cut-off Date, the Index, the Gross Margin, the Initial Rate Cap, if any, the
Periodic Rate Cap, if any, the Lifetime Rate Cap, if any, the Minimum Mortgage
Interest Rate and the Maximum Mortgage Interest Rate; (26) a code indicating
whether or not each Mortgage Loan has a prepayment penalty and if so, the amount
and duration of such penalty; (27) reserved; (28) the debt-to-income ratio; (29)
a code indicating whether or not the Mortgage Loan is a buydown loan; (30) a
code indicating whether or not the Mortgage Loan has "balloon features"; (31) a
code indicating whether the Mortgage Loan is a MERS Mortgage Loan; and (32)
points and fees. With respect to the Mortgage Loans in the aggregate, the
related Mortgage Loan Schedule attached to the related Term Sheet shall set
forth the following information, as of the related Cut-off Date: (1) the number
of Mortgage Loans; (2) the current principal balance of the Mortgage Loans; (3)
the weighted average Mortgage Interest Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the Mortgage Loan
indebtedness of a Mortgagor.
Mortgaged Property: The underlying real property securing repayment
of a Mortgage Note, consisting of a single parcel of real estate considered to
be real estate under the laws of the state in which such real property is
located which may include condominium units and planned unit developments,
improved by a Residential Dwelling.
Mortgagor: The obligor on a Mortgage Note, the owner of the
Mortgaged Property and the grantor or mortgagor named in the related Mortgage
and such grantor's or mortgagor's successor(s) in title to the Mortgaged
Property.
Net Escrow Payments: Escrow Payment balances remaining after
advances by the Company for taxes and insurance to the extent documented under a
detailed statement provided to the Purchaser.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Person on behalf of whom such certificate is being
delivered.
Opinion of Counsel: A written opinion of counsel, who may be
salaried counsel for the Person on behalf of whom the opinion is being given,
reasonably acceptable to each Person to whom such opinion is addressed.
Origination Date: The date on which a Mortgage Loan funded.
Periodic Rate Cap: With respect to each adjustable rate Mortgage
Loan and any Adjustment Date (other than the first Adjustment Date) therefor, a
number of percentage points per annum that is set forth in the related Mortgage
Loan Schedule and in the related Mortgage Note, which is the maximum amount by
which the Mortgage Interest Rate for such Mortgage Loan may increase (without
regard to the Maximum Mortgage Interest Rate) or decrease (without regard to the
Minimum Mortgage Interest Rate) on such Adjustment Date from the Mortgage
Interest Rate in effect immediately prior to such Adjustment Date.
Person: An individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Primary Mortgage Insurance Policy or PMI Policy: Each primary policy
of mortgage insurance issued by a Qualified Insurer and represented to be in
effect pursuant to Section 7.02.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan, full or partial, which is received in advance of its scheduled
Due Date, which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment.
Purchase Price: The price paid by the Purchaser in exchange for the
Mortgage Loans (including the Servicing Rights thereon) purchased on the related
Closing Date, calculated as provided in Section 4.
Purchase Price Percentage: That certain purchase price percentage
specified in the related Term Sheet with respect to the Mortgage Loans, as
adjusted as provided for therein.
Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, a New York limited
partnership, its successors in interest and assigns.
Qualified Appraiser: An appraiser, duly appointed by the Company,
who had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfy the requirements of Title XI of
FIRREA and the regulations promulgated thereunder and the requirements of ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac, and whose claims paying ability is rated in the two highest
rating categories by each applicable Rating Agency with respect to primary
mortgage insurance and in the two highest rating categories in Best's Key Rating
Guide with respect to hazard and flood insurance.
Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds of
which are limited to the sum of the unpaid principal balance of the existing
first mortgage, closing costs (including all prepaid items), points, the amount
required to satisfy any subordinate mortgage liens that are more than one year
old (if the borrower plans to satisfy them), and other funds for the borrower's
use (as long as the amount does not exceed 2% of the principal amount of the new
mortgage or $2,000). A property that has subordinate liens that have been in
existence for one year or less also may be treated as a rate/term refinance
transaction as long as the proceeds of the subordinate lien were used to make
documented home improvements.
Rating Agency: Standard & Poor's, ▇▇▇▇▇'▇, Fitch Ratings or, in the
event that some or all of the ownership of the Mortgage Loans is evidenced by
mortgage-backed securities, the nationally recognized rating agencies issuing
ratings with respect to such securities, if any.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
REO Disposition: The final sale by the Company of any REO Property.
REO Property: A Mortgaged Property acquired as a result of the
liquidation of a Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to (w) the product of the Purchase Price Percentage multiplied by the Stated
Principal Balance of such Mortgage Loan on the repurchase date, plus (x) up to
ninety (90) days' accrued interest on such Stated Principal Balance at the
Mortgage Interest Rate from the last interest paid to date through which
interest has been paid by or on behalf of the Mortgagor through the date prior
to the date of repurchase, less (y) amounts received in respect of such
repurchased Mortgage Loan which are being held in the Custodial Account for
distribution in connection with such Mortgage Loan plus (z) any costs and
damages incurred by the related trust with respect to any securitization of the
Mortgage Loan in connection with any violation by such Mortgage Loan of any
predatory- or abusive-lending law up to the time of such repurchase or
substitution that was actually incurred and paid out of or on behalf of the
related trust fund, and that directly resulted from such violation.
Residential Dwelling: Any one of the following: (i) a detached
single family dwelling, (ii) a two-to-four family dwelling, (iii) a unit in a
condominium project, or (iv) a detached single family dwelling in a planned unit
development. Mortgaged Properties that consist of the following property types
are not eligible for sale to the Purchaser: (a) co-operative units, (b) log
homes, (c) earthen homes, (d) underground homes, (e) mobile homes, (f) homes
which are situated on more than ten acres of property and (g) homes which are
secured by a leasehold estate.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Servicing Addendum: The terms and conditions attached hereto as
Exhibit 5 which will govern the servicing of the Mortgage Loans by the Company
during the Interim Servicing Period.
Servicing Rights: With respect to each Mortgage Loan, any and all of
the following: (a) all rights to service the Mortgage Loan; (b) all rights to
receive servicing fees, additional servicing compensation (including without
limitation any late fees, assumption fees, prepayment penalties or premiums due
in connection with a Principal Prepayment, other penalties, fees or similar
payments with respect to the Mortgage Loan, and income on escrow accounts or
other receipts on or with respect to the Mortgage Loan), reimbursements or
indemnification for servicing the Mortgage Loan, and any payments received in
respect of the foregoing and proceeds thereof; (c) the right to collect, hold
and disburse Escrow Payments or other similar payments with respect to the
Mortgage Loans, Escrow Accounts and any amounts actually collected with respect
thereto and to receive interest income on such amounts to the extent permitted
by applicable law; (d) all accounts and other rights to payment related to any
of the property described in this paragraph; (e) possession and use of any and
all Mortgage Files pertaining to the Mortgage Loans or pertaining to the past,
present or prospective servicing of the Mortgage Loans; (f) all rights and
benefits relating to the direct solicitation of the related Mortgagors for
refinance or modification of the Mortgage Loans and attendant right, title and
interest in and to the list of such Mortgagors and data relating to their
respective Mortgage Loans; (g) all rights, powers and privileges incident to any
of the foregoing; and (h) all agreements or documents creating, defining or
evidencing any of the foregoing rights to the extent they relate to such rights
and all rights of the Company thereunder including, but not limited to, any
clean-up calls and termination options.
Servicing Rights Owner: The Person to whom the Servicing Rights are
transferred at any time, which Person may or may not be the Purchaser of the
Mortgage Loans hereunder, and which Person will, on the related Closing Date, be
the Purchaser.
Servicing Transfer Date: As set forth in the related Term Sheet;
provided however, if a Mortgage Loan is 60 or more days delinquent or subject to
a foreclosure proceeding, then with respect to the Servicing Rights to such
Mortgage Loan the related Servicing Transfer Date shall be the close of business
on the next Business Day if so requested by the Purchaser.
Stated Principal Balance: As to each Mortgage Loan (i) the principal
balance of such Mortgage Loan as of the related Cut-off Date after application
of payments actually received on the Mortgage Loans prior to the related Cut-off
Date, minus (ii) all amounts thereafter distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Successor Servicer: A servicer designated by the Purchaser pursuant
to Section 12.01 which is entitled to the benefits of the indemnifications set
forth in such Section.
Term Sheet: A supplemental agreement in the form attached hereto as
Exhibit 1 which shall be executed and delivered by the Company and the Purchaser
to provide for the sale pursuant to the terms of this Agreement of the Mortgage
Loans including all Servicing Rights related thereto listed on Schedule I
attached thereto, which supplemental agreement shall contain certain specific
information relating to such sale of such Mortgage Loans and may contain
additional covenants relating to such sale of such Mortgage Loans.
SECTION 2. Agreement to Purchase. The Company agrees to sell, and
the Purchaser agrees to purchase, Mortgage Loans, together with the Servicing
Rights, having an actual aggregate unpaid principal balance on the related
Cut-off Date in an amount set forth on the related Term Sheet or in such other
amount as agreed by the Purchaser and the Company as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the related Closing Date.
SECTION 3. Mortgage Loan Schedule. The Company shall deliver the
related Mortgage Loan Schedule to the Purchaser at least two (2) Business Days
prior to the related Closing Date.
SECTION 4. Purchase Price; Near-term Principal Prepayments.
Subsection 4.01. Purchase Price.
The Purchase Price for the Mortgage Loans and Servicing Rights
listed on the related Mortgage Loan Schedule shall be the Purchase Price
Percentage, multiplied by the Stated Principal Balance as of the related Cut-off
Date.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Company, on the related Closing Date, accrued interest on each
Mortgage Loan at the Mortgage Interest Rate net of the Interim Servicing Fee
from the related last Interest Paid to Date through the day prior to the related
Closing Date, inclusive; provided, however, with respect to those Mortgage Loans
for which interest has been paid through a date beyond the related Cut-off Date,
such accrued interest owing to Company shall be reduced by the amount of
interest accruing on the Stated Principal Balance of each such Mortgage Loan at
a rate equal to the Mortgage Interest Rate of such Mortgage Loan, from the
related Closing Date to the day prior to the interest paid through date for such
Mortgage Loan, inclusive.
With respect to each Mortgage Loan purchased, the Purchaser shall
own and be entitled to receive (except as otherwise described in this Agreement
during the related Interim Servicing Period): all payments and/or recoveries of
principal collected on or after the related Cut-off Date, all payments of
interest on the Mortgage Loans and all fees, prepayment penalties or premiums.
Subsection 4.02. Near-term Principal Prepayments.
In the event any Principal Prepayment is made by a Mortgagor on or
prior to the date which is 30 days after the related Closing Date occurs, the
Company shall remit to the Purchaser an amount equal to (a) with respect to any
Mortgage Loan for which there is no prepayment penalty, the excess, if any, of
the Purchase Price Percentage for such Mortgage Loan over par multiplied by the
amount of such Principal Prepayment (the "Premium") and (b) with respect to any
Mortgage Loan which has a prepayment penalty, an amount equal to the Premium for
such Mortgage Loan minus the amount of the prepayment penalty received. Such
remittance shall be made by the Company to Purchaser no later than the third
Business Day following receipt of notice of such Principal Prepayment by the
Company. If demand for payment of any amount described in this paragraph is not
made prior to ninety (90) days after the date of any Principal Prepayment, the
Company shall have no obligation to pay the amount described in this paragraph.
SECTION 5. Examination of Mortgage Files. With regard to the
examination of the Mortgage Loans and Mortgage Files prior to the related
Closing Date, Purchaser and Company shall have such rights as are set forth in
the related Confirmation. If Purchaser declines, in accordance with its rights
under the related Confirmation, to purchase a Mortgage Loan, such Mortgage Loan
shall be deleted from the related Mortgage Loan Schedule. The Purchaser may, at
its option and without notice to Company, purchase all or a portion of the
Mortgage Loans without conducting any partial or complete examination.
SECTION 6. Conveyance from Company to Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans; Possession of
Mortgage Files.
On the related Closing Date, the Company, simultaneously with the
payment of the related Purchase Price, does hereby sell, transfer, assign, set
over and convey to the Purchaser, without recourse, but subject to the terms of
this Agreement, all rights, title and interest of the Company in and to the
Mortgage Loans (including the Servicing Rights thereon) listed on the related
Mortgage Loan Schedule attached to the related Term Sheet, together with the
related Mortgage Files and all rights and obligations arising under the
documents contained therein. Pursuant to Subsection 6.03 of the Agreement, the
Company shall deliver to the Purchaser (or upon Purchaser's request, its
designee) the Mortgage Loan Documents. The contents of each related Mortgage
File required to be retained by the Company to interim service the Mortgage
Loans pursuant to the Agreement and the related Term Sheet and thus not
delivered to the Purchaser prior to the related Closing Date are, and shall be,
held in trust by the Company for the benefit of the Purchaser as the owner
thereof. The Company's possession of any portion of each such Mortgage File is
at the will of the Purchaser for the sole purpose of facilitating interim
servicing of the related Mortgage Loan pursuant to the Agreement and the related
Term Sheet, and such retention and possession by the Company shall be in a
custodial capacity only. The ownership of each Mortgage Note, Mortgage, and the
contents of the Mortgage File is vested in the Purchaser and the ownership of
all records and documents with respect to the related Mortgage Loan and
Servicing Rights prepared by or which come into the possession of the Company
shall immediately vest in the Purchaser and shall be retained and maintained, in
trust, by the Company at the will of the Purchaser in such custodial capacity
only.
The Mortgage File retained by the Company with respect to each
Mortgage Loan pursuant to this Agreement and the related Term Sheet shall be
appropriately identified in the Company's computer system to reflect clearly the
sale of such related Mortgage Loan to the Purchaser. The Company shall release
from its custody the contents of any Mortgage File retained by it only in
accordance with this Agreement.
Subsection 6.02. Books and Records.
Record title to each Mortgage and the related Mortgage Note as of
the related Closing Date shall be in the name of the Company in trust for the
benefit of the Purchaser or one or more designees of the Purchaser, as the
Purchaser shall designate, solely for the purpose of facilitating the interim
servicing of the Mortgage Loans as described herein. Upon Purchaser's request,
the Company shall transfer, or cause to be transferred, record title to each
Mortgage and the related Mortgage Note to the Purchaser. Notwithstanding the
foregoing, beneficial ownership of each Mortgage, the related Mortgage Note and
the related Servicing Rights shall be vested solely in the Purchaser or the
appropriate designee of the Purchaser, as the case may be. All rights arising
out of the Mortgage Loans including, but not limited to, all funds received by
the Company to which Purchaser is entitled as provided in Section 4 shall be
vested in the Purchaser or one or more designees of the Purchaser; provided,
however, that all such funds shall be received and held by the Company in trust
for the benefit of the Purchaser or the assignee of the Purchaser, as the case
may be, as the owner of the Mortgage Loans pursuant to the terms of this
Agreement.
It is the express intention of the parties that the transactions
contemplated by this Agreement and the related Term Sheet be, and be construed
as, a sale of the Mortgage Loans, and the Servicing Rights by the Company and
not a pledge of the Mortgage Loans or the Servicing Rights by the Company to the
Purchaser to secure a debt or other obligation of the Company. Consequently, the
sale of each Mortgage Loan and the Servicing Rights shall be reflected as a sale
on the Company's business records, tax returns and financial statements.
Subsection 6.03. Delivery of Mortgage Loan Documents.
No later than five Business Days prior to the related Closing Date,
the Company shall deliver to the Purchaser or its agent the following Mortgage
Loan Documents with respect to each Mortgage Loan to be purchased and sold on
the related Closing Date and set forth on the related Mortgage Loan Schedule
attached to the related Term Sheet:
(a) The original Mortgage Note endorsed "Pay to the order of
[________________], without recourse," and signed via original signature
in the name of the Company by an authorized officer, with all intervening
endorsements showing a complete chain of title from the originator to the
Company, together with any applicable riders, or an original lost note
affidavit executed by Company in a form reasonably acceptable to
Purchaser. In no event may an endorsement be a facsimile endorsement. If
the Mortgage Loan was acquired by the Company in a merger, the endorsement
must be by "[Company], successor by merger to the [name of predecessor]".
If the Mortgage Loan was acquired or originated by the Company while doing
business under another name, the endorsement must be by "[Company]
formerly known as [previous name]";
(b) In the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original Assignment of Mortgage, from the Company to
blank, or otherwise in accordance with Purchaser's instructions, which
assignment of mortgage shall, but for any blanks requested by Purchaser,
be in form and substance acceptable for recording. If the Mortgage Loan
was acquired or originated by the Company while doing business under
another name, the Assignment must be by "[Company] formerly known as
[previous name]". If the Mortgage Loan was acquired by the Company in a
merger, the endorsement must be by "[Company], successor by merger to the
[name of predecessor]". None of the Assignments are blanket assignments of
mortgage;
(c) The original of any guarantee executed in connection with
the Mortgage Note;
(d) Except as provided below and for each Mortgage Loan that
is not a MERS Mortgage Loan, the original Mortgage with evidence of
recording thereon; provided, that if the mortgage has been delivered to
the applicable recording office for recordation, Seller may deliver a copy
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) stating that such Mortgage has
been dispatched to the appropriate public recording office for recordation
and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage, and deliver the original upon receipt from the appropriate
recording office within 180 days of the Closing Date. With respect to each
MERS Mortgage Loan, the original Mortgage, noting the presence of the MIN
of the Mortgage Loans and either language indicating that the Mortgage
Loan is a MOM Loan or if the Mortgage Loan was not a MOM Loan at
origination, the original Mortgage and the assignment thereof to MERS,
with evidence of recording indicated thereon, or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(e) Originals, or copies thereof certified by the public
recording office in which such documents have been recorded, of each
assumption, extension, modification, written assurance or substitution
agreements, if applicable, or if the original of such document has not
been returned from the applicable public recording office, a true
certified copy, certified by the Company;
(f) In the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the
originals of all intervening assignments of mortgage with evidence of
recording thereon, or if any such intervening assignment of mortgage has
not been returned from the applicable recording office or has been lost or
if such public recording office retains the original recorded assignment
of mortgage, the Company shall deliver or cause to be delivered to the
Purchaser, a photocopy of such intervening assignment of mortgage together
with (i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the title insurer insuring the Mortgage stating
that such intervening assignment of mortgage has been delivered to the
appropriate public recording office for recordation and that such original
recorded intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Purchaser upon
receipt thereof by the Company; or (ii) in the case of an intervening
assignment of mortgage where a public recording office retains the
original recorded intervening assignment of mortgage or in the case where
an intervening assignment of mortgage is lost after recordation in a
public recording office, a copy of such intervening assignment of mortgage
with recording information thereon certified by such public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage;
(g) The original mortgagee policy of title insurance,
including riders and endorsements thereto, or if the policy has not yet
been issued, (a) a written commitment or interim binder for title issued
by the title insurance or escrow company dated as of the date the Mortgage
Loan was funded, with a statement by the title insurance company or
closing attorney that the priority of the lien of the related Mortgage
during the period between the date of the funding of the related Mortgage
Loan and the date of the related title policy (which title policy shall be
dated the date of recording of the related Mortgage) is insured or (b) a
preliminary title report issued by a title insurer in anticipation of
issuing a title insurance policy which evidences existing liens and gives
a preliminary opinion as to the absence of any encumbrance on title to the
Mortgaged Property, except liens to be removed on or before purchase by
the Mortgagor or which constitute customary exceptions acceptable to
lenders generally; the original policy of title insurance shall be
delivered promptly upon receipt thereof by the Company;
(h) The original of any security agreement, chattel mortgage
or equivalent document executed in connection with the Mortgage;
(i) If the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan has been signed by a
person on behalf of the Mortgagor, the original or copy of power of
attorney or other instrument that authorized and empowered such person to
sign bearing evidence that such instrument has been recorded, if so
required in the appropriate jurisdiction where the Mortgaged Property is
located, or a copy thereof certified by the public recording office in
which such instrument has been recorded or, if the original instrument has
not been returned from the applicable public recording office, a true
certified copy, certified by the Company; and
(j) The original Primary Mortgage Insurance Policy, if
applicable.
If the Company cannot deliver the original recorded Mortgage Loan
Documents on the related Closing Date, the Company shall, promptly upon receipt
thereof and in any case not later than 120 days from the related Closing Date,
deliver such original documents, including original recorded documents, to the
Purchaser (unless the Company is delayed in making such delivery by reason of
the fact that such documents shall not have been returned by the appropriate
recording office). If delivery is not completed within 120 days of the related
Closing Date, solely due to delays in making such delivery by reason of the fact
that such documents shall not have been returned by the appropriate recording
office, Company shall deliver such document to Purchaser within such time period
as specified in a Company's Officer's Certificate or, if delivery is not made by
the expiration of such time period, Company shall use commercially reasonable
efforts to cause delivery as soon as possible thereafter.
The Company shall forward to the Purchaser original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two (2)
weeks of their execution, provided, however, that the Company shall provide the
Purchaser with a certified true copy of any such document submitted for
recordation within two (2) weeks of its execution, and shall provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within ninety (90) days of its submission for recordation.
Company shall provide an original or duplicate original of the title
insurance policy to Purchaser within ninety (90) days of the receipt of the
recorded documents (required for issuance of such policy) from the applicable
recording office.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Company agrees that it will cause, at its own expense, the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the Company to
the Purchaser in accordance with this Agreement by including (or deleting, in
the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files the information required by the MERS(R) System
to identify the Purchaser of such Mortgage Loans. The Company further agrees
that it will not alter the information referenced in this paragraph with respect
to any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
For any Mortgage Loan that is not a MERS Mortgage Loan, the Company
shall prepare the Assignments of Mortgage and shall pay to the Purchaser any
recording fees or costs in transferring all original documents to the Purchaser.
On the date which is two days prior to the related Closing Date (the
"Scheduled Delivery Date",) the Seller shall deliver to the Purchaser the
Mortgage Loan Schedule.
SECTION 7. Representations, Warranties and Covenants of the Company;
Remedies for Breach.
Subsection 7.01. Representations and Warranties Respecting the
Company.
The Company hereby represents and warrants to the Purchaser and the
Servicing Rights Owner as of the related Closing Date that:
(i) The Company is a national association duly organized, validly
existing and in good standing under the laws of the United States of America and
is and will remain in compliance with the laws of each state in which any
Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan and the servicing of the Mortgage Loan in
accordance with the terms of this Agreement. The Company has all licenses
necessary to carry out its business as now being conducted, and is licensed and
qualified to transact business in and is in good standing under the laws of each
state in which any Mortgaged Property is located or is otherwise exempt under
applicable law from such licensing or qualification or is otherwise not required
under applicable law to effect such licensing or qualification, and in any event
the Company is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of each Mortgage Loan and the sale of the
Mortgage Loans and Servicing Rights in accordance with the terms of this
Agreement and the related Term Sheet;
(ii) The Company has the full power and authority and legal right to
hold, transfer and convey each Mortgage Loan (including the Servicing Rights),
to sell each Mortgage Loan and the Servicing Rights, and to execute, deliver and
perform, and to enter into and consummate, all transactions contemplated by this
Agreement and the related Term Sheet and to conduct its business as presently
conducted. The Company has duly authorized the execution, delivery and
performance of this Agreement and any agreements contemplated hereby, has duly
executed and delivered this Agreement, and any agreements contemplated hereby,
and this Agreement and the related Term Sheet, assuming due authorization,
execution and delivery by the Purchaser, and each Assignment of Mortgage and any
agreements contemplated hereby, constitutes a legal, valid and binding
obligation of the Company, enforceable against it in accordance with its terms
and all requisite corporate action has been taken by the Company to make this
Agreement and all agreements contemplated hereby valid and binding upon the
Company in accordance with their terms;
(iii) Neither the execution and delivery of this Agreement or the related
Term Sheet by the Company, nor the origination or purchase of the Mortgage Loans
by the Company, the sale of the Mortgage Loans or the Servicing Rights to the
Purchaser, the consummation of the transactions contemplated hereby, or the
performance of or compliance with the terms and conditions of this Agreement or
the related Term Sheet will conflict with any of the terms, conditions or
provisions of the Company's articles of incorporation or by-laws, or constitute
a default under or result in a breach or acceleration of, any material contract,
agreement or other instrument to which the Company is a party or which may be
applicable to the Company or its assets, or result in the material violation of
any law, rule, regulation, order, judgment or decree to which the Company or its
properties are subject, or impair the ability of the Purchaser to realize on the
Mortgage Loans;
(iv) The Company is not in violation of, and the execution and delivery
of this Agreement or the related Term Sheet by the Company and its performance
and compliance with the terms of this Agreement will not constitute a violation
with respect to, any order or decree of any court or any order or regulation of
any federal, state, municipal or governmental agency having jurisdiction over
the Company or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Company or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder;
(v) The Company does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant contained in this
Agreement or the related Term Sheet. The Company is solvent and the sale of the
Mortgage Loans and the Servicing Rights will not cause the Company to become
insolvent. The sale of the Mortgage Loans and Servicing Rights is not undertaken
with the intent to hinder, delay or defraud any of the Company's creditors;
(vi) The Company is properly qualified to service the Mortgage Loans and
has been servicing the Mortgage Loans prior to the related Closing Date;
(vii) Immediately prior to the payment of the related Purchase Price for
each Mortgage Loan and the Servicing Rights thereto, the Company was the owner
of the related Mortgage and the indebtedness evidenced by the related Mortgage
Note and the related Servicing Rights and upon the payment of the related
Purchase Price by the Purchaser, in the event that the Company retains record
title, the Company shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof and only for the purpose of interim servicing
and supervising the interim servicing of each Mortgage Loan;
(viii) There are no actions or proceedings against, or, to Company's
knowledge, investigations of, the Company before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement or the
related Term Sheet, (B) seeking to prevent the sale of the Mortgage Loans, the
sale of the Servicing Rights or the consummation of the transactions
contemplated by this Agreement, (C) that might prohibit or materially and
adversely affect the performance by the Company of its obligations under, or the
validity or enforceability of, this Agreement or (D) that is reasonably likely
to have a material adverse effect on the financial condition of the Company;
(ix) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of, or compliance by the Company with, this Agreement
or the sale of the Mortgage Loans and Servicing Rights and delivery of the
Mortgage Files to the Purchaser or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the related
Closing Date;
(x) The consummation of the transactions contemplated by this Agreement
and the related Term Sheet are in the ordinary course of business of the
Company, and the transfer, assignment and conveyance of the Mortgage Notes, the
Mortgages and/or the Servicing Rights by the Company pursuant to this Agreement
are not subject to the bulk transfer or any similar statutory provisions in
effect in any applicable jurisdiction;
(xi) In the opinion of Company, the consideration received by Company
upon the sale of the Mortgage Loans and the Servicing Rights to Purchaser under
this Agreement and the related Term Sheet constitutes fair consideration for the
Mortgage Loans and Servicing Rights under current market conditions. The Company
will treat the sale of the Mortgage Loans and the Servicing Rights to the
Purchaser as a sale for reporting and accounting purposes and, to the extent
appropriate, for federal income tax purposes;
(xii) The Company has delivered to the Purchaser financial statements
for its last two complete fiscal years. All such financial information fairly
presents the pertinent results of operations and financial position for the
period identified and has been prepared in accordance with GAAP consistently
applied throughout the periods involved, except as set forth in the notes
thereto. There has been no change in the business, operations, financial
condition, properties or assets of the Company since the date of the Company's
financial information that would have a material adverse effect on its ability
to perform its obligations under this Agreement and the related Term Sheet;
(xiii) The Company has not dealt with any broker, investment banker,
agent or other person that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans or the Servicing Rights; and
Subsection 7.02. Representations and Warranties Regarding Individual
Mortgage Loans.
The Company hereby represents and warrants to the Purchaser and the
Servicing Rights Owner, with respect to each Mortgage Loan, as of the related
Closing Date or such other date specified herein:
i The information set forth in the related Mortgage Loan Schedule is
complete, true and correct;
ii No payment under any Mortgage Loan is delinquent as of the
related Closing Date nor has any scheduled payment been delinquent for
more than thirty (30) days at any time prior to the related Closing Date.
The Mortgage Loan has not been dishonored. There are no material defaults
under the terms of the Mortgage Loan. Each Mortgage Loan has a monthly Due
Date of the first day of each month. For purposes of this paragraph, a
Mortgage Loan will be deemed delinquent if any payment due thereunder was
not paid by the Mortgagor in the month such payment was due;
iii There is no valid offset, right of rescission, defense or
counterclaim of any obligor under any Mortgage Note or Mortgage, including
the obligation of the Mortgagor to pay the unpaid principal of or interest
on such Mortgage Note, and any applicable right of rescission has expired,
nor will the operation of any of the terms of such Mortgage Note or
Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, recoupment, counterclaim or
defense, including, without limitation, the defense of usury, and no such
right of rescission, set-off, recoupment, counterclaim or defense has been
asserted with respect thereto. No Mortgage Loan is subject to any pending
bankruptcy, insolvency, reorganization or moratorium;
iv There are no mechanics' liens or similar liens or claims for
work, labor or material affecting any Mortgaged Property which have been
filed (and no rights are outstanding that under law could give rise to
such liens), which are or may be a lien prior to, or equal with, the lien
of such Mortgage, except those which are insured against by the title
insurance policy referred to in clause (ix) below;
v As of the date of origination of the Mortgage Loan, there was no
damage to any Mortgaged Property. At origination of the Mortgage Loan
there was not any proceeding pending for the total or partial condemnation
of the Mortgaged Property. The Company has not received notification that
any such proceedings are scheduled to commence at a future date.
vi Each Mortgage is a valid, subsisting, enforceable and perfected
first lien on the Mortgaged Property securing the related Mortgage Note,
including all buildings on the Mortgaged Property and all installations
and mechanical, electrical, plumbing, heating and air conditioning systems
affixed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing securing the Mortgage
Note's original principal balance subject to principles of equity,
bankruptcy, insolvency and other laws of general application affecting the
rights of creditors. The Mortgage and the Mortgage Note do not contain any
evidence of any security interest or other interest or right thereto. Each
Mortgaged Property is owned by the Mortgagor in fee simple and is free and
clear of all adverse claims, encumbrances and liens having priority over
the first lien of the Mortgage, subject only to (1) the lien of
nondelinquent current real property taxes and assessments not yet due and
payable, (2) 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 appearing of record being acceptable to
mortgage lending institutions generally and specifically reflected in the
appraisal made 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 (3) other matters to
which like properties are commonly subject which do not individually or in
the aggregate materially interfere with the benefits of the security
intended to be provided by such Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement,
chattel mortgage or equivalent document related to and delivered in
connection with the Mortgage Loan establishes and creates a valid,
subsisting enforceable, and perfected first lien and first priority
security interest on the property described therein, and immediately prior
to the sale of such Mortgage Loan to the Purchaser pursuant to this
Agreement and the related Term Sheet, the Company had full right to sell
and assign the same to the Purchaser;
vii Each Mortgage Loan complies with, and the Company has complied
with, applicable local, state and federal laws, regulations and other
requirements including, without limitation, usury, equal credit
opportunity, real estate settlement procedures, the Federal
Truth-In-Lending Act, all applicable predatory and abusive lending laws,
all applicable unfair and deceptive practices laws and disclosure laws and
the consummation of the transactions contemplated hereby, including
without limitation, the receipt of interest by the owner of such Mortgage
Loan, will not involve the violation of any such laws, rules or
regulations. Each Mortgage Loan is being (and has been) serviced in
accordance with Accepted Servicing Practices and applicable state and
federal laws, including, without limitation, the Federal Truth-In-Lending
Act and other consumer protection laws, real estate settlement procedures,
usury, equal credit opportunity and disclosure laws.
viii Neither the Company nor any prior holder of any Mortgage Loan
has impaired, waived, altered or modified the Mortgage or Mortgage Note
(except that a Mortgage Loan may have been modified by a written
instrument (a copy of which is in the Mortgage File and the terms of which
are reflected on the Mortgage Loan Schedule) which has been recorded, if
necessary to protect the interests of the owner of such Mortgage Loan; the
substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and title
insurance policy, to the extent required by the related policies);
satisfied, canceled, rescinded or subordinated such Mortgage in whole or
in part; released the applicable Mortgaged Property in whole or in part
from the lien of such Mortgage; or executed any instrument of
cancellation, rescission or satisfaction with respect thereto. No
instrument of release or waiver has been executed in connection with any
Mortgage Loan, and no Mortgagor has been released, in whole or in part
from its obligations in connection with a Mortgage Loan. No Mortgage Loan
has been modified so as to restructure the payment obligations or re-age
the Mortgage Loan;
ix Each Mortgage Loan is covered by an ALTA lender's title insurance
policy or equivalent form of policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac in a form acceptable to, and issued by a title insurer
acceptable to, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, together with all applicable
ALTA endorsements, including without limitation, an adjustable rate
mortgage loan endorsement, if applicable, a condominium endorsement, a
planned unit development endorsement, an extended coverage endorsement,
and an 8.1 ALTA or equivalent environmental endorsement, insuring the
Company, its successors and assigns, as to the first lien priority of the
Mortgage (subject to the exceptions contained in (vi) (1), (2), and (3)
above), in an amount at least equal to the original principal balance of
each such Mortgage Loan and against any loss by reason of the invalidity
or unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment in the Mortgage Interest Rate and
Monthly Payment. Each title insurance policy affirmatively insures ingress
and egress and insures against encroachments by or upon the Mortgaged
Property and each such policy was issued on the date of the origination of
each related Mortgage Loan by a title insurer qualified to do business in
the jurisdiction where the Mortgaged Property is located. The Company, its
successors and assigns, are the sole insured of such lender's title
insurance policy, such title insurance policy has been duly and validly
endorsed to the Purchaser or the assignment to the Purchaser of the
Company's interest therein does not require the consent of or notification
to the insurer and such lender's title insurance policy is in full force
and effect and will be in full force and effect upon the consummation of
the transactions contemplated by this Agreement. Where required by law or
regulation, the Mortgagor has been given the opportunity to choose the
carrier of the required mortgage title insurance. No claims have been made
under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Company, nor any Mortgagor, has done, by
act or omission, anything which would materially impair the coverage of
such lender's title insurance policy;
x All of the improvements which were included for the purpose of
determining the Appraised Value of the Mortgaged Property lie wholly
within the boundaries and building restriction lines of such property (and
wholly within the project with respect to a condominium unit), and no
improvements on adjoining properties encroach upon the Mortgaged Property;
xi No improvement located on or being part of the Mortgaged Property
is in violation of any applicable zoning law or regulation, subdivision
law or ordinance. All inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same, including
but not limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate authorities,
and the Mortgaged Property is lawfully occupied under applicable law;
xii Each Mortgage Note and the applicable Mortgage are original and
genuine, and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium, receivership and other
similar laws relating to creditors' rights generally or by equitable
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law) and the Company has taken all action
necessary to transfer such rights of enforceability to the Purchaser. All
parties to the Mortgage Note and the Mortgage had legal capacity to
execute the Mortgage Note and the Mortgage and each Mortgage Note and
Mortgage has been duly and properly executed by such parties. The Mortgage
Loan Documents are on forms acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
Either the Mortgagor or the guarantor of a Mortgage Loan is a natural
person;
xiii The proceeds of the Mortgage Loan have been fully disbursed;
there is no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements and
as to disbursement of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making, closing or recording the
Mortgage Loan were paid and the Mortgagor is not entitled to any refund of
amounts paid or due under the Mortgage Note or Mortgage;
xiv Each Mortgage contains customary and enforceable provisions that
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the
security, including (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure or if
applicable, non-judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the property.
There is no homestead or other exemption available to the Mortgagor which
would interfere with such right to foreclose;
xv With respect to each Mortgage constituting a deed of trust,
either a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in such
Mortgage or if no duly qualified trustee has been properly designated and
so serves, the Mortgage contains satisfactory provisions for the
appointment of such trustee by the holder of the Mortgage at no cost or
expense to such holder, and no fees or expenses are or will become payable
by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
xvi There are no defaults by Company in complying with the terms of
the Mortgage, and all taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents or
other outstanding charges affecting the Mortgaged Property which
previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item
which remains unpaid and which has been assessed but is not yet due and
payable. There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deficits or payments
of other charges or payments due the Company have been capitalized under
the Mortgage or the applicable Mortgage Note;
xvii The Mortgage Note is not and has not been secured by any
collateral, pledged account or other security other than the lien of the
corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to above and such
collateral does not serve as security for any other obligation and no
Mortgage Loan is secured by more than one Mortgaged Property;
xviii The buildings and improvements upon each Mortgaged Property
are insured by a Qualified Insurer pursuant to a standard, valid and
existing hazard insurance policy acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
which policy insures against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the ▇▇▇▇▇▇ Mae Guides or
▇▇▇▇▇▇▇ Mac Guide representing coverage in an amount not less than the
lesser of (A) the maximum insurable value of the improvements securing
such Mortgage Loan and (B) the outstanding principal balance of the
related Mortgage Loan, but in no event an amount less than an amount that
is required to prevent the Mortgagor from being deemed to be a co-insurer
thereunder. If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration (which policy conforms to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
requirements) is in effect with respect to such Mortgaged Property with a
Qualified Insurer in an amount representing coverage not less than the
least of (A) the outstanding Stated Principal Balance of the Mortgage
Loan, (B) the maximum insurable value of the improvements securing such
Mortgage Loan or (C) the maximum amount of insurance that is available
under federal law. All individual insurance policies contain a standard
mortgagee clause naming the Company or the original holder of the
Mortgage, and its successors in interest, as loss payee, and all of the
premiums due and payable thereon have been paid; the Mortgage obligates
the Mortgagor thereunder to maintain all such insurance at the Mortgagor's
cost and expense, and upon the Mortgagor's failure to do so, authorizes
the holder of the Mortgage to obtain and maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor. Neither the Company (nor any prior originator or servicer of
any of the Mortgage Loans) nor any Mortgagor has engaged in any act or
omission which has impaired or would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either; All such insurance policies contain
a clause that the insurer will notify the named mortgagee at least ten
(10) days prior to any reduction in coverage or cancellation of the
policy;
xix There is no default, breach or event of acceleration existing
under the Mortgage or the applicable Mortgage Note; and no event which,
with the passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach, violation or event of
acceleration, and none of (i) the Company and any of its affiliates (ii)
any servicer or subservicer and (iii) any prior mortgagee, of any Mortgage
Loan has waived any default, breach or event of acceleration; no
foreclosure action is threatened or has been commenced with respect to the
Mortgage Loan;
xx The Company has caused or will cause to be performed any and all
acts required to preserve the rights and remedies of the Purchaser in any
insurance policies applicable to the Mortgage Loans including, without
limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss
payee and mortgagee rights in favor of the Purchaser;
xxi The Company has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount required
by the Mortgage Loan;
xxii The Mortgage File contains an appraisal of the Mortgaged
Property signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser, approved by the Company, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan, and the appraisal and
appraiser both satisfy the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and
Title XI of the Federal Institutions Reform, Recovery, and Enforcement Act
of 1989 and the regulations promulgated thereunder, all as in effect on
the date the Mortgage Loan was originated and conforms to the underwriting
requirements of the Company. The appraisal is in a form acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and was made by a Qualified Appraiser;
xxiii Each of the Mortgaged Properties consists of a single parcel
of real property with a detached single-family residence erected thereon,
or a two- to four-family dwelling, or a townhouse, or an individual
condominium unit in a condominium project, or an individual unit in a
planned unit development. No Mortgaged Property consists of cooperative
housing or stock in a cooperative housing corporation. Any condominium
unit or planned unit development either conforms with applicable ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac requirements regarding such dwellings or is covered by
a waiver confirming that such condominium unit or planned unit development
is acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac or is otherwise "warrantable"
with respect thereto or "nonwarrantable" if underwritten in accordance
with the Company's underwriting guidelines attached hereto. No such
residence is a mobile home. Any residence that is a manufactured dwelling
was underwritten in accordance with ▇▇▇▇▇▇ Mae guidelines. No Mortgage
Loan is a manufactured, modular, or row-house loan in Baltimore or
Philadelphia or New Mexico. None of the Mortgage Loans are considered
agricultural loans. No Mortgaged Property consists of a log home, earthen
home, underground home or a home which is situated on more than ten acres
of property. Any Mortgage Property which is secured by a leasehold estate
was underwritten in accordance with ▇▇▇▇▇▇ ▇▇▇ guidelines. No Mortgaged
Property (and no portion of a Mortgaged Property) is being used for
commercial purposes. None of the Mortgage Loans are made for the purchase
of land only;
xxiv None of the Mortgage Loans provide for deferred interest or
negative amortization. None of the Mortgage Loans are simple interest
Mortgage Loans; No Mortgaged Property is a timeshare;
xxv No Mortgage Loan contains any provisions currently in effect
which may constitute a "buydown" provision. The Mortgage Loan is not a
graduated payment Mortgage Loan. Any Mortgage Loan containing a "balloon"
feature is marked as such on the related Mortgage Loan Schedule;
xxvi Company is the sole owner of record and is the holder of the
Mortgage Loan and the indebtedness evidenced by the Mortgage Note and the
related Servicing Rights thereto. Upon the sale of the Mortgage Loan to
the Purchaser, and prior to the transfer of Servicing Rights to the
Purchaser, the Company will retain the Mortgage File or any part thereof
with respect thereto not delivered to the Purchaser or if requested by the
Purchaser, it's designee, in trust only for the purpose of servicing and
supervising the servicing of the Mortgage Loan. Immediately prior to the
transfer and assignment to the Purchaser, the Mortgage Loan, including the
Mortgage Note and the Mortgage, were not subject to an assignment sale or
pledge to any person other than Purchaser and the Company had good and
marketable title to and was the sole owner thereof and had full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest and
has the full right and authority subject to no interest or participation
of, or agreement with, any other party, to sell and assign the Mortgage
Loan pursuant to this Agreement and the related Term Sheet and following
the sale of the Mortgage Loan, the Purchaser will own such Mortgage Loan
free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest. The Company intends to
relinquish all rights to possess, control and monitor the Mortgage Loan,
except for the purposes of interim servicing the Mortgage Loan as set
forth in this Agreement. After the related Closing Date, the Company will
not have any right to modify or alter the terms of the sale of the
Mortgage Loan and the Company will not have any obligation or right to
repurchase the Mortgage Loan or substitute another Mortgage Loan, except
as provided in this Agreement or the related Term Sheet, or as otherwise
agreed to by the Company and the Purchaser. The Company acquired any
right, title and interest in and to the Mortgage Loans in good faith and
without notice of any adverse claim;
xxvii The Mortgage Note is payable on the first day of each month.
Principal payments on the Mortgage Loan commenced no more than sixty (60)
days after the funds were disbursed in connection with the Mortgage Loan.
Monthly payments of interest are calculated on the basis of a year
comprised of twelve 30-day months;
xxviii The Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior
written consent of the mortgagee thereunder, at the option of the
mortgagee and such provision is enforceable;
xxix Each of the Mortgage and the Assignment of Mortgage (for each
Mortgage Loan that is not a MERS Mortgage Loan) is in recordable form and
is acceptable for recording under the laws of the jurisdiction in which
the Mortgaged Property is located;
xxx The Mortgagor has not notified the Company, and the Company has
no knowledge of any relief requested or allowed to the Mortgagor under the
Servicemembers' Civil Relief Act;
xxxi There exists no violation of any local, state, or federal
environmental law, rule or regulation with respect to the Mortgaged
Property which violation has or could have a material adverse effect on
the market value of such Mortgaged Property. The Company has no knowledge
of any pending action or proceeding directly involving the related
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; and nothing further remains to be done to satisfy
in full all requirements of each such law, rule or regulation constituting
a prerequisite to the use and enjoyment of such Mortgaged Property;
xxxii For each Mortgage Loan, the related Mortgage File is complete
and contains a true, accurate and correct copy of each of the documents
and instruments specified to be included therein;
xxxiii Each Mortgage Note, each Mortgage, each Assignment of
Mortgage and any other documents required pursuant to this Agreement to be
delivered by the Company hereunder has been delivered to the Purchaser or
its agent;
xxxiv No Mortgage Loan was originated based on an appraisal of the
related Mortgaged Property made prior to completion of construction of the
improvements thereon. No Mortgage Loan was made in connection with the
construction or rehabilitation of a Mortgaged Property or facilitating the
trade-in or exchange of a Mortgaged Property;
xxxv The Company used no selection procedures that identified the
Mortgage Loans as being less desirable or valuable than other comparable
mortgage loans in the Company's portfolio; No statement, tape, diskette,
form, report or other document furnished or to be furnished by Company
pursuant to this Agreement or the related Term Sheet or in connection with
the transactions contemplated hereby contains or will contain any
statement that is or will be inaccurate or misleading in any material
respect or omits to state a material fact required to be stated therein or
necessary to make the information and statements therein not misleading;
xxxvi No error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place on the
part of the Company or the Mortgagor or any other party, including,
without limitation, the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination or servicing of
the Mortgage Loan or in the application of any insurance in relation to
such Mortgage Loan; no predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to
the ability of the borrower to repay and the extension of credit which has
no apparent benefit to the borrower, were employed in the origination of
the Mortgage Loan;
xxxvii The Mortgagor has received and has executed, where
applicable, prior to origination of the Mortgage Loan, all disclosure and
rescission materials required by applicable law with respect to the making
of the Mortgage Loan;
xxxviii Each Mortgage Loan was originated by or for the Company
pursuant to, and conforms with, the Company's underwriting guidelines
attached as Exhibit 9 hereto;
xxxix None of the Mortgage Loans are High Cost Loans. No predatory
or deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the Mortgagor to
repay and the extension of credit which has no apparent benefit to the
Mortgagor, were employed in the origination of the Mortgage Loan;
xl All Mortgage Loans originated in New Jersey comply with the
Purchaser's standards for purchasing New Jersey mortgage loans, set forth
on Exhibit 11 hereto.
xli No Mortgage Loan (a) is secured by property located in the state
of New York; (b) had an original principal balance of $300,000 or less,
and (c) has an application date on or after April 1, 2003, the terms of
which Mortgage Loan equal or exceed either the APR or the points and fees
threshold for "high-cost home loans," as defined in Section 6-L of the New
York State Banking Law;
xlii No Mortgage Loan secured by property located in the State of
Georgia was originated on or after October 1, 2002 and on or prior to
March 7, 2003. There is no Mortgage Loan that was originated on or after
March 7, 2003 that is a "high cost home loan" as defined under the Georgia
Fair Lending Act;
xliii The Mortgage Loan is not subject to any outstanding litigation
for fraud, origination, predatory lending, servicing or closing practices;
xliv No Mortgage Loan secured by property located in the State of
New Mexico is a home improvement loan or manufactured home loan subject to
the provisions of New Mexico's Home Loan Protection Act closed on or after
January 1, 2004;
xlv No Mortgage Loan secured by property located in the State of
South Carolina and subject to the South Carolina High Cost and Consumer
Home Loan Act is a refinance or non-purchase money Mortgage Loan;
xlvi Each Mortgage Loan has been serviced in all material respects
in strict compliance with Accepted Servicing Practices and the Interim
Servicer has reported the Mortgagor credit files to each of the three
credit repositories in a timely manner;
xlvii As to each consumer report (as defined in the Fair Credit
Reporting Act, Public Law 91-508) or other credit information furnished by
the Company to the Purchaser, that Company has full right and authority
and is not precluded by law or contract from furnishing such information
to the Purchaser and the Purchaser is not precluded from furnishing the
same to any subsequent or prospective purchaser of such Mortgage, subject
to Purchaser's and the subsequent or prospective purchaser's adherence to
applicable federal and state credit reporting and privacy laws and
regulations, including, but not limited to the Fair Credit Reporting Act
and the Gramm ▇▇▇▇▇ ▇▇▇▇▇▇ Act. The Company shall hold the Purchaser
harmless from any and all damages, losses, costs and expenses (including
attorney's fees actually incurred) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing
operations and the purchase and sale of mortgages or Servicing Rights
thereto, unless such damage, loss, cost and expense arises out of
Purchaser's noncompliance with applicable federal or state credit
reporting and privacy laws and regulations. The Company has or has caused
the related servicer to, for each Mortgage Loan, fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis;
xlviii With respect to each Mortgage Loan for which the related
Mortgage Loan Schedule indicates there is a prepayment penalty feature (a
"Prepayment Penalty Mortgage Loan"), the Prepayment Penalty Mortgage Loan
is subject to a prepayment penalty as provided in the related Mortgage
Note. With respect to each Prepayment Penalty Mortgage Loan, each such
prepayment penalty is enforceable and will be enforced by the Company for
the benefit of the Purchaser, and each prepayment penalty is permitted
pursuant to federal, state and local law. Each such prepayment penalty is
in an amount equal to the maximum amount permitted under applicable law
and no such prepayment penalty may be imposed for a term in excess of five
(5) years;
xlix The LTV of the Mortgage Loan either is not more than 80% or the
excess over 75% of the Appraised Value is and will be insured as to
payment defaults by a PMI Policy until the LTV of such Mortgage Loan is
reduced to 80%. All provisions of such PMI Policy have been and are being
complied with, such policy is in full force and effect, and all premiums
due thereunder have been paid. No action, inaction, or event has occurred
and no state of facts exists that has, or will result in the exclusion
from, denial of, or defense to coverage. Any Mortgage Loan subject to a
PMI Policy (other than a lender paid PMI Policy) obligates the Mortgagor
thereunder to maintain the PMI Policy and to pay all premiums and charges
in connection therewith. The Mortgage Interest Rate for the Mortgage Loans
as set forth on the Mortgage Loan Schedule accurately reflects the
Mortgage Interest Rate of the Mortgage Loans, net of any such insurance
premium;
xl The Company represents and warrants to the Purchaser that as of
the related Closing Date or as of such date specifically provided herein:
(1) No Mortgage Loan is a "High Cost Home Loan" as defined in
the Arkansas Home Loan Protection Act effective July 16, 2003 (Act
1340 of 2003);
(2) No Mortgage Loan is a "High Cost Home Loan" as defined in
the Kentucky high-cost home loan statute effective June 24, 2003
(Ky. Rev. Stat. Section 360.100);
(3) No borrower was encouraged or required to select a
Mortgage Loan product offered by the Mortgage Loan's originator
which is a higher cost product designed for less creditworthy
borrowers, unless at the time of the Mortgage Loan's origination,
such borrower did not qualify taking into account credit history and
debt to income ratios for a lower cost credit product then offered
by the Mortgage Loan's originator or any affiliate of the Mortgage
Loan's originator. If, at the time of loan application, the borrower
may have qualified for a for a lower cost credit product then
offered by any mortgage lending affiliate of the Mortgage Loan's
originator, the Mortgage Loan's originator referred the borrower's
application to such affiliate for underwriting consideration;
(4) The methodology used in underwriting the extension of
credit for each Mortgage Loan employs objective mathematical
principles which relate the borrower's income, assets and
liabilities to the proposed payment and/or the borrower's past
credit history and such underwriting methodology does not rely
solely on the extent of the borrower's equity in the collateral as
the principal determining factor in approving such credit extension.
Such underwriting methodology confirmed that at the time of
origination (application/approval) the borrower had a reasonable
ability to make timely payments on the Mortgage Loan;
(5) With respect to any Mortgage Loan that contains a
provision permitting imposition of a premium upon a prepayment prior
to maturity: (i) prior to the loan's origination, the borrower
agreed to such premium in exchange for a monetary benefit, including
but not limited to a rate or fee reduction, (ii) prior to the loan's
origination, the borrower was offered the option of obtaining a
mortgage loan that did not require payment of such a premium, (iii)
the prepayment premium is disclosed to the borrower in the loan
documents pursuant to applicable state and federal law, and (iv)
notwithstanding any state or federal law to the contrary, the
Company shall not impose such prepayment premium in any instance
when the mortgage debt is accelerated as the result of the
borrower's default in making the loan payments;
(6) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of
obtaining the extension of credit. No borrower obtained a prepaid
single premium credit life, disability, accident or health insurance
policy in connection with the origination of the Mortgage Loan; No
proceeds from any Mortgage Loan were used to purchase single premium
credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan;
(7) All points and fees related to each Mortgage Loan were
disclosed in writing to the borrower in accordance with applicable
state and federal law and regulation. Except in the case of a
Mortgage Loan in an original principal amount of less than $60,000
which would have resulted in an unprofitable origination, no
borrower was charged "points and fees" (whether or not financed) in
an amount greater than 5% of the principal amount of such loan.
(8) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in
connection with the origination and servicing of each Mortgage Loan
has been disclosed in writing to the borrower in accordance with
applicable state and federal law and regulation; and
(9) The Company will transmit full-file credit reporting data
for each Mortgage Loan and that for each Mortgage Loan, Company
agrees it shall report one of the following statuses each month as
follows: new origination, current, delinquent (30-, 60-, 90-days,
etc.), foreclosed, or charged-off.
xli No Mortgage Loan is subject to Oakland's Anti-Predatory
Lending Ordinance.
Subsection 7.03. Remedies for Breach of Representations and
Warranties; Post-Closing Due Diligence.
It is understood and agreed that the covenants, representations and
warranties of Company set forth in this Agreement and the related Term Sheet
shall survive the sale of the Mortgage Loans and the Servicing Rights to the
Purchaser and shall inure to the benefit of the Purchaser for a period of ten
(10) years after the applicable Closing Date, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or lack of examination of any Mortgage File. Upon discovery by
either the Company or the Purchaser of a breach of any of the foregoing
representations and warranties which materially and adversely affects the value
of the Mortgage Loans (or the Servicing Rights) or the interest of the Purchaser
therein (or which materially and adversely affects the value of a Mortgage Loan
(or related Servicing Rights) or the interests of the Purchaser in the related
Mortgage Loan (including the Servicing Rights thereon)) in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other.
Within sixty (60) days after the earlier of either discovery by or
notice to the Company of any breach of a representation or warranty which
materially and adversely affects the value of a Mortgage Loan or the Mortgage
Loans, or the interest of the Purchaser therein, the Company shall use its best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Company shall, at the Purchaser's or Servicing
Right's Owner's option, repurchase such Mortgage Loan (including the related
Servicing Rights) at the Repurchase Price. Any repurchase of a Mortgage Loan or
Mortgage Loans (including the corresponding Servicing Rights) pursuant to the
foregoing provisions of this Subsection 7.03 shall occur on a date designated by
the Purchaser or the Servicing Right's Owner and shall be accomplished by wire
transfer of immediately available funds on the repurchase date to an account
designated by the Purchaser in writing; provided that the Company is given
adequate notice of such information to comply with such instructions.
If pursuant to the foregoing provisions the Company repurchases a
Mortgage Loan that is a MERS Mortgage Loan, the Company shall either (a) cause
MERS to execute and deliver an assignment of the Mortgage in recordable form to
transfer the Mortgage from MERS to the Company and shall cause such Mortgage to
be removed from registration on the MERS(R) System in accordance with MERS'
rules and regulations or (b) cause MERS to designate on the MERS(R) System the
Company as the beneficial holder of such Mortgage Loan.
At the time of repurchase, the Purchaser, the Servicing Rights
Owner, as applicable, and the Company shall arrange for the reassignment of the
repurchased Mortgage Loan and/or the related Servicing Rights, as applicable, to
the Company and the delivery to the Company of any documents held by the
Purchaser and/or the Servicing Rights Owner and their respective designees
relating to the repurchased Mortgage Loan or Servicing Rights, as applicable.
Upon the repurchase of a Mortgage Loan, the Mortgage Loan Schedule shall be
amended to reflect the withdrawal of the repurchased Mortgage Loan from this
Agreement.
Any cause of action against the Company relating to or arising out
of the breach of any representations and warranties made in Subsections 7.01 or
7.02 shall accrue as to any Mortgage Loan or Servicing Rights upon (i) discovery
of such breach by the Purchaser or notice thereof by the Company to the
Purchaser and Servicing Rights Owner, (ii) failure by the Company to cure such
breach or repurchase such Mortgage Loan and/or Servicing Rights as specified
above, and (iii) demand upon the Company by the Purchaser or Servicing Rights
Owner for compliance with the relevant provisions of this Agreement.
In the event that any Mortgage Loan prepays in full on or prior to
the date which is thirty days after the related Closing Date occurs, the Seller
shall pay the Purchaser, within three Business Days of such prepayment in full,
(a) with respect to any Mortgage Loan without a prepayment penalty, the
difference between the Purchase Price for such Mortgage Loan and the outstanding
principal balance of such Mortgage Loan as of the Cut-off Date (the "Premium")
and (b) with respect to any Mortgage Loan with a prepayment penalty, the
difference between the Premium and the amount of the prepayment penalty
collected with respect to the Mortgage Loan.
SECTION 8. Closing. The closing for the Mortgage Loans shall take
place on the related Closing Date. At the Purchaser's option, the closing shall
be either by telephone and facsimile, confirmed by letter or wire as the parties
shall agree, or conducted in person, at such place as the parties shall agree.
Subsection 8.1 Conditions to Purchaser's Obligations.
The obligation of Purchaser to purchase the Mortgage Loans and the
Servicing Rights on the related Closing Date is subject to the satisfaction at
or prior to the related Closing Date of each of the following conditions (any or
all of which may be waived by Purchaser):
(a) Representations and Warranties Correct. Each of the
representations and warranties of Company contained in this Agreement and
the related Term Sheet shall be true and correct in all material respects
as of the related Closing Date.
(b) Compliance with Covenants. Company shall have performed and be
in compliance with, in all material respects, all of its respective
covenants, acts, and obligations to be performed on or prior to the
related Closing Date under this Agreement and the related Term Sheet.
(c) Closing Documents. Company shall have executed and delivered
this Agreement and the related Term Sheet and all other Closing Documents
and all other documents required to be delivered by Company hereunder.
(d) Corporate Actions. All corporate, partnership and other acts
necessary to authorize the execution, delivery, and performance of this
Agreement and the related Term Sheet and the consummation of the
transactions contemplated hereunder shall have been taken by Company.
(e) Mortgage File. The Company shall have delivered to the Purchaser
or its designee all of the Mortgage Loan Documents in accordance with
Section 6.03 and a complete Mortgage File with respect to each Mortgage
Loan.
(f) Material Adverse Effect. There is no pending action, suit,
proceeding or governmental investigation or inquiry against the Company,
which would have a material adverse effect on the business, operations,
financial condition, properties or assets of the Company, the mortgage
loans contemplated herein, or would likely impair materially the ability
of the Company to perform under the terms of this Agreement.
Subsection 8.2 Conditions to Company's Obligations.
The obligation of Company to sell the Mortgage Loans and the
Servicing Rights on the related Closing Date is subject to the satisfaction at
or prior to the related Closing Date of each of the following conditions (any or
all of which may be waived by Company):
(a) Purchase Price. The related Purchase Price, plus accrued
interest pursuant to Section 4, shall have been delivered to Company by
wire transfer of immediately available funds pursuant to Company's
reasonable instructions.
(b) Compliance with Covenants. Purchaser shall have performed and be
in compliance with, in all material respects, all of its respective
covenants, acts, and obligations to be performed under this Agreement and
the related Term Sheet.
(c) Closing Documents. Purchase shall have executed and delivered
this Agreement and the related Term Sheet.
(d) Corporate Actions. All corporate and other acts necessary to
authorize the execution, delivery, and performance of this Agreement and
the related Term Sheet and the consummation of the transactions
contemplated hereunder shall have been taken by Purchaser.
SECTION 9. Closing Documents.
The Closing Documents for the Mortgage Loans and the Servicing
Rights to be purchased on the related Closing Date shall consist of fully
executed originals of the following documents:
1. this Agreement (which shall only be required on the initial
Closing Date), in two (2) counterparts;
2. upon the request of Purchaser, a Custodial Account Letter
Agreement in the form attached as Exhibit 3 hereto;
3. Upon the request of Purchaser, an Escrow Account Letter
Agreement in the form attached as Exhibit 4 hereto;
4. the related Mortgage Loan Schedule, one copy to be attached to
the related Term Sheet;
5. the related Term Sheet; and
6. such other documents related to the purchase and sale of the
Mortgage Loans and the Servicing Rights as the Purchaser may
reasonably request.
SECTION 10. Costs; Assignments. The Purchaser shall pay any
commissions due its salesmen, the expenses of its accountants and attorneys and
the expenses and fees of any broker retained by the Purchaser with respect to
the transaction covered by this Agreement. All other costs and expenses incurred
in connection with the transfer and delivery of the Mortgage Loans and related
Servicing Rights including, without limitation, fees for the preparation of
intervening assignments of Mortgage and Assignments of Mortgage, any termination
fees owed to Company's document custodian, any costs relating to transfer of the
Mortgage File, and other Mortgage Loan records to Purchaser, the costs of
delivering complete master file tape information and other electronically stored
information to the Purchaser, the costs of notifying the Mortgagors, hazard and
flood insurance companies and other third parties as required, the costs of
transferring "lifetime" tax service contracts (as described in Section 14.01) to
the Purchaser, the costs of transferring "lifetime" flood certification
contracts (as described in Section 14.02) to the Purchaser, and the legal fees
and expenses of its attorneys shall be paid by the Company.
SECTION 11. Company's Interim Servicing Obligations. Company, as
independent contract servicer, shall service and administer the Mortgage Loans
during the related Interim Servicing Period in accordance with the terms and
provisions set forth in this Agreement, the related Term Sheet and in the
Servicing Addendum attached hereto as Exhibit 5, which Servicing Addendum is
incorporated herein by reference. The Company shall not take, or fail to take,
any action which would result in the Purchaser's interest in the Mortgage Loans
being adversely affected.
SECTION 12. The Company.
Subsection 12.01 Indemnification
(a) The Company agrees to indemnify the Purchaser, the Successor
Servicer and the Servicing Rights Owner and hold them harmless from and against
any and all claims, losses, damages, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses (including,
without limitation, reasonable attorney's fees and expenses) that the Purchaser,
the Successor Servicer or the Servicing Rights Owner may sustain in any way
related to (i) any act, negligence or omission on the part of the Company or its
designees in receiving, processing, funding or servicing any Mortgage Loan prior
to the related Servicing Transfer Date or otherwise arising from the transfer of
the Servicing Rights provided for in this Agreement; (ii) any negligence, act or
omission by Company or its designees to cause the transfer of the Mortgage Loans
or Servicing Rights to Purchaser unless such inability is the sole result of any
act or omission of the Purchaser; (iii) the failure of the Company to perform in
any way its duties and interim service the Mortgage Loans in strict compliance
with the terms of this Agreement; and (iv) for breach of any covenant,
representation or warranty of the Company contained herein. In addition to the
obligations of the Company set forth in this Subsection 12.01(a), the Purchaser,
the Successor Servicer and Servicing Rights Owner may pursue any and all
remedies otherwise available at law or in equity, including, but not limited to,
the right to seek damages. The Company shall immediately notify the Purchaser
and Servicing Rights Owner if a claim is made by a third party with respect to
this Agreement or the Mortgage Loans, assume (with the consent of the Purchaser
and Servicing Rights Owner and with counsel reasonably satisfactory to the
Purchaser and Servicing Rights Owner) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Purchaser or Servicing Rights Owner in respect of such claim but failure to
so notify the Purchaser and Servicing Rights Owner shall not limit its
obligations hereunder. The Company agrees that it will not enter into any
settlement of any such claim without the consent of the Purchaser and Servicing
Rights Owner, as applicable. The provisions of this Section 12.01 shall survive
termination of this Agreement. For purposes of this paragraph, "Purchaser" shall
mean the Person then acting as the Purchaser under this Agreement and any and
all Persons who previously were "Purchasers" under this Agreement and "Successor
Servicer" shall mean the Person then acting as the Successor Servicer under this
Agreement and any and all Persons who previously were "Successor Servicers"
under this Agreement. Upon the request of the Purchaser, the Company hereby
agrees to execute a recognition agreement recognizing the servicer designated by
the Purchaser therein as the Successor Servicer.
(b) The Purchaser agrees to indemnify the Company and hold it
harmless from and against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses (including, without limitation, reasonable attorney's fees and
expenses) that the Company may sustain in any way related to (i) the breach of
any covenant, representation or warranty of the Purchaser contained herein; (ii)
any negligence, act or omission on the part of Purchaser or its designees in
receiving, processing, funding or servicing any Mortgage Loan after the
Servicing Transfer Date; and (iii) any negligence, act or omission of the
Purchaser or its designees to cause the transfer of the Mortgage Loans or the
Servicing Rights unless such inability is the sole result of any act or omission
of the Company. In addition to the obligations of the Purchaser set forth in
this Subsection 12.01(b), the Company may pursue any and all remedies otherwise
available at law or in equity, including, but not limited to, the right to seek
damages. The Purchaser shall immediately notify the Company if a claim is made
by a third party with respect to this Agreement or the Mortgage Loans, assume
(with the consent of the Company and with counsel reasonably satisfactory to the
Company) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Company in respect of
such claim but failure to so notify the Company shall not limit its obligations
hereunder. The Purchaser agrees that it will not enter into any settlement of
any such claim without the consent of the Company. The provisions of this
Section 12.01 shall survive termination of this Agreement.
Subsection 12.02. Merger or Consolidation of the Company.
The Company shall keep in full force and effect its existence,
rights and franchises as a national association under the laws of its formation
except as permitted herein, and shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans, and to enable the
Company to perform its duties under this Agreement.
Any Person into which the Company may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person shall satisfy any requirements of Section 15
with respect to the qualifications of a successor to the Company.
Subsection 12.03. Limitation on Liability of the Company and Others.
Neither the Company nor any of the officers, employees or agents of
the Company shall be under any liability to the Purchaser for any action taken,
or for refraining from the taking of any action, in good faith in connection
with the interim servicing of the Mortgage Loans pursuant to this Agreement, or
for errors in judgment in connection with the interim servicing of the Mortgage
Loans; provided, however, that this provision shall not protect the Company or
any such person against any breach of warranties or representations made herein,
or failure to perform its obligations materially in compliance with any standard
of care set forth in this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Company and any officer, employee or agent of the Company may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Company shall not be
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its obligation to sell, or duty to interim service, the
Mortgage Loans in accordance with this Agreement and which in its opinion may
involve it in any expenses or liability; provided, however, that the Company
may, with the consent of the Purchaser, undertake any such action which it may
deem necessary or desirable in respect to this Agreement and the rights and
duties of the parties hereto. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities for which the Purchaser shall be liable, the Company shall be
entitled to reimbursement therefor from the Purchaser upon written demand except
when such expenses, costs and liabilities are subject to the Company's
indemnification under Subsections 7.03 or 12.01.
Subsection 12.04 Company Not to Resign.
The Company shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Company and the Purchaser or upon the determination that its servicing duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by the Company in which event the Company may resign as interim
servicer. Any such determination permitting the resignation of the Company as
interim servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Purchaser which Opinion of Counsel shall be in form and
substance reasonably acceptable to the Purchaser. No such resignation shall
become effective until a successor shall have assumed the Company's
responsibilities and obligations hereunder in the manner provided in Section 15.
Subsection 12.05. No Transfer of Servicing.
With respect to the retention of the Company to service the Mortgage
Loans during the Interim Servicing Period, the Company acknowledges that the
Purchaser has acted in reliance upon the Company's independent status, the
adequacy of its servicing facilities, plant, personnel, records and procedures,
its integrity, reputation and financial standing and the continuance thereof.
Without in any way limiting the generality of this Section, during the Interim
Servicing Period, the Company shall not either assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Purchaser, which
consent will not be unreasonably withheld.
SECTION 13. Default
Subsection 13.01. Events of Default.
In case one or more of the following Events of Default by the
Company shall occur and be continuing, that is to say:
(i) any failure by the Company to remit to the Purchaser any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of two (2) Business Days after the date in which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Company by the Purchaser or the Servicing Rights Owner; or
(ii) failure on the part of the Company duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Company set forth in this Agreement or the related Term Sheet which
continues unremedied for a period of thirty (30) days (except that such number
of days shall be fifteen (15) in the case of a failure to pay any premium for
any insurance policy required to be maintained under this Agreement) after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Company by the Purchaser; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Company and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty (60) days; or
(iv) the Company shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of, or relating to, the Company or of, or relating to, all or
substantially all of its property; or
(v) the Company shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) failure by the Company to be in compliance with the "doing
business" or licensing laws of any jurisdiction where a Mortgaged Property is
located; or
(vii) the Company ceases to be approved by either ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac as a mortgage loan seller or servicer for more than thirty days; or
(viii) the Company attempts to assign, sell, pledge or
hypothecate its right to servicing compensation hereunder.
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Purchaser, by notice in writing to the Company may, in
addition to whatever rights the Purchaser may have at law or equity to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the Company as interim servicer under this Agreement. On or
after the receipt by the Company of such written notice, all authority and power
of the Company to interim service the Mortgage Loans under this Agreement shall
on the date set forth in such notice pass to and be vested in the successor
appointed pursuant to Section 15.
If any of the Mortgage Loans are MERS Mortgage Loans, in connection with
the termination or resignation (as described in Subsection 12.04) of the Company
hereunder, either (i) the successor to the Company shall represent and warrant
that it is a member of MERS in good standing and shall agree to comply in all
material respects with the rules and procedures of MERS in connection with the
servicing of the Mortgage Loans that are registered with MERS, or (ii) the
predecessor Company shall cooperate with the successor either (x) in causing
MERS to execute and deliver an assignment of Mortgage in recordable form to
transfer the Mortgage from MERS to the Purchaser and to execute and deliver such
other notices, documents and other instruments as may be necessary or desirable
to effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on
the MERS(R) System to the successor or (y) in causing MERS to designate on the
MERS(R) System the successor as the servicer of such Mortgage Loan.
Subsection 13.02. Waiver of Defaults. The Purchaser may waive any
default by the Company in the performance of its obligations hereunder and its
consequences. Upon any such waiver of a past default, such default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived.
SECTION 14. Termination; Servicing Transfer. With respect to a
Mortgage Loan, the respective obligations and responsibilities of the Company,
as interim servicer, shall terminate at the expiration of the related Interim
Servicing Period unless earlier terminated in accordance with the terms of this
Agreement or the related Term Sheet, without the payment of any termination fee.
Upon request from the Purchaser in connection with any such termination, the
Company shall prepare, execute and deliver, any and all documents and other
instruments, place in the Purchaser's possession all Mortgage Files, and 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, to
prepare notices to the mortgagors and related insurance companies, or otherwise,
at the Company's sole expense. The Company agrees to cooperate with the
Purchaser and such successor in effecting the termination of the Company's
responsibilities and rights hereunder as interim servicer, including, without
limitation, the transfer to such successor for administration by it of all cash
amounts which shall at the time be credited by the Company to the Custodial
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans. The Company shall follow the servicing transfer instructions of the
Purchaser contained herein and attached hereto as Exhibit 7 with respect to
servicing transfer procedures. Company and Purchaser will each, at the request
of the other, execute and deliver to each other all such documents that either
may reasonably request in order to perfect the transfer, assignment and delivery
to Purchaser of the Servicing Rights to be sold, transferred, assigned and
delivered as of the consummation of this Agreement. The Company shall not be
entitled to any transfer fee.
Subsection 14.01.Obligations of the Company Prior to the Servicing
Transfer Date.
The Company shall take, or cause to be taken, the following actions
with respect to the Mortgage Loans prior to the related Servicing Transfer Date
(or within such time as may otherwise be specified below) in order to effect the
transfer of the Servicing Rights to the Purchaser on the related Servicing
Transfer Date:
(a) Preliminary Test Tape. On or prior to the related Closing Date,
the Company shall forward to the Purchaser a preliminary test tape (including
master file, escrow file, payee file, ARM master file, ARM history, all HMDA
data required by the Agencies, etc.) containing all of the Mortgage Loans as of
the date mutually agreed upon by the Company and the Purchaser. The preliminary
test tape shall include all field descriptions and record layouts;
(b) Notice to Hazard Insurers. The Company shall inform by written
notice all hazard insurance companies and/or their agents of the transfer and
request a change in the loss payee mortgage endorsement clause to the
Purchaser's name. The Company shall provide the Purchaser with a copy of the
notification letter and an officer's written certification that all hazard
insurance companies have been notified by an identical letter;
(c) Notice to Mortgage Insurance Companies. The Company shall inform
by written notice all mortgage insurance companies providing any Primary
Mortgage Insurance Policy of the change in insured's name on each such policy to
the Purchaser's name. The Company shall provide the Purchaser with a copy of one
notification letter and an officer's written certification that all such
mortgage insurance companies have been notified by an identical letter;
(d) Tax Service Contracts. The Company shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably acceptable to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser or, in the alternative, the Company
shall notify the Purchaser as to any Mortgage Loans for which it has not
procured the requisite contract and shall pay to the Purchaser a fee for each
such Mortgage Loan equal to the fee or premium that is customarily charged for
each such contract, as determined by the Purchaser in its reasonable discretion;
(e) Flood Certifications. The Company shall have obtained a life of
loan, transferable flood certification contract for each Mortgage Loan and shall
assign all such contracts to the Purchaser or, in the alternative, the Company
shall notify the Purchaser as to any Mortgage Loans for which it has not
procured the flood certification referenced above and shall pay to the Purchaser
a fee for each such Mortgage Loan equal to the fee that is customarily charged
for each such contract, as determined by the Purchaser in its reasonable
discretion;
(f) Notice to Mortgagors. The Company shall, no later than fifteen
(15) days prior to the related Servicing Transfer Date, inform in writing all
Mortgagors of the change in servicer from the Company to the Purchaser, all in
accordance with applicable law. The Company shall obtain the Purchaser's
approval of the form of such notifications prior to their mailing. The Company
acknowledges that the Purchaser's review of this notice shall not be a review
for statutory or regulatory compliance purposes, and that the Company shall have
the sole responsibility for such compliance. The Company shall provide the
Purchaser with a copy of one notification letter and an officer's written
certification that all Mortgagors have been notified by an identical letter;
(g) Payment of Real Estate Taxes. The Company shall make or cause to
be made all payments of all real estate taxes on the Mortgage Loans which (i)
will be delinquent on or prior to the related Servicing Transfer Date, (ii) are
required to be paid within thirty (30) days after the related Servicing Transfer
Date to receive a discount, or (iii) will be delinquent within thirty (30) days
after the related Servicing Transfer Date. If tax bills have not been received
by the Company by the related Servicing Transfer Date on any Mortgage Loans
subject to this subsection, the Company shall obtain and pay all tax bills
subsequent to the related Servicing Transfer Date and the Purchaser will
promptly reimburse the Company upon receipt from the Company of documentation
evidencing such payment. On non-impounded accounts, the Company shall ensure
that all taxes which would otherwise be delinquent by the related Servicing
Transfer Date, if not paid by such date, have been paid. With respect to each of
the Mortgage Loans which do not have an impound or escrow account maintained for
the payment of taxes and insurance, the Company shall hold harmless and
indemnify the Purchaser against any and all costs, expenses, penalties, fines,
damages and judgments of whatever kind arising from the Company's failure to
pay, or cause to be paid, any delinquent taxes or tax penalties outstanding as
of the related Servicing Transfer Date;
(h) Payment of Insurance Premiums. The Company shall pay all hazard
and flood insurance and Primary Mortgage Insurance Policy premiums required to
be paid prior to the related Servicing Transfer Date or within thirty (30) days
after the related Servicing Transfer Date on all impounded accounts relating to
the Mortgage Loans and shall ensure that all premiums required to be paid prior
to the related Servicing Transfer Date by the Mortgagors on non-impounded
accounts have been paid. With respect to each of the Mortgage Loans which do not
have an impound or escrow account maintained for the payment of taxes and
insurance, the Company shall hold harmless and indemnify the Purchaser against
any and all costs, expenses, penalties, fines, damages and judgments of whatever
kind arising from the Company's failure to ensure that the related Mortgagor is
maintaining adequate insurance coverage on the Mortgaged Property at all times
prior to the related Servicing Transfer Date in accordance with the terms of any
document contained in the Mortgage File or any applicable law or regulation
including, without limitation, adequate flood insurance coverage for all
Mortgaged Properties located within an "A" or "V" flood hazard area;
(i) ARM Adjustments. With respect to each adjustable rate Mortgage
Loan whose index value for any Interest Adjustment Date is available on or prior
to the related Servicing Transfer Date, the Company shall make all such
adjustments and shall inform the related Mortgagors of such adjustments; and
(j) Notice to Sub-servicers. On or prior to the related Closing
Date, the Company shall inform by written notice all sub-servicers who perform
servicing obligations with respect to the Mortgage Loans of the sale of the
Mortgage Loans to the Purchaser and of the transfer of the Servicing Rights to
the Purchaser on the related Servicing Transfer Date. The Company shall provide
the Purchaser with a copy of the notification letter and an officer's
certification that all sub-servicers have been notified by an identical letter.
Subsection 14.02 Obligations of the Company after the Servicing
Transfer Date.
Without limiting the generality of Section 14., the Company shall
take, or cause to be taken, the following actions with respect to the Mortgage
Loans within three (3) Business Days following the related Servicing Transfer
Date (or within such time as may otherwise be specified below):
(a) Tape. The Company shall furnish to the Purchaser all available
computer or like records requested by the Purchaser reflecting the status of
payments, balances and other pertinent information with respect to the Mortgage
Loans as of the related Servicing Transfer Date (including, without limitation,
(i) master file, (ii) escrow file, (iii) payee file, which includes
comprehensive tax and insurance information identifying payee, payee address,
next payment due date, next amount payable and policy number/parcel number, (iv)
ARM master file, (v) ARM history, and (vi) all HMDA data required by the
Agencies). Such records shall include magnetic tapes reflecting all computer
files maintained on the Mortgage Loans and shall include reports in electronic
format as specifically requested by the Purchaser;
(b) Mortgage File. If the Company has not already done so, the
Company shall have forwarded a complete Mortgage File with respect to each
Mortgage Loan;
(c) Accounting Reports. The Company shall furnish to the Purchaser
copies of all accounting reports relating to the Mortgage Loans as of the
related Servicing Transfer Date including, without limitation, a trial balance
and reports of collections, delinquencies, prepaids, curtailments, escrow
payments, escrow balances, partial payments, partial payment balances and other
like information with respect to the Mortgage Loans;
(d) Other Documentation. The Company shall provide the Purchaser any
and all further documents reasonably required by the Purchaser in order to fully
transfer to the Purchaser possession of all tangible evidence of the Servicing
Rights and escrow, impound and trust funds transferred hereunder;
(e) Transfer of Escrow Funds and Other Proceeds. The Company shall
transfer to the Purchaser, by wire transfer to the account designated by the
Purchaser, an amount equal to the sum of (i) the Net Escrow Payments, (ii) all
undistributed insurance loss draft funds, (iii) all unapplied funds received by
the Company, (iv) all unapplied interest on escrow balances accrued through the
related Servicing Transfer Date, (v) all buydown funds held by the Company as of
the related Servicing Transfer Date, and (vi) all other amounts held by the
Company with respect to the Mortgage Loans as of the related Servicing Transfer
Date for which the Company is not entitled to retain (collectively, the "Escrow
Proceeds"). Within five (5) Business Days following the Purchaser's receipt of
the Escrow Proceeds, the Company and the Purchaser shall resolve any
discrepancies between the Company's accounting statement and the Purchaser's
reconciliation with respect thereto. No later than ten (10) Business Days
following the related Servicing Transfer Date, the Company or the Purchaser, as
the case may be, shall transfer to the other, by wire transfer to the designated
account, any amounts to which the other party is entitled; and
(f) Mortgage Payments Received After Servicing Transfer Date. The
Company shall promptly forward to the Purchaser any payment received by it after
the related Servicing Transfer Date with respect to any of the Mortgage Loans,
whether such payment is in the form of principal, interest, taxes, insurance,
loss drafts, insurance refunds, etc., in the original form received, unless such
payment has been received in cash or by the Company's lock box facility, in
which case the Company shall forward such payment in a form acceptable to the
Purchaser. The Company shall notify the Purchaser of the particulars of the
payment, which notification shall set forth sufficient information to permit
timely and appropriate processing of the payment by the Purchaser.
Subsection 14.03. Limited Power of Attorney. If requested by
Purchaser, Company shall furnish to Purchaser a limited power of attorney in the
form attached here as Exhibit 10 appointing Purchaser and any of its employees
to act as Company's attorney in fact to execute documents pertaining to the
discharge and satisfaction of Mortgages which were recorded in Company's name
and to endorse checks received by the Purchaser from Mortgagor after the related
Servicing Transfer Date in the Company's name.
Subsection 14.04. Supplementary Information. From time to time prior
to the related Servicing Transfer Date for the servicing of any given Mortgage
Loan, Company shall furnish to Purchaser such information supplementary to the
information contained in the documents and schedules delivered pursuant hereto
and file such reports as purchaser may reasonably request.
Subsection 14.06. Reasonable Access. Between the date of this
Agreement and the related Servicing Transfer Date, Company shall give Purchaser
its authorized representatives reasonable access to all documents, files, books,
records, accounts, offices and other facilities of Company related to the
Mortgage Loans and Servicing Rights transferred hereby, and permit Purchaser to
make such inspections thereof as Purchaser may reasonably request during normal
business hours, provided, however, that such investigation or inspection shall
be conducted in such a manner as to not interfere unreasonably with Company's
business operations.
SECTION 15. Successor to the Company. Prior to termination of the
Company's responsibilities and duties as interim servicer under this Agreement
pursuant to Section 13 or 14, the Purchaser shall (i) succeed to and assume all
of the Company's responsibilities, rights, duties and obligations as interim
servicer under this Agreement, or (ii) appoint a successor which shall succeed
to all rights and assume all of the responsibilities, duties and liabilities of
the Company as interim servicer under this Agreement provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000. In
connection with such appointment and assumption, the Purchaser may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree. In the event that the Company's
duties, responsibilities and liabilities as interim servicer under this
Agreement should be terminated pursuant to the aforementioned Sections, the
Company shall discharge such duties and responsibilities during the period from
the date it acquires knowledge of such termination until the effective date
thereof with the same degree of diligence and prudence which it is obligated to
exercise under this Agreement, and shall take no action whatsoever that might
impair or prejudice the rights or financial condition of the Purchaser or such
successor. The termination of the Company as interim servicer pursuant to the
aforementioned Sections shall not become effective until a successor shall be
appointed pursuant to this Section 15 and shall in no event relieve the Company
of the representations and warranties made pursuant to Subsections 7.01 and 7.02
and the remedies available to the Purchaser under Subsection 7.03 or 12.01, it
being understood and agreed that the provisions of such Subsections 7.01, 7.02,
7.03 or 12.01 shall be applicable to the Company notwithstanding any such
resignation or termination of the Company, or the termination of this Agreement.
The Successor Servicer shall be an intended third party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.
SECTION 16. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed, by registered or certified mail, return receipt requested, or by
overnight courier or facsimile, when received by the other party at the address
as follows:
(i) if to the Company:
First National Bank of Nevada
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secondary Marketing
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
First National Bank of Nevada
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or 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, by signed receipt if by overnight courier, or
by written electronic confirmation if by facsimile).
SECTION 17. Severability Clause. Any part, provision, representation
or warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
SECTION 18. Counterparts. This Agreement and each Term Sheet may be
executed simultaneously in any number of counterparts. Each counterpart shall be
deemed to be an original, and all such counterparts shall constitute one and the
same instrument.
SECTION 19. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York without regard to any
conflicts of laws provisions.
SECTION 20. Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and the Company is selling the
Mortgage Loans and the Servicing Rights, and not a debt instrument of the
Company or another security. Accordingly, the parties hereto each intend to
treat the transaction for federal income tax purposes as a sale by the Company,
and a purchase by the Purchaser, of the Mortgage Loans and the Servicing Rights.
The Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Loan Files to determine the characteristics of the Mortgage Loans which
shall affect the federal income tax consequences of owning the Mortgage Loans
and the Servicing Rights and the Company shall cooperate with all reasonable
requests made by the Purchaser in the course of such review.
SECTION 21. Successors and Assigns. This Agreement shall bind and
inure to the benefit of and be enforceable by the Company and the Purchaser and
the respective successors and assigns of the Company and the Purchaser. The
Purchaser may assign this Agreement to any Person to whom any Mortgage Loan is
transferred whether pursuant to a sale or financing and to any Person to whom
the servicing or master servicing of any Mortgage Loan is sold or transferred.
Upon any such assignment, the Person to whom such assignment is made shall
succeed to all rights and obligations of the Purchaser under this Agreement. A
form of such assignment is attached as Exhibit 8 hereto. This Agreement shall
not be assigned, pledged or hypothecated by the Company to a third party without
the consent of the Purchaser.
SECTION 22. Waivers. No term or provision of this Agreement and a
Term Sheet may be waived or modified unless such waiver or modification is in
writing and signed by the party against whom such waiver or modification is
sought to be enforced.
SECTION 23. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
SECTION 24. General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision;
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration; and
(g) the headings used in this Agreement are for reference purposes
only and shall not have any effect on the substantive interpretation of the
provisions of this Agreement.
SECTION 25. Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 26. Nonsolicitation. From and after the Closing Date, the
Company agrees that it will not take any action or permit or cause any action to
be taken by any of its agents or affiliates, or by any independent contractors
on the Company's behalf, to personally, by telephone or mail, solicit the
borrower or obligor under any Mortgage Loan to refinance a Mortgage Loan, in
whole or in part, without (i) the prior written consent of the Purchaser; or
(ii) written notice from the related borrower or obligor under a Mortgage Loan
of such party's intention to refinance such Mortgage Loan. It is understood and
agreed that all rights and benefits relating to the solicitation of any
mortgagors to refinance any Mortgage Loans shall be transferred to the Purchaser
pursuant to this Purchase Agreement on the Closing Date and the Company shall
take no action to undermine these rights and benefits. The Company shall (a) not
sell the name of any Mortgagor, and (b) use its best efforts to prevent the sale
of the name of any Mortgagor by the Company's wholly owned subsidiaries and
affiliates, to any person or entity for the direct or indirect purpose of
allowing such person or entity to solicit the refinancing of any Mortgage Loan.
Notwithstanding the foregoing, it is understood and agreed that promotions
undertaken by the Company or any affiliate of the Company which are directed to
the general public at large, including, without limitation, mass mailing,
internet, and email solicitations based, in all instances, on commercially
acquired mailing lists (which may not be specifically targeted at the
Mortgagors,) and newspaper, radio and television advertisements shall not
constitute solicitation under this Section 26.
SECTION 27. Survival. All covenants, agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement.
SECTION 28. Integration. This Agreement and the applicable Term
Sheet contain the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and supercede any prior or contemporaneous
understandings, agreements, covenants, statements, representations or
warranties, if any, with regard to the subject matter hereof. If there is any
conflict between the terms of this Agreement and any Term Sheet dated subsequent
to this Agreement, the provisions of such Term Sheet shall control with respect
to Mortgage Loans sold pursuant to such Term Sheet.
SECTION 29. Availability of Information. The Purchaser agrees to
make available, or to cause any servicer of the Mortgage Loans to make
available, to the Company on a monthly basis, any information relating to the
performance of the Mortgage Loans, including, without limitation, delinquency,
default and prepayment information. Such information may be provided in a form
convenient to Purchaser or servicer, as the case may be.
SECTION 30. Loan Sales and Securitization. With respect to the
Mortgage Loans, the Company and the Purchaser acknowledge and agree that the
Purchaser or any prospective purchaser may sell or transfer from time to time
some or all of the Mortgage Loans or the related Servicing Rights to one or more
purchasers in connection with whole loan sales, servicing rights sales and/or
securitizations of the Mortgage Loans (each, a "Transaction). With respect to
any such Transaction, the Company shall use its reasonable best efforts to
assist the Purchaser, and any prospective purchaser, if the Purchaser or such
prospective purchaser so requests, in connection with each Transaction, which
assistance shall include, but not be limited to, (i) providing any information
relating to the Mortgage Loans necessary to assist in the preparation of any
disclosure documents, and (ii) restating certain representations and warranties
as set forth in the Purchase Agreement as to the Company and the Mortgage Loans
on the date of the Transaction as of the related Closing Date. The Company
agrees to enter into an assignment, assumption and recognition agreement
pursuant to which the Company assigns the certain restated representations and
warranties and remedies to the Transaction as of the related Closing Date. The
Company shall indemnify the Purchaser, each Affiliate of the Purchaser
participating in any such Transaction, each person who controls the Purchaser or
such Affiliate, and the successor servicer and hold them harmless against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
the Purchaser or the successor servicer may sustain in any way related to the
provision by the Company of any information regarding the Company, the Mortgage
Loans, or the servicing thereof, or the Company's Underwriting Guidelines
attached hereto in connection with any Transaction. For purposes of the previous
sentence, "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement.
SECTION 31. Confidential Information. The Company understands and
agrees that this Agreement, any other agreements executed in connection with the
sale contemplated hereunder, any agreements executed in connection with the
securitization of the Mortgage Loans, and any offering circulars or other
disclosure documents produced in connection with such securitization are
confidential and proprietary to the Purchaser, and the Company agrees to hold
such documents confidential and not to divulge such documents to anyone except
(a) to the extent required by law or judicial order or to enforce its rights or
remedies under this letter agreement or the Agreements, (b) to the extent such
information enters into the public domain other than through the wrongful act of
the Seller, or (c) as is necessary in working with legal counsel, auditors,
agents, taxing authorities or other governmental agencies. The rights and
obligations set forth in this paragraph shall survive the Closing Date and shall
not merge into the closing documents but shall be independently enforceable by
the parties hereto.
IN WITNESS WHEREOF, the Company and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
FIRST NATIONAL BANK OF NEVADA
Company
By:
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY
Purchaser
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
EXHIBIT 1
FORM OF TERM SHEET
This TERM SHEET (the "Term Sheet") dated _____________, between First
National Bank of Nevada, a national association, located at ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company") and
____________________, a _________corporation, located at ______________________
______________________ (the "Purchaser") is made pursuant to the terms and
conditions of that certain Mortgage Loan Purchase and Interim Servicing
Agreement (the "Agreement") dated as of _________, 2001, between the Company and
the Purchaser, the provisions of which are incorporated herein as if set forth
in full herein, as such terms and conditions may be modified or supplemented
hereby. All initially capitalized terms used herein unless otherwise defined
shall have the meanings ascribed thereto in the Agreement.
The Purchaser hereby purchases from the Company and the Company hereby
sells to the Purchaser, all of the Company's right, title and interest in and to
the Mortgage Loans described on the Mortgage Loan Schedule annexed hereto as
Schedule I, pursuant to and in accordance with the terms and conditions set
forth in the Agreement, as same may be supplemented or modified hereby.
Hereinafter, the Company shall service the Mortgage Loans for the benefit of the
Purchaser and all subsequent transferees of the Mortgage Loans pursuant to and
in accordance with the terms and conditions set forth in the Agreement.
1. Definitions
For purposes of the Mortgage Loans to be sold pursuant to this Term Sheet,
the following terms shall have the following meanings:
Aggregate Principal Balance
(as of the Cut-Off Date): $[________]
Closing Date: [__________]
Cut-off Date: [__________]
Initial Weighted Average
Mortgage Loan Remittance Rate: [__________]
Mortgage Loan: [__________]
Purchase Price Percentage: [__________]
Servicing Transfer Date: [__________]
Additional Closing Conditions:
In addition to the conditions specified in the Agreement, the obligation of each
of the Company and the Purchaser is subject to the fulfillment, on or prior to
the applicable Closing Date, of the following additional conditions: [None].
Additional Loan Documents:
In addition to the contents of the Mortgage File specified in the Agreement, the
following documents shall be delivered with respect to the Mortgage Loans:
[None]
[Additional] [Modification] of Representations and Warranties:
[In addition to the representations and warranties set forth in the Agreement,
as of the date hereof, the Company makes the following additional
representations and warranties with respect to the Mortgage Loans: [None].
[Notwithstanding anything to the contrary set forth in the Agreement, with
respect to each Mortgage Loan to be sold on the Closing Date, the representation
and warranty set forth in Section ______ of the Agreement shall be modified to
read as follows:]
[(a) As of the related Closing Date, all of the Mortgage Loans will have an
actual paid-to-date of [____________] (or later) and will be due for the
[__________] scheduled monthly payment (or later).]
Except as modified herein, Section ______ of the Agreement shall remain in full
force and effect as of the date hereof.
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.
FIRST NATIONAL BANK OF NEVADA
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SCHEDULE I
MORTGAGE LOAN SCHEDULE
EXHIBIT 2
CONTENTS OF EACH 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 and
which shall be delivered to the Purchaser or upon Purchaser's request its
designee:
1. Mortgage Loan Documents.
2. Residential loan application.
3. Mortgage Loan closing statement.
4. Verification of employment and income, if applicable.
5. Verification of acceptable evidence of source and amount of down
payment, if applicable.
6. Credit report on Mortgagor.
7. Residential appraisal report.
8. Photograph of the Mortgaged Property.
9. Survey of the Mortgaged Property.
10. Copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
11. All required disclosure statements and statement of Mortgagor
confirming receipt thereof.
12. If available, termite report, structural engineer's report, water
portability and septic certification.
13. Sales Contract, if applicable.
14. Hazard insurance policy.
15. Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files,
correspondence, current and historical computerized data files, and
all other processing, underwriting and closing papers and records
which are customarily contained in a mortgage loan file and which
are required to document the Mortgage Loan or to service the
Mortgage Loan.
16. Amortization schedule, if available.
17. Payment history for each of the Mortgage Loans.
EXHIBIT 3
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
________________________ __, 2004
To: _____________________________
(the "Depository")
As the Company under the Mortgage Loan Purchase and Interim
Servicing Agreement, dated as of March 24, 2004, we hereby authorize and request
you to establish an account, as a Custodial Account, to be designated as
"__________, in trust for the Purchaser and various Mortgagors, Mortgage Loans,
P&I Account." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Company. You may refuse any deposit which would
result in violation of the requirement that the account be fully insured as
described below. This letter is submitted to you in duplicate. Please execute
and return one original to us.
___________________
By: _____________________________________
Name: _____________________________________
Title _____________________________________
Date: _____________________________________
The undersigned, as Depository, hereby certifies that the
above-described account has been established under Account Number ___________ at
the office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above.
Depository
By: _____________________________________
Name: _____________________________________
Title _____________________________________
Date: _____________________________________
EXHIBIT 4
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
______ _, 2004
To: _______________________________
(the "Depository")
As the Company under the Mortgage Loan Purchase and Interim
Servicing Agreement, dated as of March 24, 2004, we hereby authorize and request
you to establish an account, as an Escrow Account, to be designated as
"_____________, in trust for the Purchaser and various Mortgagors, Mortgage
Loans, T&I Account." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Company. You may refuse any deposit which would
result in violation of the requirement that the account be fully insured as
described below. This letter is submitted to you in duplicate. Please execute
and return one original to us.
___________________
By: _____________________________________
Name: _____________________________________
Title _____________________________________
Date: _____________________________________
The undersigned, as Depository, hereby certifies that the
above-described account has been established under Account Number ___________ at
the office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above.
Depository
By: _____________________________________
Name: _____________________________________
Title _____________________________________
Date: _____________________________________
EXHIBIT 5
SERVICING ADDENDUM
SECTION 11. Servicing.
Subsection 11.00 Additional Definitions.
Ancillary Income: Additional servicing compensation in the form of
assumption fees, late payment charges and other miscellaneous fees. Prepayment
penalties or premiums due in connection with a Principal Prepayment shall not
constitute Ancillary Income and shall be deposited in the Custodial Account as
set forth in Subsection 11.04. The Company's right to Ancillary Income shall
terminate on the Servicing Transfer Date.
BIF: The Bank Insurance Fund, or any successor thereto.
Code: The Internal Revenue Code of 1986, or any successor statute
thereto.
Determination Date: With respect to each Distribution Date, the
close of business of the last day of the month preceding the month in which such
Distribution Date occurs.
Distribution Date: The fifth (5th) Business Day of each month,
commencing on the fifth (5th) Business Day of the month next following the month
in which the Cut-off Date occurs.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Company pursuant to this Agreement), a determination made by the Company
that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Company, in its reasonable good faith judgment, expects to
be finally recoverable in respect thereof have been so recovered. The Company
shall maintain records, prepared by a servicing officer of the Company, of each
Final Recovery Determination.
Interim Servicing Fee: With respect to each Mortgage Loan, the
amount of the servicing fee the Purchaser shall pay to the Company, which shall,
for each month, be equal to $12.00 per Mortgage Loan per month. Such fee shall
be payable monthly. If the Interim Servicing Period includes any partial
calendar month, the Interim Servicing Fee for such month shall be pro rated at a
per diem rate based upon a 30-day month. For each Mortgage Loan, such servicing
fee will be payable solely from amounts representing interest actually received
by the Company from the related Mortgagor.
Permitted Investments: Any one or more of the following obligations
or securities:
(i) direct obligations of, and obligations fully guaranteed by the
United States of America or any agency or instrumentality of the
United States of America the obligations of which are backed by the
full faith and credit of the United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or the short-term deposit rating and/or the long-term unsecured
debt obligations or deposits of such depository institution or trust
company at the time of such investment or contractual commitment
providing for such investment are rated in one of the two highest
rating categories by each Rating Agency and (b) any other demand or
time deposit or certificate of deposit that is fully insured by the
FDIC;
(iii) repurchase obligations with a term not to exceed thirty (30)
days and with respect to (a) any security described in clause (i)
above and entered into with a depository institution or trust
company (acting as principal) described in clause (ii)(a) above;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of
America or any state thereof that are rated in one of the two
highest rating categories by each Rating Agency at the time of such
investment or contractual commitment providing for such investment;
provided, however, that securities issued by any particular
corporation will not be Permitted Investments to the extent that
investments therein will cause the then outstanding principal amount
of securities issued by such corporation and held as Permitted
Investments to exceed 10% of the aggregate outstanding principal
balances of all of the Mortgage Loans and Permitted Investments;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on
a specified date not more than one year after the date of issuance
thereof) which are rated in one of the two highest rating categories
by each Rating Agency at the time of such investment;
(vi) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency as
evidenced in writing by each Rating Agency; and
(vii) any money market funds the collateral of which consists of
obligations fully guaranteed by the United States of America or any
agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America (which may include repurchase obligations
secured by collateral described in clause (i)) and other securities
and which money market funds are rated in one of the two highest
rating categories by each Rating Agency.
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
investment or security is purchased at a price greater than par.
Prime Rate: The prime rate announced to be in effect from time to
time as published as the average rate in the Wall Street Journal (Northeast
Edition).
Qualified Depository: A depository, the accounts of which are
insured by the FDIC through the BIF or the SAIF and the short term debt ratings
and the long term deposit ratings of which are rated in the highest rating
category by each Rating Agency.
REMIC: A "real estate mortgage investment conduit" as such term is
defined in the Code, as amended.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Company of its interim
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement, administrative or judicial proceedings, or any legal work or advice
specifically related to servicing the Mortgage Loans, including but not limited
to, foreclosures, bankruptcies, condemnations, drug seizures, elections,
foreclosures by subordinate or superior lienholders, and other legal actions
incidental to the interim servicing of the Mortgage Loans (provided that such
expenses are reasonable and that the Company specifies the Mortgage Loan(s) to
which such expenses relate and, upon Purchaser's request, provides documentation
supporting such expense (which documentation would be acceptable to ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac), and provided further that any such enforcement, administrative
or judicial proceeding does not arise out of a breach of any representation,
warranty or covenant of the Company hereunder), (c) the management and
liquidation of the Mortgaged Property if the Mortgaged Property is acquired in
full or partial satisfaction of the Mortgage, (d) taxes, assessments, water
rates, sewer rates and other charges which are or may become a lien upon the
Mortgaged Property, and Primary Mortgage Insurance Policy premiums and fire and
hazard insurance coverage, (e) any expenses reasonably sustained by the Company
with respect to the liquidation of the Mortgaged Property in accordance with the
terms of this Agreement and (f) compliance with the obligations under this
Agreement.
Subsection 11.01 Company to Act as Servicer.
Company, as independent contract servicer, shall interim service and administer
the Mortgage Loans in accordance with Accepted Servicing Practices and this
Agreement and shall have full power and authority, acting alone, to do or cause
to be done any and all things in connection with such servicing and
administration which the Company may deem necessary or desirable and consistent
with the terms of this Agreement. Without limiting the generality of the
foregoing, the Company shall not take, or fail to take, any action which would
result in the Purchaser's interest in the Mortgage Loans being adversely
affected.
Consistent with the terms of this Agreement and Accepted Servicing
Practices, the Company may waive, modify or vary any term of any Mortgage Loan
or consent to the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor if in the Company's reasonable and
prudent determination such waiver, modification, postponement or indulgence is
not materially adverse to the Purchaser; provided, however, that unless the
Company has obtained the prior written consent of the Purchaser, the Company
shall not permit any modification with respect to any Mortgage Loan that would
change the Mortgage Interest Rate, defer or forgive the payment thereof or of
any principal or interest payments, reduce the outstanding principal amount
(except for actual payments of principal), make additional advances of
additional principal or extend the final maturity date on such Mortgage Loan.
Without limiting the generality of the foregoing, during the Interim Servicing
Period the Company shall continue, and is hereby authorized and empowered, to
execute and deliver on behalf of itself, and the Purchaser, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Property. If required by the Company, the Purchaser
shall furnish the Company with powers of attorney at the Purchaser's option and
other documents necessary or appropriate to enable the Company to carry out its
servicing and administrative duties under this Agreement.
In interim servicing and administering the Mortgage Loans, the Company
shall employ procedures including collection procedures and exercise the same
care that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to Accepted
Servicing Practices. If Company elects to utilize a subservicer to perform any
or all of Company's duties hereunder, Company shall remain liable as though such
duties were performed directly by Company and Company shall be responsible for
the payment of any and all fees of any such subservicer.
Subsection 11.02 Collection of Mortgage Loan Payments.
Continuously from the related Closing Date until the related Servicing
Transfer Date, the Company shall proceed diligently to collect all payments due
under each Mortgage Loan when the same shall become due and payable and shall,
to the extent such procedures shall be consistent with this Agreement and the
terms and provisions of any related Primary Mortgage Insurance Policy, follow
such collection procedures as it follows with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Further, the
Company shall take special care in ascertaining and estimating annual ground
rents, taxes, assessments, water rates, fire and hazard insurance premiums,
mortgage insurance premiums, and all other charges that, as provided in the
Mortgage, will become due and payable to the end that the installments payable
by the Mortgagors will be sufficient to pay such charges as and when they become
due and payable.
Subsection 11.03 Realization Upon Defaulted Mortgage Loans.
(a) The Company shall use its best efforts, consistent with the
procedures that the Company would use in servicing loans for its own account, to
foreclose upon or otherwise comparably convert the ownership of such Mortgaged
Properties as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Subsection 11.01. The Company shall use its best efforts to realize upon
defaulted Mortgage Loans in such a manner as will maximize the receipt of
principal and interest by the Purchaser, taking into account, among other
things, the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage, the Company shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion (i)
that such restoration will increase the proceeds of liquidation of the related
Mortgage Loan to the Purchaser after reimbursement to itself for such expenses,
and (ii) that such expenses will be recoverable by the Company through Insurance
Proceeds or Liquidation Proceeds from the related Mortgaged Property, as
contemplated in Subsection 11.05. In the event that any payment due under any
Mortgage Loan is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period, the
Company shall take such action as it shall deem to be in the best interest of
the Purchaser. If a Mortgage Loan becomes sixty (60) or more days delinquent or
subject to a foreclosure proceeding, then with respect to the Servicing Rights
to such Mortgage Loan the related Servicing Transfer Date shall be the close of
business on the next Business Day if so requested by the Purchaser. In the event
that any payment due under any Mortgage Loan remains delinquent for a period of
ninety (90) days or more, and the Purchaser has not exercised its right to
accelerate the related Servicing Transfer Date as described in the previous
sentence, the Company shall commence foreclosure proceedings, provided that
prior to commencing foreclosure proceedings, the Company shall notify the
Purchaser in writing of the Company's intention to do so, and the Company shall
not commence foreclosure proceedings if the Purchaser objects to such action
within ten (10) Business Days of receiving such notice. The Company shall notify
the Purchaser in writing of the commencement of foreclosure proceedings. In such
connection, the Company shall be responsible for all costs and expenses incurred
by it in any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the related Mortgaged Property, as contemplated in
Subsection 11.05.
(b) Notwithstanding the foregoing provisions of this Subsection 11.03,
with respect to any Mortgage Loan as to which the Company has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property, the Company shall not either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action,
with respect to, such Mortgaged Property if, as a result of any such action, the
Purchaser would be considered to hold title to, to be a mortgagee-in-possession
of, or to be an owner or operator of such Mortgaged Property within the meaning
of the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Company
has received approval from the Purchaser and has also previously determined,
based on its reasonable judgment and a prudent report prepared by a Person who
regularly conducts environmental audits using customary industry standards,
that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Purchaser to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any
hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required
under any federal, state or local law or regulation, or that if any
such materials are present for which such action could be required,
that it would be in the best economic interest of the Purchaser to
take such actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this Subsection
11.03 shall be advanced by the Company, subject to the Company's right to be
reimbursed therefor from the Custodial Account as provided in Subsection
11.05(vii).
If the Company determines, in consultation with the Purchaser, as
described above, that it is in the best economic interest of the Purchaser to
take such actions as are necessary to bring any such Mortgaged Property into
compliance with applicable environmental laws, or to take such action with
respect to the containment, clean-up or remediation of hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials affecting
any such Mortgaged Property, then the Company shall take such action as it deems
to be in the best economic interest of the Purchaser. The cost of any such
compliance, containment, cleanup or remediation shall be advanced by the
Company, subject to the Company's right to be reimbursed therefor from the
Custodial Account as provided in Subsection 11.05(vii).
(c) The Company shall also promptly notify the Purchaser upon learning of
any state insolvency or federal bankruptcy proceedings in which any Mortgagor is
seeking relief or is the defendant debtor, or of the death or incapacity or any
Mortgagor or guarantor.
Subsection 11.04 Establishment of Custodial Accounts; Deposits in
Custodial Accounts.
The Company shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
with a Qualified Depository, in the form of time deposit or demand accounts.
Funds deposited in the Custodial Account shall at all times be insured by the
FDIC up to the FDIC insurance limits, or must be invested in Permitted
Investments for the benefit of the Purchaser. Upon the request of the Purchaser,
the Company shall deliver to the Purchaser a Custodial Account Letter Agreement
in the form of Exhibit 3.
The Company shall deposit in the Custodial Account on a daily basis within
two Business Days of receipt, and retain therein the following payments and
collections received by it subsequent to the related Cut-off Date:
(i) all payments on account of principal including Principal
Prepayments (and any prepayment penalty fees collected from Mortgagors for any
Principal Prepayments) on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Subsections 11.10 and 11.11, other than proceeds to be
held in the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with Accepted
Servicing Practices, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property which
are not released to the Mortgagor in accordance with Accepted Servicing
Practices, the loan documents or applicable law;
(vi) all proceeds of any Mortgage Loan repurchased in accordance
with Subsection 7.03;
(vii) any amounts required to be deposited by the Company pursuant
to Subsection 11.11 in connection with the deductible clause in any blanket
hazard insurance policy. Such deposit shall be made from the Company's own
funds, without reimbursement therefor;
(viii) any amounts required to be deposited by the Company in
connection with any REO Property pursuant to Subsection 11.13; and
(ix) any amounts required to be deposited in the Custodial Account
pursuant to Subsections 11.19 or 11.20.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, Ancillary Income need not be deposited by the Company in the
Custodial Account. Such Custodial Account shall be an Eligible Account. Any
interest or earnings on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Company and the
Company shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Subsection 11.05(iv). The Company shall give
notice to the Purchaser of the location of the Custodial Account when
established and prior to any change thereof.
Subsection 11.05 Permitted Withdrawals From the Custodial Account.
The Company may, from time to time, withdraw from the Custodial Account
for the following purposes:
(i) to make distributions to the Servicing Rights Owner in the
amounts and in the manner provided for in Subsection 11.14;
(ii) to reimburse itself for unreimbursed Servicing Advances, the
Company's right to reimburse itself pursuant to this subclause (ii) with respect
to any Mortgage Loan being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be collected by the
Company from the Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of such reimbursement, the Company's right thereto
shall be prior to the rights of the Purchaser, except that, where the Company is
required to repurchase a Mortgage Loan, pursuant to Subsection 7.03, the
Company's right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to Subsection 7.03 and all other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loans;
(iii) to pay to itself pursuant to Subsection 11.21 as servicing
compensation (a) any interest earned on funds in the Custodial Account (all such
interest to be withdrawn monthly not later than each Distribution Date), and (b)
the Interim Servicing Fee;
(iv) to pay to itself with respect to each Mortgage Loan that has
been repurchased pursuant to Subsection 7.03, all amounts received thereon and
not distributed as of the date on which the related Repurchase Price is
determined;
(v) to pay, or to reimburse the Company for advances in respect of,
expenses incurred in connection with any Mortgage Loan pursuant to Subsection
11.03(b), but only to the extent of amounts received in respect of the Mortgage
Loans to which such expense is attributable;
(vi) to reimburse itself for any expenses that are reimbursable
pursuant to Subsection 11.03; and
(vii) to clear and terminate the Custodial Account on the
termination of this Agreement.
The Company shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (ii), (iv),
(v) and (vi) above. The Company shall provide written notification in the form
of an Officers' Certificate to the Purchaser, on or prior to the next succeeding
Distribution Date, upon making any withdrawals from the Custodial Account
pursuant to subclause (v) above.
Subsection 11.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Company shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, with a Qualified Depository, in the form
of time deposit or demand accounts. Upon the request of the Purchaser, the
Company shall deliver to the Purchaser an Escrow Account Letter Agreement in the
form of Exhibit 4.
The Company shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein, (i) all Escrow Payments collected on account of the
Mortgage Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement, and (ii) all Insurance Proceeds
which are to be applied to the restoration or repair of any Mortgaged Property.
The Company shall make withdrawals therefrom only to effect such payments as are
required under this Agreement, and for such other purposes as shall be as set
forth or in accordance with Subsection 11.08. The Company shall be entitled to
retain any interest paid on funds deposited in the Escrow Account by the
depository institution other than interest on escrowed funds required by law to
be paid to the Mortgagor and, to the extent required by law, the Company shall
pay interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account is non-interest bearing or that interest paid thereon is insufficient
for such purposes.
Subsection 11.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Company (i) to
effect timely payments of ground rents, taxes, assessments, water rates, hazard
insurance premiums, Primary Mortgage Insurance Policy premiums, if applicable,
and comparable items, (ii) to reimburse the Company for any Servicing Advance
made by the Company with respect to a related Mortgage Loan but only from
amounts received on the related Mortgage Loan which represent late payments or
collections of Escrow Payments thereunder, (iii) to refund to the Mortgagor any
funds as may be determined to be overages, (iv) for transfer to the Custodial
Account in accordance with the terms of this Agreement, (v) for application to
the restoration or repair of the Mortgaged Property, (vi) to pay to the Company,
or to the Mortgagor to the extent required by law, any interest paid on the
funds deposited in the Escrow Account, or (vii) to clear and terminate the
Escrow Account on the termination of this Agreement.
Subsection 11.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates
and other charges which are or may become a lien upon the Mortgaged Property and
the status of Primary Mortgage Insurance Policy premiums and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges, including insurance renewal premiums and shall effect
payment thereof prior to the applicable penalty or termination date and at a
time appropriate for securing maximum discounts allowable, employing for such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Company in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage and applicable law. To the
extent that the Mortgage does not provide for Escrow Payments, the Company shall
determine that any such payments are made by the Mortgagor at the time they
first become due. The Company assumes full responsibility for the timely payment
of all such bills and shall effect timely payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its own funds to
effect such payments.
Subsection 11.09 Transfer of Accounts.
The Company may transfer the Custodial Account or the Escrow Account to a
different Qualified Depository institution from time to time. Such transfer
shall be made only upon obtaining the prior written consent of the Purchaser..
In any case, the Custodial Account and Escrow Account shall be Eligible
Accounts.
Subsection 11.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan fire, and
hazard insurance with extended coverage as is customary in the area where the
Mortgaged Property is located in an amount which is at least equal to the lesser
of (i) the amount necessary to fully compensate for any damage or loss to the
improvements which are a part of such property on a replacement cost basis or
(ii) the outstanding principal balance of the Mortgage Loan, in each case in an
amount not less than such amount as is necessary to prevent the Mortgagor and/or
the Mortgagee from becoming a co-insurer. If the Mortgaged Property is in an
area identified on a Flood Hazard Boundary Map or Flood Insurance Rate Map
issued by the Flood Emergency Management Agency as having special flood hazards
and such flood insurance has been made available, the Company will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the lesser
of (i) the outstanding principal balance of the Mortgage Loan or (ii) the
maximum amount of insurance which is available under the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended.
The Company also shall maintain on any REO Property, fire and hazard insurance
with extended coverage in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property plus accrued interest at the Mortgage
Interest Rate and related Servicing Advances, liability insurance and, to the
extent required and available under the National Flood Insurance Act of 1968 or
the Flood Disaster Protection Act of 1973, as amended, flood insurance in an
amount as provided above. Pursuant to Subsection 11.04, any amounts collected by
the Company under any such policies other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or REO Property, or released to the Mortgagor in accordance with the
Company's normal servicing procedures, shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Subsection 11.05. Any cost incurred
by the Company in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Purchaser, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance need be required by the Company of the Mortgagor or
maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall be
endorsed with standard mortgagee clauses with loss payable to the Company, or
upon request to the Purchaser, and shall provide for at least thirty (30) days'
prior written notice of any cancellation, reduction in the amount of, or
material change in, coverage to the Company. The Company shall not interfere
with the Mortgagor's freedom of choice in selecting either his insurance carrier
or agent, provided, however, that the Company shall not accept any such
insurance policies from insurance companies unless such companies currently
reflect a General Policy Rating of A:VI or better in Best's Key Rating Guide and
are licensed to do business in the state wherein the property subject to the
policy is located.
Subsection 11.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Company shall obtain and maintain a mortgage
impairment or blanket policy issued by an issuer that has an A.M. Best rating of
A:VI or better insuring against hazard losses on all of Mortgaged Properties
securing the Mortgage Loans, then, to the extent such policy provides coverage
in an amount equal to the amount required pursuant to Subsection 11.10 and
otherwise complies with all other requirements of Subsection 11.10, the Company
shall conclusively be deemed to have satisfied its obligations as set forth in
Subsection 11.10, it being understood and agreed that such policy may contain a
deductible clause, in which case the Company shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with Subsection 11.10, and there shall have been one or more
losses which would have been covered by such policy, deposit in the Custodial
Account the amount not otherwise payable under the blanket policy because of
such deductible clause. In connection with its activities as servicer of the
Mortgage Loans, the Company agrees to prepare and present, on behalf of the
Purchaser, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy. Upon request of the Purchaser, the
Company shall cause to be delivered to the Purchaser a certified true copy of
such policy and a statement from the insurer thereunder that such policy shall
in no event be terminated or materially modified without thirty (30) days' prior
written notice to the Purchaser.
Subsection 11.12 Fidelity Bond, Errors and Omissions Insurance.
The Company shall maintain, at its own expense, a blanket fidelity bond
and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac on all officers, employees or other persons acting in any capacity with
regard to the Mortgage Loans to handle funds, money, documents and papers
relating to the Mortgage Loans. The fidelity bond and errors and omissions
insurance shall be in the form of the Mortgage Banker's Blanket Bond and shall
protect and insure the Company against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such persons.
Such fidelity bond shall also protect and insure the Company against losses in
connection with the failure to maintain any insurance policies required pursuant
to this Agreement and the release or satisfaction of a Mortgage Loan without
having obtained payment in full of the indebtedness secured thereby. No
provision of this Subsection 11.12 requiring the fidelity bond and errors and
omissions insurance shall diminish or relieve the Company from its duties and
obligations as set forth in this Agreement. The minimum coverage under any such
bond and insurance policy shall be at least equal to the corresponding amounts
required by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇ Servicing Guide or by ▇▇▇▇▇▇▇ Mac in
the ▇▇▇▇▇▇▇ Mac Seller's and Servicers' Guide. Upon request of the Purchaser,
the Company shall cause to be delivered to the Purchaser a certified true copy
of the fidelity bond and insurance policy and a statement from the surety and
the insurer that such fidelity bond or insurance policy shall in no event be
terminated or materially modified without thirty (30) days' prior written notice
to the Purchaser.
Subsection 11.13 Title, Management and Disposition of REO Property.
In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Purchaser or its designee. Any Person or
Persons holding such title other than the Purchaser shall acknowledge in writing
that such title is being held as nominee for the benefit of the Purchaser.
The Company shall either itself or through an agent selected by the
Company, manage, conserve, protect and operate each REO Property (and may
temporarily rent the same) in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed. If a REMIC election is or is to be made with respect to the arrangement
under which the Mortgage Loans and any REO property are held, the Company shall
manage, conserve, protect and operate each REO Property in a manner which does
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code or result in the receipt by such
REMIC of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" within
the meaning of Section 860G(c)(2) of the Code. The Company shall cause each REO
Property to be inspected promptly upon the acquisition of title thereto and
shall cause each REO Property to be inspected at least annually thereafter. The
Company shall make or cause to be made a written report of each such inspection.
Such reports shall be retained in the Mortgage File and copies thereof shall be
forwarded by the Company to the Purchaser. The Company shall use its best
efforts to dispose of the REO Property as soon as possible and shall sell such
REO Property in any event within three (3) years after title has been taken to
such REO Property, unless the Company determines, and gives appropriate notice
to the Purchaser, that a longer period is necessary for the orderly liquidation
of such REO Property. If a period longer than three years is necessary to sell
any REO property, (i) the Company shall report monthly to the Purchaser as to
the progress being made in selling such REO Property and (ii) if, with the
written consent of the Purchaser, a purchase money mortgage is taken in
connection with such sale, such purchase money mortgage shall name the Company
as mortgagee, and a separate servicing agreement among the Company and the
Purchaser shall be entered into with respect to such purchase money mortgage.
Notwithstanding the foregoing, if a REMIC election is made with respect to the
arrangement under which the Mortgage Loans and the REO Property are held, such
REO Property shall be disposed of within three (3) years or such other period as
may be permitted under Section 860G(a)(8) of the Code.
With respect to each REO Property, the Company shall segregate and hold
all funds collected and received in connection with the operation of the REO
Property separate and apart from its own funds or general assets and shall
deposit or cause to be deposited, on a daily basis within one Business Day of
receipt in the Custodial Account all revenues received with respect to the
related REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Subsection 11.10 hereof and the
fees of any managing agent acting on behalf of the Company.
The Company shall furnish to the Purchaser on each Distribution Date, an
operating statement for each REO Property covering the operation of each REO
Property for the previous month. Such operating statement shall be accompanied
by such other information as the Purchaser shall reasonably request.
Each REO Disposition shall be carried out by the Company at such price and
upon such terms as the Purchaser shall direct. If as of the date title to any
REO Property was acquired by the Company there were outstanding unreimbursed
Servicing Advances with respect to the REO Property, the Company, upon an REO
Disposition of such REO Property, shall be entitled to reimbursement for any
related unreimbursed Servicing Advances from proceeds received in connection
with such REO Disposition. The proceeds from the REO Disposition, net of any
payment to the Company as provided above, shall be deposited in the Custodial
Account within one Business Day of receipt.
Subsection 11.14 Distributions.
On each Distribution Date, the Company shall distribute to the Servicing
Rights Owner all amounts credited to the Custodial Account as of the close of
business on the preceding Determination Date, net of charges against or
withdrawals from the Custodial Account pursuant to Subsection 11.05.
All distributions made to the Purchaser on each Distribution Date shall be
based on the Mortgage Loans owned and held by the Purchaser, and shall be made
by wire transfer of immediately available funds to the account of the Purchaser
at a bank or other entity having appropriate facilities therefor, if the
Purchaser shall have so notified the Company or by check mailed to the address
of the Purchaser.
With respect to any remittance received by the Purchaser on or after the
second Business Day following the Business Day on which such payment was due,
the Company shall pay to the Purchaser interest on any such late payment at an
annual rate equal to Prime Rate, adjusted as of the date of each change, plus
three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be paid by the Company to the
Purchaser on the date such late payment is made and shall cover the period
commencing with the day following such second Business Day and ending with the
Business Day on which such payment is made, both inclusive. Such interest shall
be remitted along with such late payment. The payment by the Company of any such
interest shall not be deemed an extension of time for payment or a waiver of any
Event of Default by the Company.
Subsection 11.15 Remittance Reports.
No later than the fifth Business Day each month, the Company shall furnish
to the Purchaser or its designee a computer tape and a hard copy of the monthly
data, together with such other information with respect to the Mortgage Loans as
the Purchaser may reasonably require to allocate distributions made pursuant to
this Agreement and provide appropriate statements with respect to such
distributions. On the same date, the Company shall forward to the Purchaser by
overnight mail a computer readable magnetic tape containing the information set
forth in the remittance report with respect to the related Distribution Date.
Subsection 11.16 Statements to the Purchaser.
No later than the Distribution Date, the Company shall forward to the
Purchaser or its designee a statement prepared by the Company setting forth the
status of the Custodial Account as of the close of business on such Distribution
Date and showing, for the period covered by such statement, the aggregate amount
of deposits into and withdrawals from the Custodial Account of each category of
deposit specified in Subsection 11.04 and each category of withdrawal specified
in Subsection 11.05.
Upon the request of the Purchaser, in connection with any Transaction, the
Company shall furnish to the Purchaser a complete, true and correct Mortgage
Loan Schedule with respect to the related Mortgage Loans.
In addition, not more than ninety (90) days after the end of each calendar
year, the Company shall furnish to each Person who was the Purchaser at any time
during such calendar year, (i) as to the aggregate of remittances for the
applicable portion of such year, an annual statement in accordance with the
requirements of applicable federal income tax law, and (ii) listing of the
principal balances of the Mortgage Loans outstanding at the end of such calendar
year.
The Company shall prepare and file any and all tax returns, information
statements or other filings required to be delivered to any governmental taxing
authority or to any Purchaser pursuant to any applicable law with respect to the
Mortgage Loans and the transactions contemplated hereby. In addition, the
Company shall provide the Purchaser with such information concerning the
Mortgage Loans as is necessary for the Purchaser to prepare its federal income
tax return as any Purchaser may reasonably request from time to time.
Subsection 11.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Subsection 11.13, with
respect to any REO Property, the Company shall furnish to the Purchaser a
statement covering the Company's efforts in connection with the sale of such REO
Property and any rental of such REO Property incidental to the sale thereof for
the previous month, together with the operating statement. Such statement shall
be accompanied by such other information as the Purchaser shall reasonably
request.
Subsection 11.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed-in-lieu of foreclosure, the Company
shall deliver to the Purchaser within three Business Days after completion of
the foreclosure sale a liquidation report with respect to such Mortgaged
Property.
Subsection 11.19 Assumption Agreements.
The Company shall, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause applicable thereto; provided, however, that the Company
shall not exercise any such rights if prohibited by law from doing so or if the
exercise of such rights would impair or threaten to impair any recovery under
the related Primary Mortgage Insurance Policy, if any. If the Company reasonably
believes it is unable under applicable law to enforce such "due-on-sale" clause,
the Company, upon prior Purchaser consent, shall enter into an assumption
agreement with the person to whom the Mortgaged Property has been conveyed or is
proposed to be conveyed, pursuant to which such person becomes liable under the
Mortgage Note and, to the extent permitted by applicable state law, the
Mortgagor remains liable thereon. Where an assumption is allowed pursuant to
this Subsection 11.19, the Company, with the prior written consent of the
insurer under the Primary Mortgage Insurance Policy, if any, is authorized to
enter into a substitution of liability agreement with the person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the related Mortgage Note. Any
such substitution of liability agreement shall be in lieu of an assumption
agreement.
In connection with any such assumption or substitution of liability, the
Company shall follow the underwriting guidelines of Company attached as Exhibit
9 hereto. With respect to an assumption or substitution of liability, the
Mortgage Interest Rate, the amount of the Monthly Payment, and the final
maturity date of such Mortgage Note may not be changed. The Company shall notify
the Purchaser that any such substitution of liability or assumption agreement
has been completed by forwarding to the Purchaser the original of any such
substitution of liability or assumption agreement, which document shall be added
to the related Mortgage File and shall, for all purposes, be considered a part
of such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraphs of this Subsection or any other
provision of this Agreement, the Company shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which the
Company may be restricted by law from preventing, for any reason whatsoever. For
purposes of this Subsection 11.19, the term "assumption" is deemed to also
include a sale of the Mortgaged Property subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.
Subsection 11.20 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Company of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Company will immediately notify the Purchaser
by a certification of a servicing officer of the Company (a "Servicing
Officer"), which certification shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the Custodial Account pursuant to Subsection 11.04
have been or will be so deposited, and shall request execution of any document
necessary to satisfy the Mortgage Loan and delivery to it of the portion of the
Mortgage File held by the Purchaser or the Purchaser's designee. Upon receipt of
such certification and request, the Purchaser, shall promptly release the
related mortgage documents to the Company and the Company shall prepare and
process any satisfaction or release. No expense incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Custodial Account or the Purchaser.
In the event the Company satisfies or releases a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage or should
it otherwise prejudice any right the Purchaser may have under the mortgage
instruments, the Company, upon written demand, shall remit to the Purchaser the
then outstanding principal balance of the related Mortgage Loan by deposit
thereof in the Custodial Account. The Company shall maintain the fidelity bond
insuring the Company against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.
From time to time and as appropriate for the interim servicing or
foreclosure of any Mortgage Loan, including for this purpose collection under
any Primary Mortgage Insurance Policy, the Purchaser shall, upon request of the
Company and delivery to the Purchaser of a servicing receipt signed by a
Servicing Officer, release the requested portion of the related Mortgage File
held by the Purchaser to the Company. Such servicing receipt shall obligate the
Company to return the related Mortgage documents to the Purchaser when the need
therefor by the Company no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Custodial Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Company has delivered to the Purchaser a certificate of
a Servicing Officer certifying as to the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated, the servicing receipt shall be released by
the Purchaser to the Company.
Subsection 11.21 Servicing Compensation.
As compensation for its services hereunder, the Company shall be entitled
to receive on the Mortgage Loans the amounts provided for as the Company's
Interim Servicing Fee and Ancillary Income. Ancillary Income shall be retained
by the Company to the extent not required to be deposited in the Custodial
Account. The Company shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided for.
Subsection 11.22 Notification of Adjustments.
On each Adjustment Date, the Company shall make interest rate adjustments
for each Mortgage Loan in compliance with the requirements of the related
Mortgage and Mortgage Note. The Company shall execute and deliver the notices
required by each Mortgage and Mortgage Note regarding interest rate adjustments.
The Company also shall provide timely notification to the Purchaser of all
applicable data and information regarding such interest rate adjustments and the
Company's methods of implementing such interest rate adjustments. Upon the
discovery by the Company or the Purchaser that the Company has failed to adjust
a Mortgage Interest Rate or a Monthly Payment pursuant to the terms of the
related Mortgage Note and Mortgage, the Company shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss caused
thereby without reimbursement therefor.
Subsection 11.23 Access to Certain Documentation.
The Company shall provide to any federal or state banking or insurance
regulatory authority that may exercise authority over the Purchaser access to
the documentation regarding the Mortgage Loans interim serviced by the Company
required by applicable laws and regulations. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the Company.
Subsection 11.24 Reports and Returns to be Filed by the Company.
The Company shall file information reports with respect to the receipt of
mortgage interest received in a trade or business, reports of foreclosures and
abandonments of any Mortgaged Property and information returns relating to
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
Subsection 11.25 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Company shall not take
any action, cause the REMIC to take any action or fail to take (or fail to cause
to be taken) any action that, under the REMIC Provisions, if taken or not taken,
as the case may be, could (i) endanger the status of the REMIC as a REMIC or
(ii) result in the imposition of a tax upon the REMIC (including but not limited
to the tax on "prohibited transactions" as defined in Section 860F(a)(2) of the
Code and the tax on "contributions" to a REMIC set forth in Section 860G(d) of
the Code) unless the Company has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
EXHIBIT 6
[RESERVED]
EXHIBIT 7
SERVICING TRANSFER INSTRUCTIONS
EXHIBIT 8
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This Assignment, Assumption and Recognition Agreement (the "Agreement") is
made and entered into as of [___________], 200[_] (the "Closing Date"), among
[__________________________], a [__________] corporation, having an address at
[___________________] (the "Assignor"), [_____________________________], a
[___________________] corporation, having an address at
[_________________________________] (the "Assignee"), and [__________________],
a [___________] corporation, having an address at [_________________] (the
"Company"). Any capitalized term used and not otherwise defined herein shall
have the meaning assigned to such term in the Purchase Agreement (as defined
below).
In consideration of the mutual promises and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Assignment and Assumption. Except as expressly provided for herein, the
Assignor hereby grants, transfers and assigns to the Assignee (a) all of its
right, title and interest as "Purchaser" in, to and under that certain
Mortgage Loan Purchase and Interim Servicing Agreement dated as of
[_______________], 200[__] and duly executed by the Company and [ ]
("Purchaser") (the "Purchase Agreement") attached hereto as Exhibit A, only
with respect to the Mortgage Loans, and (b) all of its right, title and
interest in and to each of the mortgage loans identified in Exhibit B hereto
(the "Mortgage Loans"). Notwithstanding anything to the contrary contained
herein, the Assignor is not assigning to the Assignee any of its right,
title and interest as "Purchaser" in, to and under the Purchase Agreement
with respect to any other mortgage loan other than those set forth on
Exhibit B and furthermore, the Assignor is not assigning to the Assignee,
but instead is expressly reserving for the Servicing Rights Owner's
exclusive right and benefit only, the following:
a) any of the Servicing Rights relating to the Mortgage Loans, as
the term "Servicing Rights" is defined in the Purchase
Agreement and further described herein;
b) all rights and benefits accorded the Servicing Rights Owner
under the Purchase Agreement;
Except as is otherwise expressly provided herein, the Assignor makes no
representations, warranties or covenants to the Assignee and the Assignee
acknowledges that the Assignor has no obligations to the Assignee under the
terms of the Purchase Agreement, or otherwise relating to the transaction
contemplated herein (including, but not limited to, any obligation to
repurchase any of the Mortgage Loans or to indemnify the Assignee), and that
all such obligations are assumed by the Company.
The Assignor acknowledges and agrees that upon execution of this Agreement,
[____________] shall become the "Purchaser" under the Purchase Agreement,
and all representations, warranties and covenants by the "Company" to the
"Purchaser" under such Purchase Agreement including, but not limited to, the
rights to require repurchase of any Mortgage Loan and to receive
indemnification, shall accrue to Assignee by virtue of this Agreement.
2. Consideration. In consideration for the sale of the Mortgage Loans to the
Assignee, the Assignee agrees to pay to the Assignor the amount referenced
in that certain trade confirmation dated as of [____________], 200[__] (the
"Confirmation"), and duly executed by the Assignor and the Assignee (the
"Purchase Price"). The Assignee shall pay the Purchase Price to the Assignor
by wire transfer of immediately available funds to the account designated by
the Assignor on or before the Closing Date, as defined in this Confirmation.
3. Servicing of the Mortgage Loans. [From and after the related Servicing
Transfer Date, the Servicing Rights Owner shall service the Mortgage Loans
for the Assignee in accordance with that certain Servicing Agreement dated
as of [________________] , by and between the Servicing Rights Owner and the
Assignee (the "Servicing Agreement").] Prior to the related Servicing
Transfer Date, the Company shall service the Mortgage Loans on an interim
basis on behalf of the Assignee and the Servicing Rights Owner in accordance
with the Purchase Agreement. The address of the "Purchaser" set forth in
Section 16 of the Purchase Agreement shall be changed to read as follows:
[___________________]
[___________________]
[___________________]
Attention: [________]
The wire transfer instructions for distributions to the Assignee on each
Distribution Date shall be as follows:
Bank:
ABA Routing Number:
For Credit to:
Attn:
4. Status of Purchase Agreement. The Assignor represents and warrants that (a)
the Purchase Agreement attached hereto as Exhibit A is a true, complete and
accurate copy of the Purchase Agreement, (b) the Purchase Agreement with
respect to each of the Mortgage Loans is in full force and effect as of the
date hereof, (c) the Purchase Agreement has not been amended or modified in
any respect, (d) there has been no waiver or modification or any agreement
to waive or modify any provision, nor has any notice of termination been
given, under the Purchase Agreement, (e) the Assignor is not in default, and
has received no notice of default, under the Purchase Agreement, and, to the
best of the Assignor's knowledge, the Company is not in default under the
Purchase Agreement, and (f) to the best of the Assignor's knowledge, there
are no offsets, claims or defenses available to the Company with respect to
the Purchase Agreement or Mortgage Loans.
5. Covenants, Representations and Warranties of the Assignor. The Assignor
represents and warrants to, and covenants with, the Assignee that:
a. The Assignor is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
and has all requisite corporate power and authority to acquire, own and
sell the Mortgage Loans;
b. The Assignor has full corporate power and authority to execute, deliver
and perform under this Agreement, and to consummate the transactions set
forth herein. The execution, delivery and performance of the Assignor of
this Agreement, and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary
corporate action of the Assignor. This Agreement has been fully executed
and delivered by the Assignor and constitutes the valid and legally
binding obligation of the Assignor enforceable against the Assignor in
accordance with its respective terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights and to the application of
equitable principles in any proceeding, whether at law or in equity;
c. No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is
required to be obtained or made by the Assignor in connection with the
execution, delivery or performance by the Assignor of this Agreement, or
the consummation by it of the transactions contemplated hereby;
d. There is no action, suit, proceeding, investigation or litigation
pending or, to the Assignor's knowledge, threatened, which either in any
instance or in the aggregate, if determined adversely to the Assignor,
would adversely affect the sale of the Mortgage Loans to the Assignee,
the execution, delivery or enforceability of this Agreement, or the
Assignor's ability to perform its obligations under this Agreement;
e. Immediately prior to payment of the Purchase Price for the Mortgage
Loans, the Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans free from any and all claims
and encumbrances whatsoever.
f. The Assignor shall use its reasonable commercial efforts to cause to be
delivered to the Assignee all of the Mortgage Loan Documents in
accordance with Section 6.03 of the Purchase Agreement.
g. Each of the terms and conditions set forth in the Purchase Agreement
which are required to be satisfied on or before the Closing Date by the
Assignor in order for the Assignor to acquire title to the Mortgage
Loans has been satisfied unless waived by the prejudiced party(ies).
h. The Assignor shall deliver to the Assignee on or before the Closing Date
the following documents:
(1) a fully executed Agreement and Purchase Agreement; and
(2) the Mortgage Loan Schedule;
6. Covenants, Representations and Warranties of the Company. The Company
represents and warrants to, and covenants with, the Assignee that:
a. The representations and warranties made by the Company under Subsection
7.01 and Subsection 7.02 of the Purchase Agreement are true and correct in
all material respects as of the related Closing Date and no event has
occurred which, with notice or the passage of time, would constitute a
default under the Purchase Agreement.
b. The Company acknowledges and agrees that upon execution of this
Agreement, [___________] shall become the "Purchaser" under the Purchase
Agreement but not the Servicing Rights Owner, and all representations,
warranties and covenants by the Company as the "Seller" thereunder,
including, but not limited to, the representations, warranties and covenants
to repurchase any Mortgage Loan and to indemnify the "Purchaser", shall
accrue to [__________] by virtue of this Agreement.
7. Covenants, Representations and Warranties of Assignee. The Assignee agrees
to be bound, as "Purchaser", by all of the terms, covenants and conditions
of the Agreement and the Mortgage Loans, and from and after the date hereof,
the Assignee assumes for the benefit of each of the Company and the Assignor
all of the Assignor's obligations as "Purchaser" thereunder, with respect to
the Mortgage Loans (except for any obligations relating to the Servicing
Rights);
8. Governing Law. This Agreement shall be construed in accordance with the laws
of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with the laws of
[________________], except to the extent preempted by federal law.
9. Conflict with Purchase Agreement. To the extent there is any conflict
between the terms of the Purchase Agreement and this Agreement, the latter
shall be controlling, notwithstanding anything to the contrary contained in
the Purchase Agreement.
10. Capitalized Terms. All capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the
Purchase Agreement.
11. Counterparts. This Agreement may be executed in any number of counterparts.
Each counterpart shall be deemed to be an original and all such counterparts
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
[Assignor_______________________] [Assignee _____________________]
the Assignor the Assignee
BY:_____________________________ BY:____________________________
ITS:____________________________ ITS:____________________________
[Company_______________________]
the Company
BY:_____________________________
ITS:____________________________
EXHIBIT 9
COMPANY'S UNDERWRITING GUIDELINES
EXHIBIT 10
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, pursuant to the terms of the Mortgage Loan Purchase and Interim
Servicing Agreement dated as of ________, 200_ (the "Agreement"), between
__________ ("Company") and [ ] ("Purchaser"), Company is selling certain
mortgage loans (the "Mortgage Loans") to Purchaser;
AND WHEREAS, Company is providing this Limited Power of Attorney pursuant
to the Agreement;
NOW, THEREFORE, ______ does hereby make, constitute and appoint Purchaser,
Company's true and lawful agent and attorney-in-fact with respect to each
Mortgage Loan in Company's name, place and stead: (i) to complete (to the extent
necessary) and to cause to be submitted for filing or recording in the
appropriate public filing or recording offices, all assignments of mortgage,
deeds of trust or similar documents, assignments or reassignments of rents,
leases and profits, in each case in favor of Purchaser, and all Form UCC-2 or
UCC-3 assignments of financing statements and all other comparable instruments
or documents with respect to the Mortgage Loans which are customarily and
reasonably necessary or appropriate to assign agreements, documents and
instruments pertaining to the Mortgage Loans, and to evidence, provide notice of
and perfect such assignments and conveyances in favor of Purchaser in the public
records of the appropriate filing and recording offices; (ii) to file or record
in the appropriate public filing or recording offices, all other Mortgage Loan
documents to be recorded under the terms of the Agreement or any such Mortgage
Loan which have not been submitted for filing or recordation by Company on or
before the date hereof or which have been so submitted but are subsequently lost
or returned unrecorded or unfiled as a result of actual or purported defects
therein, in order to evidence, provide notice of and perfect such documents in
the public records of the appropriate filing and recording offices; and (iii) to
do and perform all acts in connection with the servicing, administration and
management of the Mortgage Loans, including but not limited to:
(1) execute and deliver customary consents or waivers and other instruments
and documents,
(2) consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages,
(3) collect any insurance proceeds and other liquidation proceeds,
(4) effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan,
(5) execute and deliver any and all instruments of satisfaction or
cancellation or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties, and
(6) execute all documents customarily and reasonably necessary and appropriate
for the transfer post-foreclosure of the previously Mortgaged Properties
to third parties, and then to collect the sales proceeds from that
transfer.
The enumeration of particular powers herein is not intended in any way to
limit the grant to Purchaser as Company's attorney-in-fact of full power and
authority with respect to the Mortgage Loans to complete (to the extent
necessary), file and record any documents, instruments or other writings
referred to above as fully, to all intents and purposes, as Company might or
could do if personally present, hereby ratifying and confirming whatsoever such
attorney-in-fact shall and may do by virtue hereof; and Company agrees and
represents to those dealing with such attorney-in-fact that they may rely upon
this Limited Power of Attorney until termination thereof under the provisions of
Article III below. Any and all third parties dealing with Purchaser as Company's
attorney-in-fact may rely completely, unconditionally and conclusively on the
authority of Purchaser, as applicable, and need not make any inquiry about
whether Purchaser is acting pursuant to the Agreement. Any purchaser, title
insurance company or other third party may rely upon a written statement by
Purchaser that any particular Mortgage Loan or related mortgaged real property
in question is subject to and included under this Limited Power of Attorney and
the Agreement.
Any act or thing lawfully done hereunder by Purchaser shall be binding on
Company and Company's successors and assigns.
This Limited Power of Attorney shall continue in full force and effect
until the earliest occurrence of any of the following events:
(i) the transfer by Purchaser of its servicing obligations under the
Agreement to another servicer;
(ii) with respect to any Mortgage Loan, such Mortgage Loan is no longer a
part of the Agreement; and
(iii) the termination of the Agreement in accordance with its terms.
Nothing herein shall be deemed to amend or modify the Agreement or the
respective rights, duties or obligations of Company under the Agreement, and
nothing herein shall constitute a waiver of any rights or remedies thereunder.
Capitalized terms used but not defined herein have the respective meanings
assigned thereto in the Agreement.
IN WITNESS WHEREOF, Company has caused this instrument to be executed and
its corporate seal to be affixed hereto by its officer duly authorized as of
_____ ___, 200_.
_________________________________________
By:______________________________________
Name: __________________________________
Title: __________________________________
ACKNOWLEDGEMENT
STATE OF_______________ )
) ss:
COUNTY OF ____________ )
On this ___ day of __________, 200__, before me appeared
_______________________, to me personally known, who, being by me duly sworn did
say that he/she is the _____________________ of _____________, and that the seal
affixed to the foregoing instrument is the corporate seal of said corporation,
and that said instrument was signed and sealed in behalf of said corporation by
authority of its board of directors, and said ____________ acknowledged said
instrument to be the free act and deed of said corporation.
Name:____________________________________
Notary Public in and for said
County and State
My Commission Expires:
______________________
EXHIBIT 11
NEW JERSEY LOAN STIPULATIONS
Goldman will purchase the following loans subject to the New Jersey Home
Ownership Act of 2002 ("Act"), predicated upon the acceptance of the below
outlined stipulations:
Home Loans
Purchase Money
Rate-term refinances
Cash-out refinances
Junior Liens
Rate-term refinances
Cash-out refinances
Stipulations:
-- No Mortgage Loan is a `high cost home loan', `home improvement loan',
`manufactured home loan', or junior lien `covered loan' as defined under the
Act.
-- `Covered' Rate-term refinances and `Covered' Cash-out refinances do not
comprise more than 5% of the pool, in the aggregate.
-- The points and fees threshold calculations under the Act include yield-spread
premiums.
-- All loans originated under the Act will be subject to up to 100% due
diligence subject to the 20% due diligence maximum.
-- Mortgage Loan files must contain tangible net benefit and high-cost
worksheets.
-- Seller will make the Representation that all Mortgage Loans subject to New
Jersey's `flipping' prohibition, as defined under the Act, are in compliance
with the `reasonable, tangible net benefit' standard, as defined under the Act.
EXHIBIT O
FLOW SERVICING RIGHTS PURCHASE AND SERVICING AGREEMENT, DATED AUGUST 22,
2005, BETWEEN ▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY AND M&T MORTGAGE CORPORATION
FLOW SERVICING RIGHTS PURCHASE AND SERVICING AGREEMENT
among
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,
Owner
and
M&T MORTGAGE CORPORATION
Servicer
Dated as of August 22, 2005
FIXED AND ADJUSTABLE RATE, ALT-A RESIDENTIAL MORTGAGE LOANS
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions...................................................
ARTICLE II
SERVICING
Section 2.01 Sale of Servicing Rights......................................
Section 2.02 Purchase Price................................................
Section 2.03 The Servicer to Act as the Servicer...........................
Section 2.04 Liquidation of Mortgage Loans.................................
Section 2.05 Collection of Mortgage Loan Payments..........................
Section 2.06 Establishment of and Deposits to Custodial Account............
Section 2.07 Permitted Withdrawals From Custodial Account..................
Section 2.08 Establishment of and Deposits to Escrow Account...............
Section 2.09 Permitted Withdrawals From Escrow Account.....................
Section 2.10 Payment of Taxes, Insurance and Other Charges.................
Section 2.11 Protection of Accounts........................................
Section 2.12 Maintenance of Hazard Insurance...............................
Section 2.13 Maintenance of Blanket Hazard Insurance Coverage..............
Section 2.14 Maintenance of Fidelity Bond and Errors and Omissions
Insurance....................................................
Section 2.15 Inspections...................................................
Section 2.16 Restoration of Mortgaged Property.............................
Section 2.17 Title, Management and Disposition of REO Property.............
Section 2.18 Permitted Withdrawals with Respect to REO Property............
Section 2.19 Real Estate Owned Reports.....................................
Section 2.20 Liquidation Reports...........................................
Section 2.21 Reports of Foreclosures and Abandonments of Mortgaged
Property.....................................................
Section 2.22 Notification of Adjustments...................................
Section 2.23 Fair Credit Reporting.........................................
Section 2.24 Compliance With REMIC Provisions..............................
ARTICLE III
PAYMENTS TO OWNER
Section 3.01 Remittances...................................................
Section 3.02 Statements to Owner...........................................
Section 3.03 Advances by the Servicer......................................
Section 3.04 Monthly Advances by the Servicer..............................
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property...............................
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files.......
Section 4.03 Servicing Compensation........................................
Section 4.04 Annual Statement as to Compliance.............................
Section 4.05 Annual Independent Public Accountants' Servicing Report.......
Section 4.06 Right to Examine the Servicer Records.........................
Section 4.07 Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999................
ARTICLE V
SERVICER TO COOPERATE
Section 5.01 Provision of Information......................................
Section 5.02 Financial Statements; Servicing Facilities....................
ARTICLE VI
TERMINATION
Section 6.01 Termination...................................................
Section 6.02 Transfer Procedures...........................................
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the related
Transfer Date................................................
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification; Third Party Claims...........................
Section 8.02 Limitation on Liability of the Servicer and Others............
Section 8.03 Limitation on Assignment and Resignation by the Servicer......
Section 8.04 Assignment by Owner...........................................
Section 8.05 Merger or Consolidation of the Servicer.......................
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF SERVICER
Section 9.01 Due Organization and Authority................................
Section 9.02 Ordinary Course of Business...................................
Section 9.03 No Violation..................................................
Section 9.04 Ability to Service............................................
Section 9.05 Ability to Perform............................................
Section 9.06 Litigation....................................................
Section 9.07 No Consent Required...........................................
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF OWNER
Section 10.01 Organization and Good Standing; Licensing.....................
Section 10.02 Authorization; Binding Obligations............................
Section 10.03 No Consent Required...........................................
Section 10.04 No Violations.................................................
Section 10.05 Litigation....................................................
Section 10.06 Good Title....................................................
Section 10.07 Compliance with Law...........................................
Section 10.08 Indemnification by the Owner..................................
Section 10.09 Representations and Warranties................................
ARTICLE XI
DEFAULT
Section 11.01 Events of Default.............................................
Section 11.02 Waiver of Defaults............................................
ARTICLE XII
TRANSFER
Section 12.01 Transfer Documents............................................
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Notices.......................................................
Section 13.02 Entire Agreement; Amendment...................................
Section 13.03 Execution; Binding Effect.....................................
Section 13.04 Headings......................................................
Section 13.05 Duration of Agreement.........................................
Section 13.06 Governing Law.................................................
Section 13.07 Relationship of Parties.......................................
Section 13.08 Severability of Provisions....................................
Section 13.09 Recordation of Assignments of Mortgage........................
Section 13.10 Exhibits......................................................
Section 13.11 Counterparts..................................................
Section 13.12 No Solicitation...............................................
Section 13.13 Cooperation of the Servicer with a Reconstitution.............
EXHIBITS
EXHIBIT 1 INFORMATION TO BE INCLUDED IN MONTHLY REMITTANCE ADVICE
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF OPINION OF COUNSEL TO THE SERVICER
EXHIBIT 7 FORM OF OFFICER'S CERTIFICATE
EXHIBIT 8 MORTGAGE LOAN DOCUMENTS
EXHIBIT 9 FORM OF ACKNOWLEDGMENT AGREEMENT
EXHIBIT 10 REPORTING REQUIREMENTS
EXHIBIT 11 FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 12 FORM OF POWER OF ATTORNEY
EXHIBIT 13 FORM OF ANNUAL CERTIFICATION
FLOW SERVICING RIGHTS PURCHASE AND SERVICING AGREEMENT
This Flow Servicing Rights Purchase and Servicing Agreement
("Servicing Agreement" or "Agreement") is entered into as of August 22, 2005, by
and between M&T MORTGAGE CORPORATION, a New York State Chartered Corporation
(the "Servicer") and ▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY, a New York limited
partnership (the "Owner").
WHEREAS, the Owner has purchased and will purchase in the future
certain Alt-A residential, fixed and adjustable rate first lien mortgage loans
(the "Mortgage Loans");
WHEREAS, the Servicer regularly services residential mortgage loans
and has agreed to service the Mortgage Loans that become subject to this
Agreement, and the parties desire to provide the terms and conditions of such
servicing by the Servicer; and
WHEREAS, the Owner desires, from time to time, to sell, transfer and
assign to the Servicer all of its right, title and interest in and to the
Servicing Rights (as hereinafter defined) with respect to the Mortgage Loans and
the Servicer, from time to time, desires to purchase such Servicing Rights.
NOW, THEREFORE, in consideration of the mutual premises and
agreements set forth herein and for other good and valuable consideration, the
receipt and the sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The following terms are defined as
follows:
Accepted Servicing Practices: With respect to any Mortgage Loan or
REO Property, those mortgage servicing practices including collection procedures
of mortgage banking institutions that service mortgage loans of the same type as
such Mortgage Loan and that are in accordance with servicing guidelines as set
forth in the ▇▇▇▇▇▇ ▇▇▇ Guide or ▇▇▇▇▇▇▇ Mac Guides, consistent with the manner
in which the Servicer services and administers similar mortgage loans for the
Servicer's own portfolio, and in accordance with the terms of the applicable
Mortgage, Mortgage Note and all applicable laws and regulations.
Acknowledgment Agreement: The document substantially in the form of
Exhibit 9, to be executed by the Owner and the Servicer in connection with the
sale and purchase of each Servicing Rights Package.
Adjustable Rate Mortgage Loan: A Mortgage Loan for which the
Mortgage Interest Rate is adjusted from time to time in accordance with the
terms of the related Mortgage Note..
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Amortization Fraction: With respect to each Mortgage Loan, (a) 1.00
for any repurchase made during the first year following the Sale Date, (b) 0.83
for any repurchase made during the second year following the Sale Date, (c) 0.67
for any repurchase made during the third year following the Sale Date, (d) 0.50
for any repurchase made during the fourth year following the Sale Date, (e) 0.33
for any repurchase made during the fifth year following the Sale Date, (f) 0.17
for any repurchase made during the sixth year following the Sale Date and (g)
0.00 for any repurchase made after the sixth anniversary of the Sale Date.
Ancillary Income: All income derived from the Mortgage Loans other
than payments of principal, interest, Escrow Payments, Servicing Fees and
prepayment penalties attributable to the Mortgage Loans, which Ancillary Income
shall include but not be limited to interest received on funds deposited in the
Custodial Account or any Escrow Account (to the extent permitted by applicable
law and to the extent not required to be paid the related Mortgagor), all late
charges, assumption fees, escrow account benefits, reinstatement fees, fees
received with respect to checks on bank drafts returned by the related bank for
insufficient funds, and similar types of fees arising from or in connection with
any Mortgage Loan to the extent not otherwise payable to the Mortgagor under
applicable law or pursuant to the terms of the related Mortgage Note.
Appraised Value: The value of any Mortgaged Property, as determined
by a qualified appraiser made for the originator of the Mortgage Loan at the
time of origination of such Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Owner.
BPO: A broker's price opinion.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions are closed for business
in the State of New York or the states where the parties and the master servicer
with respect to the related Pass-Through Transfer are located.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Commitment Letter: With respect to each Servicing Rights Package,
the letter agreement between the Owner and the Servicer setting forth certain
business terms pursuant to which the Owner agrees to sell the Servicing Rights
with respect to the Mortgage Loans to the Servicer and the Servicer agrees to
purchase the Servicing Rights with respect to the Mortgage Loans from the Owner
and service the Mortgage Loans in accordance with this Agreement.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 2.06.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents.
Custodian: The custodian of the Mortgage Loan Documents as specified
under the related Custodial Agreement.
Data File: Shall have the meaning set forth in Section 3.02.
Data File Delivery Date: Shall have the meaning set forth in Section
3.02.
Default: A Mortgage Loan shall be considered in default where more
than one Monthly Payment is due.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month in which such
Remittance Date occurs and ending on (and including) the first day of the month
in which such Remittance Date occurs.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than one day prior to the Remittance Date in each month (or such other
date as permitted under this Agreement):
(i) direct obligations of, and obligations fully guaranteed as
to timely payment of principal and interest by, the United States of
America or any agency or instrumentality of the United States of
America the obligations of which are backed by the full faith and
credit of the United States of America ("Direct Obligations");
(ii) federal funds, demand and time deposits in, certificates
of deposits of, or bankers' acceptances issued by, any depository
institution or trust company (including U.S. subsidiaries of foreign
depositories) incorporated or organized under the laws of the United
States of America or any state thereof and subject to supervision
and examination by federal or state banking authorities, so long as
at the time of such investment or the contractual commitment
providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the
commercial paper or other short-term debt or deposit obligations of
such holding company or deposit institution, as the case may be)
have been rated by each Rating Agency in its highest short-term
rating category or one of its two highest long-term rating
categories;
(iii) repurchase agreements collateralized by Direct
Obligations or securities guaranteed by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac
with any registered broker/dealer subject to Securities Investors'
Protection Corporation jurisdiction or any commercial bank insured
by the FDIC, if such broker/dealer or bank has an uninsured,
unsecured and unguaranteed obligation rated by each Rating Agency in
its highest short-term rating category;
(iv) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States
of America or any state thereof which have a credit rating from each
Rating Agency, at the time of investment or the contractual
commitment providing for such investment, at least equal to one of
the two highest long-term credit rating categories of each Rating
Agency; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount
of securities issued by such corporation to exceed 20% of the
aggregate principal amount of all Eligible Investments in the
Custodial Accounts and the Escrow Accounts; provided, further, that
such securities will not be Eligible Investments if they are
published as being under review with negative implications from
either Rating Agency;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 180 days after the date
of issuance thereof) rated by each Rating Agency in its highest
short-term rating category;
(vi) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of
the United States of America or its agencies or instrumentalities
(which obligations are backed by the full faith and credit of the
United States of America) held by a custodian in safekeeping on
behalf of the holders of such receipts; and
(vii) any other demand, money market, common trust fund or
time deposit or obligation, or interest-bearing or other security or
investment rated in the highest rating category by each Rating
Agency;
provided, however, that (a) any such instrument shall be acceptable
to the Rating Agencies, and (b) no such instrument shall be an Eligible
Investment if such instrument evidences either (i) a right to receive only
interest payments with respect to the obligations underlying such instrument, or
(ii) both principal and interest payments derived from obligations underlying
such instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Servicer pursuant to Section 2.14.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 2.08.
Escrow Payment: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 11.01.
▇▇▇▇▇▇ Mae: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC or ▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or
any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer
pursuant to Section 2.14.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Forbearance: Shall have the meaning set forth in Section 2.03.
Foreclosure Commencement: The delivery of the applicable file to the
Servicer's foreclosure counsel for initiation of foreclosure proceedings.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
▇▇▇▇▇▇▇ Mac Guides: The ▇▇▇▇▇▇▇ Mac Single-Family Seller/Servicer
Guide and all amendments or additions thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
Guarantor: Any guarantor, insurer or credit enhancement provider of
the securities issued in connection with a Pass-Through Transfer.
Index: With respect to each Adjustable Rate Mortgage Loan, the index
set forth in the related Mortgage Note.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Note.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the
sale of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan, to the lesser of (a) the Appraised Value and (b) if the Mortgage
Loan was made to finance the acquisition of the related Mortgaged Property, the
purchase price of the Mortgaged Property.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the state of Delaware, or any successor
thereto.
Monthly Advance: With respect to each Mortgage Loan and any
Remittance Date, advances of interest and principal required to be made on the
Business Day immediately preceding such Remittance Date to cover any shortfall
between (i) Monthly Payments for each Mortgage Loan and (ii) the amounts
actually collected on account of such Monthly Payments for each such Mortgage
Loan during the related Due Period. For the avoidance of doubt, Monthly Advances
shall include any Monthly Advances made by the Servicer that relate to Monthly
Payments due prior to the related Sale Date and that are made in connection with
the conversion of servicing by the related Underlying Seller on an
"actual/actual" basis to servicing by the Servicer on a "scheduled/scheduled"
basis.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Monthly Remittance Advice: As described in Section 3.02.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note; except that with respect to
real property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create a
first lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to as the Mortgage File in Exhibit 8 annexed hereto to the extent
received by the Servicer from the prior servicer, sub-servicer or originator,
and any additional documents required to be added to the Mortgage File pursuant
to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual mortgage loan the Servicing Rights of
which are sold in a Servicing Rights Package pursuant to this Agreement, as
identified on the Mortgage Loan Schedule, which Mortgage Loan includes without
limitation the Mortgage File, the Monthly Payments, Prepayment Charge, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents listed on Exhibit 8 attached
hereto pertaining to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans with respect
to a Servicing Rights Package setting forth, to the extent available, the
following information with respect to each Mortgage Loan: (1) the Seller's
Mortgage Loan identifying number; (2) the Mortgagor's name; (3) the street
address of the Mortgaged Property including the city, state and zip code; (4) a
code indicating whether the Mortgaged Property is owner-occupied, a second home
or investment property; (5) the number and type of residential units
constituting the Mortgaged Property (i.e. a single family residence, a 2-4
family residence, a unit in a condominium project or a unit in a planned unit
development, manufactured housing); (6) the original months to maturity or the
remaining months to maturity from the related cut-off date, in any case based on
the original amortization schedule and, if different, the maturity expressed in
the same manner but based on the actual amortization schedule; (7) the LTV at
the origination; (8) the Mortgage Interest Rate as of the related cut-off date;
(9) the date on which the Monthly Payment was due on the Mortgage Loan and, if
such date is not consistent with the Due Date currently in effect, such Due
Date; (10) the stated maturity date; (11) the amount of the Monthly Payment as
of the related cut-off date; (12) the last payment date on which a Monthly
Payment was actually applied to pay interest and the outstanding principal
balance; (13) the original principal amount of the Mortgage Loan; (14) the
principal balance of the Mortgage Loan as of the close of business on the
related cut-off date, after deduction of payments of principal due and collected
on or before the related cut-off date; (15) with respect to Adjustable Rate
Mortgage Loans, the Interest Rate Adjustment Date; (16) with respect to
Adjustable Rate Mortgage Loans, the Gross Margin; (17) with respect to
Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms of the
Mortgage Note; (18) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index; (19) with respect to Adjustable Rate Mortgage
Loans, the Periodic Rate Cap under the terms of the Mortgage Note; (20) with
respect to Adjustable Rate Mortgage Loans, the Periodic Rate Floor under the
terms of the Mortgage Note; (21) the type of Mortgage Loan (i.e., Fixed Rate,
Adjustable Rate, First Lien); (22) a code indicating the purpose of the loan
(i.e., purchase, rate and term refinance, equity take-out refinance); (23)
whether such Mortgage Loan provides for a Prepayment Charge; (24) the Mortgage
Interest Rate as of origination; (25) the credit risk score (FICO score) at
origination; (26) the date of origination; (27) the Mortgage Interest Rate
adjustment period; (28) the Mortgage Interest Rate adjustment percentage; (29)
the Mortgage Interest Rate floor; (30) the Mortgage Interest Rate calculation
method (i.e., 30/360, simple interest, other); (31) a code indicating whether
the Mortgage Loan is assumable; (32) the one year payment history; (33) the Due
Date for the first Monthly Payment; (34) the original Monthly Payment due; (35)
with respect to the related Mortgagor, the debt-to-income ratio; (36) the
Appraised Value of the Mortgaged Property; and (37) the sales price of the
Mortgaged Property if the Mortgage Loan was originated in connection with the
purchase of the Mortgaged Property. With respect to the Mortgage Loans in the
aggregate, the Mortgage Loan Schedule shall set forth the following information,
as of the related cut-off date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans.
The Mortgage Loan Schedule for each Servicing Rights Package shall
be attached as an exhibit to the related Acknowledgment Agreement.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: Any Servicing Advance or Monthly Advance
previously made or proposed to be made in respect of a Mortgage Loan which, in
the good faith judgment of the Servicer, will not or, in the case of a proposed
advance, would not, be ultimately recoverable from related Insurance Proceeds,
Liquidation Proceeds or otherwise from such Mortgage Loan (including any advance
which will not be recoverable because the Servicer is not proceeding to
liquidation as a result of environmental contamination). The determination by
the Servicer that it has made a Nonrecoverable Advance or that any proposed
advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced
by an Officer's Certificate delivered to the Owner.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or Vice President, Senior
Vice President, Administrative Vice President, Assistant Vice President and by
the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Servicer, and delivered to the Owner.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Servicer, reasonably acceptable to the Owner, provided that any Opinion
of Counsel relating to (a) qualification of the Mortgage Loans in a REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of the
Servicer, (ii) does not have any material direct or indirect financial interest
in the Servicer and (iii) is not connected with the Servicer as an officer,
employee, director or person performing similar functions.
Originator: With respect to a Mortgage Loan, the originator of the
related Mortgage Loan.
Pass-Through Transfer: The direct or indirect sale or transfer of
some or all of the Loans by the Owner to a trust or other entity to be formed as
part of a publicly offered or privately placed mortgage-backed securities
transaction.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase on an Interest
Rate Adjustment Date above the Mortgage Interest Rate previously in effect.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may decrease on an Interest
Rate Adjustment Date below the Mortgage Interest Rate previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Premium Percentage: Has the meaning assigned to such term in the
related Commitment Letter.
Prepayment Charge: With respect to any Mortgage Loan, the prepayment
premium or charge, if any, required under the terms of the related Mortgage Note
to be paid in connection with a prepayment of principal, in whole or in part, to
the extent permitted by applicable law.
Prepayment Interest Shortfall: With respect to each Mortgage Loan
and any Remittance Date, an amount (to be paid by the Servicer out of its own
funds, without reimbursement) which, when added to all amounts allocable to
interest received in connection with any Principal Prepayment on such Mortgage
Loan, equals one month's interest on the amount of such Principal Prepayment,
calculated at a rate equal to the mortgage rate specified in the related
Mortgage Note.
Prime Rate: The prime rate of United States money center commercial
banks as published in The Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan, including amounts received in connection with repurchases of
Mortgage Loans by the Servicer, in accordance with the terms of this Agreement,
which is received in advance of its scheduled Due Date which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any calendar month or months subsequent to the month of prepayment.
Principal Prepayment Period: The month preceding the month in which
the related Remittance Date occurs.
Purchase Agreement: The agreement pursuant to which the Owner
purchased the Mortgage Loans from the Seller.
Purchase Price: The price calculated in accordance with the
Commitment Letter and paid on the related Sale Date by the Servicer to the Owner
in consideration for the Owner selling the related Servicing Rights Package, as
set forth in the related Acknowledgment Agreement.
Qualified Depository: A depository the accounts of which are insured
by the FDIC.
Rating Agency: Any of Fitch, ▇▇▇▇▇'▇ or Standard & Poor's, or their
respective successors designated by the Owner.
Reconstituted Mortgage Loans: The Mortgage Loans transferred
pursuant to a Pass-Through Transfer and set forth on Exhibit I of the related
assignment, assumption and recognition agreement.
Reconstitution: Either a Whole Loan Transfer or a Pass-Through
Transfer.
Reconstitution Agreements: As defined in Section 13.13 hereof.
Reconstitution Date: As defined in Section 13.13 hereof.
Regulation AB: Regulation AB of the Securities Act of 1933, as
amended from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Advice Date: The 10th day (or if such 10th day is not a
Business Day, the immediately preceding Business Day) of any month, beginning in
the month in which the related Sale Date occurs.
Remittance Date: The 18th day (or if such 18th day is not a Business
Day, the immediately preceding Business Day) of any month, beginning in the
month in which the related Sale Date occurs.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf of the Owner through foreclosure or by deed in lieu of foreclosure, as
described in Section 2.17 hereof.
Repurchase Price: Unless agreed otherwise by the Owner and the
Servicer (including, without limitation, as set forth in the Commitment Letter),
a price equal to (i) the Stated Principal Balance of the Mortgage Loan plus (ii)
interest on such Stated Principal Balance at the Mortgage Loan Remittance Rate
from the date on which interest has last been paid and distributed to the Owner
to the last day of the month of repurchase, less amounts received or advanced in
respect of such repurchased Mortgage Loan which are being held in the Custodial
Account for distribution in the month of repurchase, to the extent such amounts
are actually paid to the Owner upon the repurchase of the Mortgage Loan, plus
with respect to any Mortgage Loan subject to a Pass-Through Transfer, any costs
and damages incurred by a related trust in connection with any violation by or
associated with such Mortgage Loan of any predatory or abusive lending law.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Sale Date: With respect to each Servicing Rights Package, the date
on which the Servicer purchases the related Servicing Rights as set forth in the
related Acknowledgment Agreement.
Securities Act: The federal Securities Act of 1933, as amended.
Securities Exchange Act: The federal Securities Exchange Act of
1934, as amended.
Seller: With respect to each Servicing Rights Package, the Seller
set forth in the related Purchase Agreement.
Servicer: M&T Mortgage Corporation or any entity which services the
Mortgage Loans pursuant to this Agreement or its successor in interest or any
successor or assign to or designee of Servicer under this Agreement as herein
provided. Unless the context requires otherwise, all references to "Servicer" in
this Agreement shall be deemed to include such Servicer's successors in
interest, assignees or designees.
Servicer Acknowledgement: The acknowledgement executed by the
related Underlying Seller pursuant to which such Underlying Seller recognizes
M&T Mortgage Corporation as the "Successor Servicer" under the Underlying
Agreements, a copy of which shall be attached as an exhibit to the related
Commitment Letter.
Servicer Employees: As defined in Section 2.14 hereof.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Servicer or, to the extent
reimbursed to the prior servicer by the Servicer on the related Sale Date, prior
Servicers of its servicing obligations in respect of the Mortgage Loans,
including, but not limited to, the cost of (a) the preservation, restoration and
protection of the Mortgaged Property, (b) any fees relating to any enforcement
or judicial proceedings, excluding foreclosures, (c) foreclosure actions per
FHLMC attorney fees and costs guidelines, (d) the management and liquidation of
the Mortgaged Property if the Mortgaged Property is acquired in satisfaction of
the Mortgage, (e) taxes, assessments, water rates, sewer rents and other charges
which are or may become a lien upon the Mortgaged Property and (f) compliance
with the obligations pursuant to the provisions of this Agreement.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
fee the Owner shall pay to the Servicer, as set forth in the related Commitment
Letter.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals, if provided, or copies of all
documents in the Mortgage File which are not delivered to the Owner, its
designee or the Custodian and copies of the Mortgage Loan Documents.
Servicing Repurchase Price: With respect to each Mortgage Loan, an
amount equal to the product of (x) the Amortization Fraction and (y) the product
of (i) the Premium Percentage and (ii) the Stated Principal Balance of such
Mortgage Loan at the date of repurchase.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Servicer for servicing the Mortgage Loans; (c) any Ancillary Income with
respect to the Mortgage Loans; (d) all agreements or documents creating,
defining or evidencing any such servicing rights to the extent they relate to
such servicing rights and all rights of the Servicer thereunder; (e) any and all
rights to and in the Escrow Payments or other similar payments with respect to
the Mortgage Loans and any amounts actually collected by the Servicer with
respect thereto (but subject to the applicable Mortgage's rights under
applicable law); (f) all accounts and other rights to payment related to any of
the property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Servicing Rights Package: The Servicing Rights relating to the
Mortgage Loans described on the Mortgage Loan Schedule annexed to the related
Acknowledgment Agreement, to be sold to the Servicer by Owner on the related
Sale Date.
Servicing Transfer Date: With respect to a Servicing Rights Package,
the date on which the physical servicing of the Mortgage Loans in a Servicing
Rights Package is transferred to the Servicer pursuant to this Agreement, or
such other date as the Owner and the Servicer may mutually agree upon.
Special Deposit Account: An account which the Owner and Servicer
agree shall be a special deposit account for the benefit of the Owner under
applicable law.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and any successor thereto.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan as of the date of determination after
giving effect to payments of principal due on or before such date, whether or
not received, minus (ii) all amounts previously distributed to the Owner with
respect to the related Mortgage Loan representing payments or recoveries of
principal or advances in lieu thereof.
Termination Fee: With respect to each Mortgage Loan, a fee equal to
the greater of (i) the product of the Premium Percentage multiplied by the
Stated Principal Balance of such Mortgage Loan and (ii) the fair market value of
the related Servicing Rights, in each case as of the date of termination.
Transfer Date: As defined in Section 6.02 hereof.
Transfer Documents: As defined in Section 12.01 hereof.
Transfer Instructions: The customary transfer instructions regularly
used by the Servicer provided in connection with any given transfer of
additional Mortgage Loans for servicing under this Agreement.
Underlying Agreements: Has the meaning assigned to such term in
the related Commitment Letter and Acknowledgement Agreement.
Underlying Seller: Has the meaning assigned to such term in the
related Commitment Letter and Acknowledgement Agreement.
Whole Loan Transfer: The sale or transfer by Owner of some or all of
the Mortgage Loans in a whole loan or participation format.
ARTICLE II
SERVICING
Section 2.01 Sale of Servicing Rights.
Upon the terms and subject to the conditions of this Agreement
effective as of each Sale Date, Owner, simultaneously with the execution and
delivery of the related Acknowledgment Agreement, hereby sells, assigns,
transfers, conveys and delivers to Servicer all of Owner's right, title and
interest in and to, and all economic benefit derived from, the Servicing Rights
related to Mortgage Loans in the related Servicing Rights Package and Servicer
hereby purchases and assumes such Servicing Rights from Owner.
Section 2.02 Purchase Price.
The Purchase Price for the Servicing Rights in each Servicing Rights
Package shall be set forth in the related Acknowledgment Agreement. It is
understood and agreed that the Purchase Price shall be paid by the Servicer to
the Owner in consideration for the Owner selling the Servicing Rights in
accordance with this Agreement.
The Servicer shall pay an amount equal to 90% of the Purchase Price
to the Owner on the related Sale Date by wire transfer of immediately available
funds to an account designated by the Owner in writing. The Servicer shall pay
the remainder of the Purchase Price to the Owner within 5 Business Days of the
related Sale Date as set forth in the immediately preceding sentence.
If, subsequent to the payment of the Purchase Price or the payment
of any other amounts due under this Agreement to either party, the principal on
which the Purchase Price with respect to a Mortgage Loan was based is found to
be in error, or if, for any other reason, the Purchase Price or such other
amounts are found to be in error, within five (5) Business Days after the
receipt of information sufficient to provide notice that payment is due, the
party benefiting from the error shall pay to the other party an amount
sufficient to correct and reconcile the Purchase Price or such other amounts and
shall provide the other party with a reconciliation statement and such other
documentation sufficient to reasonably satisfy the other party concerning the
accuracy of such reconciliation.
In connection with the repurchase of a Mortgage Loan by a Seller
from the Owner due to a breach of a representation or warranty or other defect,
the Servicer shall be entitled to receive from the Owner the Servicing
Repurchase Price. This amount shall be paid by the Owner to the Servicer within
thirty (30) Business Days of any such repurchase by wire transfer of immediately
available funds to an account designated by the Servicer.
Concurrently with any repurchase and payment described in the
paragraph above, the Servicer shall transfer, assign, set over and convey to the
Owner all of its right, title and interest in and to the related Servicing
Rights with respect to such repurchased Mortgage Loan. In addition, this
Agreement shall terminate with respect to such Mortgage Loan, except as
otherwise provided herein.
Section 2.03 The Servicer to Act as the Servicer.
From and after the related Sale Date, the Servicer as an independent
contractor, shall service and administer each Mortgage Loan in the related
Servicing Rights Package and shall have full power and authority, acting alone,
to do any and all things in connection with such servicing and administration
which the Servicer may deem necessary or desirable, consistent with the terms of
this Agreement and with Accepted Servicing Practices.
In servicing and administering the Mortgage Loans, the Servicer
shall employ Accepted Servicing Practices except and to the extent that such
practices conflict with the requirements of this Agreement. The Servicer shall
retain adequate personnel to effect such servicing and administration of the
Mortgage Loans.
In the event that any Mortgage Loan is in Default or, in the
judgment of the Servicer, such a Default is reasonably foreseeable, the
Servicer, consistent with Accepted Servicing Practices, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, or forgive the payment of principal or interest,),
accept payment from the related Mortgagor of an amount less than the Stated
Principal Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, payment
plans, variances, forgiveness of principal or interest, postponements, or
indulgences collectively referred to herein as "Forbearance") provided, however,
that prior to any related Reconstitution, the terms of any Mortgage Loan may
only be waived, modified or varied with the consent of the Purchaser. The
Servicer shall not, except as provided in the following paragraph, waive any
Prepayment Charge. The Servicer's analysis supporting any Forbearance and the
conclusion that any Forbearance meets the standards of this section shall be
reflected as appropriate in the Servicer's records. The Servicer shall maintain
any documents documenting any such modification in the Mortgage File.
In addition, notwithstanding the foregoing, the Servicer may in the
Servicer's sole but reasonable discretion waive, in whole or in part, a
Prepayment Charge if such Prepayment Charge is (i) not permitted to be collected
by applicable law, (ii) the enforceability thereof is limited (1) by bankruptcy,
insolvency, moratorium, receivership or other similar laws relating to
creditor's rights or (2) due to acceleration in connection with a foreclosure or
other involuntary payment or (iii) with the consent of the Owner. If a
Prepayment Charge is waived other than as permitted above, then the Servicer is
required to deposit the amount of such waived Prepayment Charge into the
Custodial Account together with and at the time that the amount prepaid on the
related Mortgage Loan is required to be deposited into the Custodial Account;
provided, however, that the Servicer shall not have an obligation to pay the
amount of any uncollected Prepayment Charge if the failure to collect such
amount is the direct result of inaccurate or incomplete information on the
Mortgage Loan Schedule in effect at such time.
Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered, to execute and deliver on
behalf of itself and the Owner, all instruments of satisfaction or cancellation,
or of partial or full release, discharge and all other comparable instruments,
with respect to the Mortgage Loans and with respect to the Mortgaged Properties.
If reasonably required by the Servicer, the Owner shall furnish the Servicer
with any powers of attorney and other documents necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties under
this Agreement.
The Servicer's computer system shall clearly reflect the ownership
of each Mortgage Loan. The Servicer shall release from its custody the contents
of any Servicing File retained by it only in accordance with this Agreement or
at the written direction of the Owner.
With respect to the performance of any service required to be
provided for the Servicer hereunder, including, without limitation, the
obtainment of credit report data, the provision of field or other inspections,
the provision of title-related services, and the sale or management of REO
properties, the Servicer may obtain such services from an Affiliate if such
services are provided on a commercially reasonable basis with respect to the
price and quality of such services. Notwithstanding anything herein to the
contrary, in the event that the Servicer retains any third party service
provider in fulfilling its obligations hereunder, the Servicer shall
nevertheless remain primarily liable to the Owner for such obligations.
Section 2.04 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 2.03 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Servicer shall take such action (1) as is
consistent with Accepted Servicing Practices, (2) as the Servicer shall
determine prudently to be in the best interest of the Owner and (3) if
applicable, is consistent with any related PMI Policy. In the event that any
payment due under any Mortgage Loan is not postponed pursuant to Section 2.03
and remains delinquent for a period of 90 days or any other default continues
for a period of 90 days beyond the expiration of any grace or cure period (or
such other period as is required by law in the jurisdiction where the related
Mortgaged Property is located) or earlier as determined by the Servicer, the
Servicer shall commence foreclosure proceedings in accordance with Accepted
Servicing Practices. In such connection, the Servicer shall from its own funds
make all necessary and proper Servicing Advances through final disposition but
only to the extent that the Servicer shall determine, in its good faith
judgment, that the amount of a proposed Servicing Advance is recoverable. The
determination by the Servicer that an advance, if made, would be unrecoverable,
shall be evidenced by an Officer's Certificate of the Servicer, delivered to the
Owner, which details the reasons for such determination. The Servicer shall be
reimbursed for all Servicing Advances in accordance with this Agreement.
The Servicer acknowledges and agrees that it shall take and initiate
any legal actions with respect to any Mortgage Loans and REO Properties,
including, without limitation, any foreclosure actions, acceptance of
deeds-in-lieu of foreclosure, and any collection actions with respect to any
Mortgage Loans or REO Properties on behalf of the Owner, but only in the name of
the Servicer and without reference to the Owner. Except as otherwise required by
law or with the consent of the Owner, under no circumstances shall any such
action be taken in the name of, or with any reference to, the Owner. The
Servicer shall provide prior written notice to the Owner if the Servicer is
required by applicable law to take any legal actions with respect to the
Mortgage Loan or REO Properties in the name of, or with reference to, the Owner.
Owner agrees to provide all the documentation, appropriately recorded, if
applicable, necessary for the Servicer to initiate legal actions in its own
name.
Notwithstanding anything to the contrary contained herein, (a) all
actions must be approved by the Owner relating to any Mortgaged Property that is
determined to be contaminated by hazardous or toxic substances or wastes and
(b), in connection with a foreclosure, in the event the Servicer has reasonable
cause to believe that a Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, or if the Owner otherwise requests an environmental
inspection or review of such Mortgaged Property to be conducted by a qualified
inspector, the Servicer shall cause the Mortgaged Property to be so inspected at
the Owner's expense. Upon completion of the inspection, the Servicer shall
promptly provide the Owner with a written report of the environmental
inspection.
Notwithstanding anything to the contrary contained herein, after
reviewing the environmental inspection report, the Owner shall determine how the
Servicer shall proceed with respect to the Mortgaged Property; provided, that
the Servicer may determine in its sole discretion that it will not proceed with
a foreclosure or acceptance of a deed in lieu of foreclosure with respect to a
Mortgaged Property that has been determined to be contaminated by hazardous or
toxic substances or wastes and with respect to which the Servicer would be
expected to take title in its own name. In the event (a) the environmental
inspection report indicates that the Mortgaged Property is contaminated by
hazardous or toxic substances or wastes and (b) the Owner directs the Servicer
to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the
Servicer shall be reimbursed for all reasonable costs associated with such
foreclosure or acceptance of a deed in lieu of foreclosure and any related
environmental clean up costs, as applicable, from the related Liquidation
Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the
Servicer, the Servicer shall be entitled to be reimbursed from amounts in the
Custodial Account pursuant to Section 2.07 hereof. In the event the Owner
directs the Servicer not to proceed with foreclosure or acceptance of a deed in
lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances
made with respect to the related Mortgaged Property from the Custodial Account
pursuant to Section 2.07 hereof.
Section 2.05 Collection of Mortgage Loan Payments.
Following the related Sale Date, the Servicer shall proceed
diligently to collect all payments due under each of the related Mortgage Loans
when the same shall become due and payable and shall take reasonable care in
ascertaining and estimating Escrow Payments, to the extent applicable, and all
other charges that will become due and payable with respect to the Mortgage
Loans and each related Mortgaged Property, to the extent that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
Section 2.06 Establishment of and Deposits to Custodial Account.
The Servicer shall segregate and hold all funds collected and
received in respect of any Mortgage Loans separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts, titled "M&T Mortgage
Corporation, in trust for ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company re: Fixed and
Adjustable Rate Residential Mortgage Loans". The Custodial Account shall be
established with a Qualified Depository acceptable to the Owner as a Special
Deposit Account. Any funds deposited in the Custodial Account shall at all times
be fully insured to the full extent permitted under applicable law and any
amounts therein may be invested in Eligible Investments. The creation of any
Custodial Account shall be evidenced by a certification in the form of Exhibit 2
hereto, in the case of an account established with the Servicer, or by a letter
agreement in the form of Exhibit 3 hereto, in the case of an account held by a
depository other than the Servicer. A copy of such certification or letter
agreement shall be furnished to the Owner and, upon request, to any subsequent
Owner.
The Servicer shall deposit in the Custodial Account no more than one
(1) Business Day following receipt thereof, and retain therein, the following
collections received by the Servicer and payments made by the Servicer after the
related Sale Date, other than payments of principal and interest due on or
before the related Sale Date, or received by the Servicer prior to the related
Sale Date but allocable to a period subsequent thereto:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage;
(iii) all Liquidation Proceeds and any amount received with respect
to REO Property;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 2.12 (other than proceeds to be held in a
suspense account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with Section 2.16);
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 2.16;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 2.11, 2.14, 2.17, 3.01, 3.04 or 4.02;
(vii) any prepayment penalties received with respect to any Mortgage
Loan;
(viii) the amount of any Prepayment Interest Shortfall with respect
to any Mortgage Loans;
(ix) any amounts required to be deposited by the Servicer pursuant
to Section 3.04; and
(x) any amounts required to be deposited by the Servicer pursuant to
Section 2.13 in connection with the deductible clause in any blanket
hazard insurance policy.
The foregoing requirements for deposit into the Custodial Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, unless otherwise provided herein, payments in the
nature of the Servicing Fee and Ancillary Income need not be deposited by the
Servicer into the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution or any other non-interest
benefits shall accrue to the benefit of the Servicer and the Servicer shall be
entitled to retain and withdraw such interest from the Custodial Account
pursuant to Section 2.07 or retain such other benefits, as the case may be.
Section 2.07 Permitted Withdrawals From Custodial Account.
Subject to Section 3.01, the Servicer shall be entitled to withdraw
funds from the Custodial Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the manner
provided Section 3.01;
(ii) to pay to itself the Servicing Fee (to the extent the Servicer
has not retained the Servicing Fee);
(iii) to reimburse itself for unreimbursed Servicing Advances and
unreimbursed Monthly Advances (except to the extent reimbursed pursuant to
Section 2.09), any accrued but unpaid Servicing Fees and for unreimbursed
advances of the Servicer funds made pursuant to Section 2.17, the
Servicer's right to reimburse itself pursuant to this subclause (iii) with
respect to any Mortgage Loan being limited to related Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds and such other amounts
as may be collected by the Servicer from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of
any such reimbursement, the Servicer's right thereto shall be prior to the
rights of the Owner;
(iv) following the liquidation of a Mortgage Loan, to reimburse
itself from amounts unrelated to the Mortgage Loan for any unpaid
Servicing Fees to the extent not recoverable from Liquidation Proceeds,
Insurance Proceeds or other amounts received with respect to the related
Mortgage Loan;
(v) to reimburse itself for any unreimbursed Nonrecoverable Advances
made by the Servicer in accordance with this Agreement;
(vi) to invest funds in Eligible Investments in accordance with
Section 2.11
(vii) to withdraw funds deposited in error;
(viii) to pay itself any interest earned on funds deposited in the
Custodial Account (all such interest to be withdrawn monthly not later
than each Remittance Date);
(ix) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(x) to reimburse the Owner from its own funds without reimbursement
for any losses on amounts on deposit in the Custodial Account which were
invested in Eligible Investments.
Section 2.08 Establishment of and Deposits to Escrow Account.
The Servicer shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan constituting Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts, titled, "M&T Mortgage Corporation, in trust for Owners of Residential
Fixed and Adjustable Rate Mortgage Loans, and various Mortgagors". The Escrow
Account shall be established with a Qualified Depository as a Special Deposit
Account, in a manner which shall provide maximum available insurance thereunder.
Funds deposited in the Escrow Accounts may be drawn on by the Servicer in
accordance with Section 2.09. The creation of any Escrow Account shall be
evidenced by a certification in the form of Exhibit 4 hereto, in the case of an
account established with the Servicer, or by a letter agreement in the form of
Exhibit 5 hereto, in the case of an account held by a depository other than the
Servicer. A copy of such certification shall be furnished to the Owner and, upon
request, to any subsequent Owner.
The Servicer shall deposit in the Escrow Account or Accounts on a
daily basis, and retain therein all Escrow Payments collected on account of the
Mortgage Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement.
The Servicer shall deposit in a suspense account on a daily basis,
and retain therein all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any Mortgaged
Property. The suspense account shall be established with a Qualified Depository
as a Special Deposit Account, in a manner which shall provide maximum available
insurance thereunder.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 2.09. The Servicer shall be entitled to retain any interest paid on
funds deposited in the Escrow Account or a suspense account by the depository
institution, other than interest on escrowed funds required by law to be paid to
the Mortgagor. To the extent required by law, the Servicer shall pay from its
own funds interest on escrowed funds to the Mortgagor notwithstanding that the
Escrow Account may be non-interest bearing or that interest paid thereon is
insufficient for such purposes.
Section 2.09 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments for
the related Mortgage;
(ii) to reimburse the Servicer for any Servicing Advance made by the
Servicer pursuant to Section 2.12 with respect to a related Mortgage Loan,
but only from amounts received on the related Mortgage Loan which
represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan or
applicable federal or state law or judicial or administrative ruling;
(iv) for transfer to the Custodial Account and application to reduce
the principal balance of the Mortgage Loan in accordance with the terms of
the related Mortgage and Mortgage Note;
(v) to pay to the Servicer, or any Mortgagor to the extent required
by law, any interest paid on the funds deposited in the Escrow Account;
and
(vi) to clear and terminate the Escrow Account on the termination of
this Agreement.
Section 2.10 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan that provides for Escrow
Payments, the Servicer shall maintain accurate records reflecting the status of
ground rents, taxes, assessments, water rates, sewer rents, and other charges
which are or may become a lien upon the Mortgaged Property and the status of PMI
Policy and LPMI Policy premiums, if applicable, fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Servicer in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage.
To the extent that any Mortgage Loan does not provide for Escrow
Payments, the Servicer shall determine that any such payments are made by the
Mortgagor. With respect to each Mortgage Loan, subject to Accepted Servicing
Practices, the Servicer assumes full responsibility for the timely payment of
all such bills and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make Servicing Advances from its own funds to effect
such payments within the time period required to avoid the loss of the related
Mortgaged Property by foreclosure from a tax or other lien; provided that the
Servicer shall use its best efforts to make such Servicing Advances within 60
days of knowledge that such payments are delinquent and, in any event within 90
days of such notice. Notwithstanding the foregoing, if the Servicer determines
that such Servicing Advance would be a Nonrecoverable Advance, the Servicer
shall have no obligation to make such Servicing Advance. If the Servicer fails
to make a Servicing Advance with respect to any payment prior to the date on
which any late payment penalties or costs related to protecting the lien accrue,
except in the case of a Nonrecoverable Advance, the Servicer shall make
Servicing Advances on behalf of the Mortgagor to pay any such penalties or costs
which accrued after the date which was thirty (30) Business Days after the date
on which the Servicer had knowledge that such payment had not been made by the
Mortgagor; provided that, in any event, Servicer shall pay such penalties or
costs within the time period required to avoid the loss of the related Mortgaged
Property by foreclosure from a lien related to a tax payment delinquency.
Section 2.11 Protection of Accounts.
The Servicer may transfer the Custodial Account or the Escrow
Account to a different Qualified Depository from time to time. Such transfer
shall be made only upon obtaining the consent of the Owner, which consent shall
not be withheld unreasonably.
The Servicer shall bear any expenses, losses or damages sustained by
the Owner because the Custodial Account and/or Escrow Account are not demand
deposit accounts.
Amounts on deposit in the Custodial Account may at the option of the
Servicer be invested in Eligible Investments. Any such Eligible Investment shall
mature no later than one day prior to the Remittance Date in each month;
provided, however, that if such Eligible Investment is an obligation of a
Qualified Depository (other than the Servicer) that maintains the Custodial
Account, then such Eligible Investment may mature on the related Remittance
Date. Any such Eligible Investment shall be made in the name of the Servicer in
trust for the benefit of the Owner. All income on or gain realized from any such
Eligible Investment shall be for the benefit of the Servicer and may be
withdrawn at any time by the Servicer. Any losses incurred in respect of any
such investment shall be deposited in the Custodial Account, by the Servicer out
of its own funds immediately as realized. If, at any time, the amount on deposit
in the Custodial Account exceeds the amount of the applicable FDIC insurance,
such excess above the amount of the applicable FDIC insurance shall be invested
in Eligible Investments.
All suspense and clearing accounts in which funds relating to the
Mortgage Loans are deposited shall be established with a Qualified Depository,
in a manner which shall provide maximum available insurance thereunder.
Section 2.12 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan,
hazard insurance such that all buildings upon the Mortgaged Property are insured
by a generally acceptable insurer acceptable under the ▇▇▇▇▇▇ ▇▇▇ Guides and
▇▇▇▇▇▇▇ Mac Guides against loss by fire, hazards of extended coverage and such
other hazards as are required to be insured pursuant to the ▇▇▇▇▇▇ ▇▇▇ Guides
and ▇▇▇▇▇▇▇ Mac Guides, in an amount which is at least equal to the lesser of
(i) the maximum insurable value of the improvements securing such Mortgage Loan
or (ii) the outstanding principal balance of the Mortgage Loan provided that
such amount represents at least 80% of the insurable value of the Mortgaged
Property.
If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is, and shall continue to be, covered by a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration in effect with a generally acceptable insurance carrier
acceptable under the ▇▇▇▇▇▇ ▇▇▇ Guides and ▇▇▇▇▇▇▇ Mac Guides in an amount
representing coverage not less than the lesser of (i) the aggregate unpaid
principal balance of the Mortgage Loan and (ii) maximum amount of insurance
which is available under the National Flood Insurance Act of 1968, as amended
(regardless of whether the area in which such Mortgaged Property is located is
participating in such program. If a Mortgaged Property is located in a special
flood hazard area and is not covered by flood insurance in the amount required
by the National Flood Insurance Act of 1968, as amended, the Servicer shall
notify the related Mortgagor that the Mortgagor must obtain such flood insurance
coverage, and if said Mortgagor fails to obtain the required flood insurance
coverage within forty five (45) days after such notification, the Servicer shall
immediately force place the required flood insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the
Servicer shall verify that the hazard and flood coverages required of the
owner's association is being maintained in accordance with then current ▇▇▇▇▇▇
▇▇▇ requirements. If the Servicer receives a cancellation notice of property
damage on an uninsured individual unit, the Servicer shall immediately respond.
The Servicer shall cause to be maintained on each Mortgaged Property
such other or additional insurance as may be required pursuant to such
applicable laws and regulations as shall at any time be in force and shall
require such additional insurance, or pursuant to the requirements of any
private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices.
In the event that the Owner or the Servicer shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Servicer shall communicate and consult with
the Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the desirability of protection of the Mortgaged Property.
All policies required hereunder shall name the Servicer and its
successors and assigns as a mortgagee and loss payee and shall be endorsed with
non contributory standard or New York mortgagee clauses which shall provide for
at least 30 days prior written notice of any cancellation, reduction in amount
or material change in coverage.
The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies are acceptable under the ▇▇▇▇▇▇ Mae Guides and
▇▇▇▇▇▇▇ Mac Guides and are licensed to do business in the jurisdiction in which
the Mortgaged Property is located. The Servicer shall determine that such
policies provide sufficient risk coverage and amounts as required pursuant to
the ▇▇▇▇▇▇ Mae Guides and ▇▇▇▇▇▇▇ Mac Guides, that they insure the property
owner, and that they properly describe the property address. The Servicer shall
furnish to the Mortgagor a formal notice of expiration of any such insurance in
conformance with the Servicer's standard practices; provided, however, that in
the event that no such notice is furnished by the Servicer, the Servicer shall
ensure that replacement insurance policies (whether forced placed or other
insurance policies) are in place in the required coverages and the Servicer
shall be solely liable for any losses in the event coverage is not provided.
Pursuant to Sections 2.06 and 2.08, any amounts collected by the
Servicer under any such policies (other than amounts to be deposited in a
suspense account and applied to the restoration or repair of the related
Mortgaged Property, or property acquired in liquidation of the Mortgage Loan, or
to be released to the Mortgagor, in accordance with the Servicer's normal
servicing procedures as specified in Section 2.16) shall be deposited in the
Custodial Account subject to withdrawal pursuant to Section 2.07.
Section 2.13 Maintenance of Blanket Hazard Insurance Coverage.
In the event that the Servicer shall obtain and maintain a blanket
policy insuring against losses arising from fire and hazards covered under
extended coverage on all of the Mortgage Loans, then, to the extent such policy
provides coverage in an amount equal to the amount required pursuant to Section
2.12 and otherwise complies with all other requirements of Section 2.12, it
shall conclusively be deemed to have satisfied its obligations as set forth in
Section 2.12. Any amounts collected by the Servicer under any such policy
relating to a Mortgage Loan shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 2.07. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 2.12, and there
shall have been a loss which would have been covered by such policy, the
Servicer shall deposit in the Custodial Account at the time of such loss the
amount not otherwise payable under the blanket policy because of such deductible
clause, such amount to be deposited from the Servicer's funds, without
reimbursement therefor. Upon request of the Owner, the Servicer shall cause to
be delivered to the Owner a certified true copy of such policy and a statement
from the insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days' prior written notice to the Owner.
Section 2.14 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the Mortgage Loans ("the Servicer Employees"). Any such Fidelity
Bond and Errors and Omissions Insurance Policy shall be in the form of the
Mortgage Banker's Blanket Bond and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Servicer Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Servicer against
losses in connection with the release or satisfaction of a Mortgage Loan without
having obtained payment in full of the indebtedness secured thereby. No
provision of this Section 2.14 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Servicer from its
duties and obligations as set forth in this Agreement. The Servicer shall
maintain minimum coverage amounts under any such Fidelity Bond and Errors and
Omissions Insurance Policy acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac. Upon the
request of the Owner, the Servicer shall cause to be delivered to the Owner a
certified true copy of such Fidelity Bond and Errors and Omissions Insurance
Policy.
Section 2.15 Inspections.
The Servicer shall inspect the Mortgaged Property as often as is
deemed necessary by the Servicer to assure itself that the value of the
Mortgaged Property is being preserved; provided that, if any Mortgage Loan is
more than 60 days delinquent, the Servicer shall immediately inspect the
Mortgaged Property and shall conduct subsequent inspections as often as is
deemed necessary by the Servicer to assure itself that the value of the
Mortgaged Property is being preserved in accordance with Accepted Servicing
Practices; provided further that if the Servicer determines that any Mortgaged
Property is vacant, the Servicer shall immediately inspect the Mortgaged
Property and shall conduct subsequent inspections every 25 to 35 days to assure
itself that the value of the Mortgaged Property is being preserved in accordance
with Accepted Servicing Practices. The Servicer shall maintain appropriate
records of each such inspection.
Section 2.16 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Owner prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices and the terms of this
Agreement. At a minimum, with respect to claims greater than $10,000, the
Servicer shall comply with the following conditions in connection with any such
release of Insurance Proceeds or Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals with
respect thereto;
(ii) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to,
requiring waivers with respect to mechanics' and materialmen's liens;
(iii) the Servicer shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in a suspense account.
If the Owner is named as an additional loss payee, the Servicer is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Owner.
Section 2.17 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in foreclosure or
by deed in lieu of foreclosure, the deed or certificate of sale shall be taken
in the name of the Servicer on behalf of the Owner and without reference to the
Owner except as otherwise required by law or in the event the Servicer is not
authorized or permitted to hold title to real property in the state where the
REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Servicer from an attorney
duly licensed to practice law in the state where the REO Property is located.
The Servicer shall hold such title as nominee for the Owner, and any Person or
Persons holding such title other than the Owner or the Servicer shall
acknowledge in writing that such title is being held as nominee for the Owner.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Owner solely for the purpose of its prompt disposition and
sale. The Servicer, either itself or through an agent selected by the Servicer,
shall manage, conserve, protect and operate the REO Property in the same manner
that it manages, conserves, protects and operates other foreclosed property for
its own account. The Servicer shall attempt to sell the same (and may
temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Servicer deems to
be in the best interest of the Owner. The Servicer shall notify the Owner from
time to time as to the status of each REO Property.
The Servicer shall use its commercially reasonable efforts to
dispose of the REO Property as soon as possible and shall sell such REO Property
in any event within one year after title has been taken to such REO Property,
unless the Servicer determines, and gives an appropriate notice to the Owner to
such effect, that a longer period is necessary for the orderly liquidation of
such REO Property. If a period longer than one year is permitted under the
foregoing sentence and is necessary to sell any REO Property, the Servicer shall
report monthly to the Owner as to the progress being made in selling such REO
Property.
The Servicer shall also maintain on each REO Property fire and
hazard insurance with extended coverage in an amount which is at least equal to
the maximum insurable value of the improvements which are a part of such
property, liability insurance and, to the extent required and available under
the National Flood Insurance Act of 1968, as amended, flood insurance in the
amount required in Section 2.12 hereof.
The disposition of REO Property shall be carried out by the Servicer
at such price, and upon such terms and conditions, as the Servicer deems to be
in the best interests of the Owner. The proceeds of sale of the REO Property
shall be promptly deposited in the Custodial Account. As soon as practical
thereafter, the expenses of such sale shall be paid and the Servicer shall
reimburse itself for any related unreimbursed Servicing Advances and unpaid
Servicing Fees made pursuant to this Section, and on the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Owner.
With respect to each REO Property, the Servicer shall hold all funds
collected and received in connection with the operation of the REO Property in
the Custodial Account. The Servicer shall cause to be deposited on a daily basis
upon the receipt thereof in each Custodial Account all revenues received with
respect to the conservation and disposition of the related REO Property.
Section 2.18 Permitted Withdrawals with Respect to REO Property.
The Servicer shall withdraw funds on deposit in the Custodial
Account with respect to each related REO Property necessary for the proper
operation, management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Section 2.12 and the fees of any
managing agent acting on behalf of the Servicer. The Servicer shall make monthly
distributions on each Remittance Date to the Owner of the net cash flow from the
REO Property (which shall equal the revenues from such REO Property net of the
expenses described in Sections 2.17 and 2.18 and of any reserves reasonably
required from time to time to be maintained to satisfy anticipated liabilities
for such expenses).
Section 2.19 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 2.21, the
Servicer shall furnish to the Owner on or before the 5th Business Day of each
month a statement with respect to any REO Property covering the operation of
such REO Property for the previous month and the Servicer's efforts in
connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month. That statement
shall be accompanied by such other information as the Owner shall reasonably
request.
Section 2.20 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Owner pursuant to a deed in lieu of foreclosure, the
Servicer shall submit to the Owner a liquidation report with respect to such
Mortgaged Property.
Section 2.21 Reports of Foreclosures and Abandonments of Mortgaged
Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Servicer shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code.
Section 2.22 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Servicer
shall adjust the Mortgage Interest Rate on the related Interest Rate Adjustment
Date in compliance with the requirements of applicable law and the related
Mortgage and Mortgage Note. The Servicer shall execute and deliver any and all
necessary notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate and the Monthly
Payment adjustments. The Servicer shall promptly upon written request thereof,
deliver to the Owner such notifications and any additional applicable data
regarding such adjustments and the methods used to calculate and implement such
adjustments. Upon the discovery by the Servicer, or the Owner that the Servicer
has failed to adjust a Mortgage Interest Rate or a Monthly Payment pursuant to
the terms of the related Mortgage Note and Mortgage, .the Servicer shall (a)
immediately deposit in the Custodial Account from its own funds the amount of
any interest loss caused by the Owner thereby, or (b) withdraw from the
Custodial Account the amount of any interest overage previously passed through
to the Purchaser..
Section 2.23 Fair Credit Reporting.
The Servicer, with respect to each Mortgage Loan, shall fully
furnish, in accordance with the Fair Credit Reporting Act of 1970, as amended,
and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian and
Trans Union Credit Information Company (or successors to such credit
repositories), on a monthly basis.
Section 2.24 Compliance With REMIC Provisions.
If the Servicer has received written notice from the Owner that a
REMIC election has been made with respect to the arrangement under which any
Mortgage Loans and REO Property are held, the Servicer shall not take any
action, cause the REMIC to take any action or fail to take (or fail to cause to
be taken) any action that, under the REMIC provisions, if taken or not taken, as
the case may be, could (i) endanger the status of the REMIC as a REMIC, or (ii)
result in the imposition of a tax upon the REMIC (including but not limited to
the tax on "prohibited transactions" as defined in Section 860F(a)(2) of the
Code and the tax on "contributions" to a REMIC set forth in Section 860G(d) of
the Code) unless the Servicer has received an opinion of counsel satisfactory to
the Owner and any Guarantor, in its reasonable discretion (at the expense of the
party seeking to take such action) to the effect that the contemplated action
will not endanger such REMIC status or result in the imposition of any such tax.
Section 2.25 Maintenance of PMI Policy; Claims.
The Servicer will maintain in full force and effect (a) Primary
Mortgage Insurance Policies issued by a Qualified Insurer with respect to each
Mortgage Loan for which such coverage was required at the time the loan was
originated irrespective of the Mortgagor's faithful performance in the payment
of the same and (b) LPMI Policies with respect to each Mortgage Loan which has
an LPMI Policy. Such coverage will be maintained until the ratio of the current
outstanding principal balance of the related Mortgage Loan to the Appraised
Value of the related Mortgaged Property, based on the most recent appraisal of
the Mortgaged Property performed by a qualified appraiser, such appraisal to be
included in the Servicing File, is reduced to an amount as permitted in the
▇▇▇▇▇▇ Mae Guide or applicable law. The Servicer will not cancel or refuse to
renew any Primary Mortgage Insurance Policy that is required to be kept in force
under this Agreement unless a replacement Primary Mortgage Insurance Policy or
LPMI Policy for such canceled or nonrenewed policy is obtained from and
maintained with a Qualified Insurer. The Servicer shall not take any action
which would result in noncoverage under any applicable Primary Mortgage
Insurance Policy or LPMI Policy of any loss which, but for the actions of the
Servicer would have been covered thereunder. In connection with any assumption
or substitution agreement entered into or to be entered into pursuant to Section
6.01, the Servicer shall promptly notify the insurer under the related Primary
Mortgage Insurance Policy or LPMI Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such policy and shall
take all actions which may be required by such insurer as a condition to the
continuation of coverage under the Primary Mortgage Insurance Policy or LPMI
Policy. If such Primary Mortgage Insurance Policy is terminated as a result of
such assumption or substitution of liability, the Servicer shall obtain a
replacement Primary Mortgage Insurance Policy as provided above.
In connection with its activities as servicer, the Servicer agrees
to prepare and present, on behalf of itself and the Owner, claims to the insurer
under any Private Mortgage Insurance Policy or LPMI Policy in a timely fashion
in accordance with the terms of such Primary Mortgage Insurance Policy or LPMI
Policy and, in this regard, to take such action as shall be necessary to permit
recovery under any PMI Policy respecting a defaulted Mortgage Loan. Pursuant to
Section 2.04, any amounts collected by the Servicer under any PMI Policy shall
be deposited in the Custodial Account, subject to withdrawal pursuant to Section
2.06.
ARTICLE III
PAYMENTS TO OWNER
Section 3.01 Remittances.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Owner (a) all amounts deposited in the
Custodial Account as of the close of business on the preceding Business Day (net
of charges against or withdrawals from the Custodial Account pursuant to Section
2.07 with respect to such Remittance Date), plus (b) all amounts, if any, which
the Servicer is obligated to distribute pursuant to Section 3.04 with respect to
such Remittance Date, together with any Prepayment Interest Shortfalls, minus
(c) any amounts attributable to Principal Prepayments received after the
applicable Principal Prepayment Period, which amounts shall be remitted on the
following Remittance Date, and minus any amounts attributable to Monthly
Payments collected but due on a Due Date or Due Dates subsequent to the first
day of the month of the Remittance Date, which amounts shall be remitted on the
following Remittance Date, together with any Monthly Advances.
With respect to any funds remitted to the Owner after the Business
Day on which such deposit was required to be made, the Servicer shall pay to the
Owner interest on any such late payment accrued from the Remittance Date to (and
including) the date on which such remittance is actually received by the Owner
at an annual rate equal to the Prime Rate, adjusted as of the date of each
change, plus three percentage points, but in no event greater than the maximum
amount permitted by applicable law. Such interest shall be deposited in the
Custodial Account by the Servicer on the date such late payment is made and
shall cover the period commencing with the Remittance Date on which such payment
was due and ending with the Business Day on which such payment is made, both
inclusive. Such interest shall be remitted along with the distribution payable
on the next succeeding Remittance Date. The payment by the Servicer of any such
interest shall not be deemed an extension of time for payment or a waiver of any
Event of Default by the Servicer.
Section 3.02 Statements to Owner.
On or before each Remittance Advice Date, the Servicer shall provide
to the Owner (or its designee) a computer tape or electronically transmitted
data file in Excel format (or such other mutually agreeable format) setting
forth the information contained in Exhibit 1 hereto (the "Monthly Remittance
Advice").
In addition, not more than 60 days after the end of each calendar
year, the Servicer shall furnish to each Person who was an Owner at any time
during such calendar year an annual statement as to the aggregate of remittances
for the applicable portion of such year. In addition, the Servicer shall provide
the Owner with such information concerning the Mortgage Loans as is necessary
for the Owner to prepare its federal income tax return as the Owner may
reasonably request from time to time and which is reasonably available to the
Servicer.
On the Remittance Advice Date of each month (the "Data File Delivery
Date") commencing in the month after the initial Sale Date, the Servicer shall
deliver to the Owner a data file in ".csv" format incorporating the fields set
forth in the data file layout in substantial compliance with the form set forth
on Exhibit 10 hereto (the "Data File").
Section 3.03 Advances by the Servicer.
Except as otherwise provided herein, the Servicer shall be entitled
to first priority reimbursement pursuant to Section 2.07 hereof for Monthly
Advances and Servicing Advances from recoveries from the related Mortgagor or
from all Liquidation Proceeds and other payments or recoveries (including
Insurance Proceeds and Condemnation Proceeds) with respect to the related
Mortgage Loan.
Section 3.04 Monthly Advances by the Servicer.
On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution an amount equal to all Monthly Payments
(with interest adjusted to a rate equal to the excess of the mortgage rate
specified in the Mortgage Note over the rate of the Servicing Fee) which were
due on the Mortgage Loans during the applicable Due Period and which were
delinquent at the close of business on the Business Day immediately preceding
such Remittance Date. Any amounts held for future distribution and so used shall
be replaced by the Servicer by deposit in the Custodial Account on or before any
future Remittance Date if funds in the Custodial Account on such Remittance Date
shall be less than payments to the Servicer required to be made on such
Remittance Date. Following a Pass-Through Transfer, the Guarantor, in its
reasonable judgment, shall have the right to require the Servicer to remit, from
its own funds, to the Custodial Account an amount equal to all advances
previously made with respect to the Reconstituted Mortgage Loans out of funds
held in the Custodial Account and not previously repaid from collections on the
Reconstituted Mortgage Loans, and in such event, the Servicer shall thereafter
remit all advances with respect to the Reconstituted Mortgage Loans from its own
funds. In no event shall the preceding sentence be construed as limiting the
Servicer's right to (i) pass through late collections on the Mortgages related
to the Reconstituted Mortgage Loans in lieu of making advances or (ii) reimburse
itself for such advances from late collections on such Mortgages. Subject to the
provisions of Section 2.04, the Servicer's obligation to make such Monthly
Advances as to any Mortgage Loan will continue through the last Monthly Payment
due prior to the payment in full of the Mortgage Loan, or through the earlier
of: (i) the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including Insurance Proceeds and Condemnation Proceeds) with respect to the
Mortgage Loan and (ii) the Remittance Date prior to the date the Mortgage Loan
is converted to REO Property; provided, however, that such obligation shall
cease if the Servicer determines, in its sole reasonable opinion, that advances
with respect to such Mortgage Loan are Non-Recoverable Advances.
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property.
The Servicer shall be required to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Servicer shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that the Servicer shall not exercise such
rights if prohibited by law from doing so or if the exercise of such rights
would impair or threaten to impair any recovery under the related PMI Policy, if
any.
If the Servicer reasonably believes it is unable under applicable
law to enforce such "due-on-sale" clause, the Servicer, shall, to the extent
permitted by applicable law, enter into (i) an assumption and modification
agreement with the person to whom such property has been conveyed, pursuant to
which such person becomes liable under the Mortgage Note and the original
Mortgagor remains liable thereon or (ii) in the event the Servicer is unable
under applicable law to require that the original Mortgagor remain liable under
the Mortgage Note and the Servicer has the prior consent of the primary mortgage
guarantee insurer, a substitution of liability agreement with the purchaser of
the Mortgaged Property pursuant to which the original Mortgagor is released from
liability and the purchaser of the Mortgaged Property is substituted as
Mortgagor and becomes liable under the Mortgage Note. If an assumption fee is
collected by the Servicer for entering into an assumption agreement, such fee
will be retained by the Servicer as additional servicing compensation. In
connection with any such assumption, neither the Mortgage Interest Rate borne by
the related Mortgage Note, the term of the Mortgage Loan nor the outstanding
principal amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Servicer
shall inquire diligently into the creditworthiness of the proposed transferee,
and shall follow Accepted Servicing Practices including but not limited to the
Servicer conducting a review of the credit and financial capacity of the
individual receiving the property, and may approve the assumption if it believes
the recipient is capable of assuming the mortgage obligations. If the credit of
the proposed transferee does not satisfy the relevant underwriting criteria and
the transfer of ownership actually occurs, the Servicer diligently shall, to the
extent permitted by the Mortgage or the Mortgage Note and by applicable law,
accelerate the maturity of the Mortgage Loan.
Section 4.02 Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer shall notify the Owner in the Monthly
Remittance Advice as provided in Section 3.02, and may request the release of
any Mortgage Loan Documents from the Owner or its designee in accordance with
this Section 4.02 hereof. The Servicer shall obtain discharge of the related
Mortgage Loan as of record within any related time limit required by applicable
law; provided that the Owner has provided, or caused to be provided, all
necessary documents requested by the Servicer.
If the Servicer satisfies or releases a Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage (or
such lesser amount in connection with a discounted payoff accepted by the
Servicer with respect to a defaulted Mortgage Loan) or should the Servicer
otherwise prejudice any rights the Owner may have under the mortgage
instruments, upon written demand of the Owner, the Servicer shall purchase the
related Mortgage Loan at the Repurchase Price by deposit thereof in the
Custodial Account within 5 Business Days of receipt of such demand by the Owner
or such longer period if the Servicer is able to reasonably demonstrate that it
will be able to cause the amount of the unpaid indebtedness to be reinstated and
secured under the related Mortgage. The Servicer shall maintain the Fidelity
Bond and Errors and Omissions Insurance Policy as provided for in Section 2.14
insuring the Servicer against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.
Section 4.03 Servicing Compensation.
As consideration for servicing the Mortgage Loans following the
related Sale Date, the Servicer shall be entitled to retain the applicable
Servicing Fee from payments on the Mortgage Loans or to withdraw the applicable
Servicing Fee with respect to each Mortgage Loan from the Custodial Account
pursuant to Section 2.07 hereof.
Additional servicing compensation in the form of Ancillary Income
shall be retained by the Servicer to the extent not required to be deposited in
the Custodial Account. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement thereof except as specifically provided for
herein.
Section 4.04 Annual Statement as to Compliance.
So long as any Mortgage Loans are being serviced hereunder, or were
serviced hereunder during the prior calendar year, the Servicer shall deliver to
the Owner, on or before March 15th of each year, and on the related Transfer
Date, an Officer's Certificate, stating that (i) a review of the activities of
the Servicer during the preceding calendar year and of performance under this
Agreement has been made under such officer's supervision, and (ii) the Servicer
has complied fully with the provisions of Article II and Article IV, and (iii)
to the best of such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof and
the action being taken by the Servicer to cure such default.
Section 4.05 Annual Independent Public Accountants' Servicing
Report.
So long as any Mortgage Loans are being serviced hereunder, or were
serviced hereunder during the prior calendar year, on or before March 15th of
each year, the Servicer, at its expense, shall cause a firm of independent
public accountants which is a member of the American Institute of Certified
Public Accountants to furnish a statement to each Owner to the effect that such
firm has examined certain documents and records relating to the servicing of the
Mortgage Loans and this Agreement and that such firm is of the opinion that the
provisions of Article II and Article III have been complied with, and that, on
the basis of such examination conducted substantially in compliance with the
Single Audit Program for Mortgage Bankers, nothing has come to their attention
which would indicate that such servicing has not been conducted in compliance
therewith, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement.
Section 4.06 Right to Examine the Servicer Records.
The Owner, or its designee, and, following any Pass-Through
Transfer, the Guarantor, or its designee, shall have the right to examine and
audit any and all of the books, records, or other information of the Servicer,
whether held by the Servicer or by another on its behalf, with respect to or
concerning this Agreement or, in the case of the Owner, the Mortgage Loans, and,
in the case of the Guarantor, the Reconstituted Mortgage Loans, during business
hours or at such other times as may be reasonable under applicable
circumstances, upon reasonable advance notice; provided, however, in the event
the Owner or the Guarantor, as applicable, have a reasonable good faith belief
that the books and records of the Servicer concerning this Agreement or, in the
case of the Owner, the Mortgage Loans and, in the case of the Guarantor, the
Reconstituted Mortgage Loans, are not being maintained in accordance with
generally accepted accounting procedures or Accepted Servicing Practices, the
Owner and the Guarantor may request additional opportunities to examine the
Servicer's books and records. Each of the Owner and the Guarantor shall pay its
own travel expenses associated with such examination with respect to the
Mortgage Loans.
Section 4.07 Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999.
With respect to each Mortgage Loan and the related Mortgagor, the
Servicer shall as required comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of
1999 and all applicable regulations promulgated thereunder, and shall provide
all notices required of the Servicer thereunder.
ARTICLE V
SERVICER TO COOPERATE
Section 5.01 Provision of Information.
During the term of this Agreement, the Servicer shall furnish to the
Owner all reports required hereunder, including those set forth on Exhibit 10
hereto, and such other periodic, special, or other reports or information,
whether or not provided for herein, as shall be reasonably requested by the
Owner or the purposes of this Agreement to the extent such reports or
information are readily accessible to the Servicer without undue expense. All
such reports or information shall be provided by and in accordance with all
reasonable instructions and directions which the Owner may give.
The Servicer shall execute and deliver all such instruments and take
all such action as the Owner may reasonably request from time to time, in order
to effectuate the purposes and to carry out the terms of this Agreement.
Section 5.02 Financial Statements; Servicing Facilities.
In connection with marketing the Mortgage Loans or a proposed
Reconstitution, the Owner may make available to a prospective purchaser audited
financial statements of the consolidated group that includes the Servicer for
the most recently completed three fiscal years for which such statements are
available, as well as a Consolidated Statement of Condition at the end of the
last two fiscal years covered by any Consolidated Statement of Operations;
provided that this requirement shall not apply for any year in which the
Servicer's financial statements are consolidated into those of a corporation
subject to the periodic reporting requirements of the Securities Act of 1934.
The Servicer also shall make available any comparable interim statements to the
extent any such statements have been prepared by or on behalf of the corporate
group that includes the Servicer (and are available upon request to members or
stockholders of the corporate group that includes the Servicer or to the public
at large). The Servicer shall furnish promptly to the Owner or a prospective
purchaser copies of the statements specified above.
The Servicer shall make available to the Owner or any prospective
Owner a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Servicer or the
financial statements of the corporate group that includes the Servicer, and to
permit any prospective purchaser to inspect the Servicer's servicing facilities
for the purpose of satisfying such prospective purchaser that the Servicer has
the ability to service the Mortgage Loans as provided in this Agreement.
ARTICLE VI
TERMINATION
Section 6.01 Termination.
(a) This Agreement shall terminate upon any of: (i) the later of the
final payment or other liquidation (or any advance with respect thereto) of the
last Mortgage Loan or the disposition of any REO Property with respect to the
last Mortgage Loan and the remittance of all funds due hereunder; or (ii) mutual
consent of the Servicer, the Owner and the Guarantor (with respect to the
Reconstituted Mortgage Loans only) in writing; or (iii) with respect to each
pool of Mortgage Loans, as set forth in the related Commitment Letter or (iv)
termination pursuant to the terms of this Section 6.01 or Section 11.01.
(b) The Owner may terminate, at its sole option, the Agreement with
respect to some or all of the Mortgage Loans or REO Property, without cause. The
Owner shall use its best efforts to provide written notice of such termination
to the Servicer by registered mail at least 30 days prior to the effective date
of termination; provided that in no event shall the Owner provide such notice
less than 20 days prior to the effective date of such termination. In the event
the Owner terminates the Servicer without cause with respect to some or all of
the Mortgage Loans, the Owner shall be required to pay to the Servicer the
applicable Termination Fee, all related costs and expenses of transfer
(including, but not limited to, costs and expenses associated with (i)
preparing, delivering and/or recording assignments, to the extent not previously
reimbursed to the Servicer by the Owner, or (ii) effecting beneficiary name
changes on Mortgage Loans registered with MERS, each as applicable) and amounts
due under Section 6.02(b).
(c) The Servicer may terminate this Agreement upon the determination
that its duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by the Servicer. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Owner. No such resignation shall become
effective until a successor shall have assumed the Servicer's responsibilities
and obligations hereunder in the manner provided in Section 6.02.
Section 6.02 Transfer Procedures.
In the event the Servicer is replaced pursuant to the terms of this
Agreement, the Servicer agrees to cooperate reasonably with the Owner and with
any party designated as the successor servicer or subservicer in transferring
the servicing to such successor servicer. In addition, the Servicer shall be
responsible for notifying the related Mortgagors of any transfer of servicing in
accordance with the requirements of the Real Estate Settlement Procedure Act and
the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing Act of 1990. On or before the
date upon which servicing is transferred from the Servicer to any successor
servicer (the "Transfer Date"), the Servicer shall prepare, execute and deliver
to the successor servicer any and all documents and other instruments, place in
such successor's possession all Mortgage Loan Documents in the possession of the
Servicer which are necessary or appropriate to effect the purposes of such
notice of termination, including but not limited to the transfer and endorsement
or assignment of the related Mortgage Loans and related documents. The Servicer
shall reasonably cooperate with the Owner and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder.
On the related Transfer Date, the Servicer shall comply with all of
the provisions of this Agreement to effect a complete transfer of the servicing
with respect to the related Mortgage Loans. Except as otherwise provided in this
Agreement, on the related Transfer Date for each related Mortgage Loan, this
Agreement, except for Articles VI, VIII and X and Sections 13.01, 13.06, 13.12
and 13.13 which shall survive the related Transfer Date, shall terminate with
respect to such Mortgage Loan.
(a) Mortgage Loans in Foreclosure. The servicing with respect to
Mortgage Loans in foreclosure on or before the related Transfer Date shall not
be transferred from the Servicer to the Owner or the successor servicer, as the
case may be, and such Mortgage Loans shall continue to be serviced by the
Servicer pursuant to the terms of this Agreement. However, if the Owner so
elects, the Owner may waive the provisions of this paragraph (a) and accept
transfer of servicing of such Mortgage Loans and all amounts received by the
Servicer thereunder.
(b) Advances. Subject to the limitations set forth in the definition
of "Nonrecoverable Advances", the Servicer shall be entitled to be reimbursed
for all unreimbursed Servicing Advances and Monthly Advances and any other
advances made by the Servicer pursuant to this Agreement with respect to any
Mortgage Loan on the related Transfer Date, but only if the servicer after the
related Transfer Date is not the Servicer or an Affiliate. In addition, the
Owner shall cause the Servicer to be reimbursed for any accrued and unpaid
Servicing Fees and for any trailing expenses representing Servicing Advances or
Monthly Advances for which invoices are received by the Servicer after the
Transfer Date; provided, that the Owner shall not be liable for any amounts
pursuant to this paragraph unless the Servicer has requested reimbursement and
delivered appropriate evidence of such reimbursable expense on or prior to the
date which is ninety days after the Transfer Date.
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the related
Transfer Date.
Prior to the related Transfer Date, the contents of each Servicing
File, to the extent the Mortgage Loan Documents have been received by the
Servicer, are and shall be held in trust by the Servicer for the benefit of the
Owner as the owner thereof. The Servicer shall maintain in the Servicing File a
copy of the contents of each Mortgage File and the originals of the documents in
each Mortgage File not delivered to the Owner. The possession of the Servicing
File by the Servicer is at the will of the Owner for the sole purpose of
servicing the related Mortgage Loan, pursuant to this Agreement, and such
retention and possession by the Servicer is in its capacity as the Servicer only
and at the election of the Owner; provided that the Servicer may keep copies of
any records it deems necessary for compliance with any state or federal record
retention requirements or as it deems advisable for use in defending any
litigation, action or claim. The Servicer shall release its custody of the
contents of any Servicing File only in accordance with written instructions from
the Owner, unless such release is required as incidental to the Servicer's
servicing of the Mortgage Loans pursuant to this Agreement.
The Servicer shall be responsible for maintaining, and shall
maintain, a complete set of books and records for each Mortgage Loan which shall
be marked clearly to reflect the ownership of each Mortgage Loan by the Owner.
In particular, the Servicer shall maintain in its possession, available for
inspection by the Owner or its designee, and shall deliver to the Owner or its
designee upon demand, evidence of compliance with this Agreement, with all
federal, state and local laws, rules and regulations, including but not limited
to documentation as to the method used in determining the applicability of the
provisions of the National Flood Insurance Act of 1968, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and eligibility
of any condominium project for approval by ▇▇▇▇▇▇ Mae and periodic inspection
reports as required by Section 2.15. To the extent that original documents
(other than documents evidencing the Mortgage Loans) are not required for
purposes of realization of Liquidation Proceeds or Insurance Proceeds, documents
maintained by the Servicer may be in the form of microfilm or microfiche or such
other reliable means of recreating original documents, including but not limited
to, optical imagery techniques so long as the Servicer complies with the
requirements of the ▇▇▇▇▇▇ ▇▇▇ Guide and ▇▇▇▇▇▇▇ Mac Guide.
The Servicer shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the Servicer
shall note transfers of Mortgage Loans. With respect to any assignment or
transfer made by the Owner pursuant to Section 8.05 of this Agreement, upon
receipt of notice of such assignment or transfer, the Servicer shall cause its
books and records to reflect the ownership of the Mortgage Loans of such
assignee, and shall release the previous Owner from its obligations hereunder
with respect to the Mortgage Loans sold or transferred arising following the
date of such sale or transfer. For the purposes of this Agreement, the Servicer
shall be under no obligation to deal with any person with respect to this
Agreement or the Mortgage Loans unless the books and records show such person as
the owner of the Mortgage Loan; provided, however, that with respect to the
Reconstituted Mortgage Loans, the Servicer is obligated to deal with the
Guarantor.
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification; Third Party Claims.
(a) The Servicer shall indemnify and hold harmless the Owner
(including prior Owners) (and if the Mortgage Loans are securitized, ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., GS Mortgage Securities Corp., the trustee, in its capacity as
trustee for the trust issuing the securities backed by the Mortgage Loans, and
the entity, if any, acting in the capacity of a master servicer in connection
with any securitization) and its officers, directors, employees and agents and
any successor servicer and its directors, officers, employees and agents (the
"Indemnified Parties"), and, if a Pass-Through Transfer occurs, the Guarantor
against any and all claims, losses, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and any other costs, fees
and expenses that the Indemnified Parties incur as a result of (i) the failure
of the Servicer to perform its duties, obligations, covenants and agreements and
service the Mortgage Loans in strict compliance with the terms of this Agreement
or (ii) a breach of any of the Servicer's representations and warranties set
forth in Article IX hereof. The Servicer shall immediately notify Owner if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans, and the Servicer shall assume (with the written consent of Owner) the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against the Servicer or the Indemnified Parties in
respect of such claim. The Servicer shall provide Owner with a written report of
all expenses and advances incurred by the Servicer pursuant to this Section 8.01
and Owner shall promptly reimburse the Servicer for all amounts advanced by it
pursuant to the preceding sentence except when the claim in any way relates to
the Servicer's failure to service and administer the Mortgage Loans in strict
compliance with the terms of this Agreement or for which the Indemnified Parties
are indemnified hereunder. Notwithstanding anything to the contrary in this
Agreement, in the event that Owner or its designee becomes record owner of any
Mortgaged Property, the Servicer shall not be deemed to have failed to perform
its obligations hereunder where it fails to act in response to any notice
delivered to the record holder of the Mortgaged Property if (i) statutory notice
was not delivered to the Servicer, (ii) the Servicer had no actual knowledge of
the situation surrounding such notice and (iii) the Servicer's inaction was due
entirely to the Servicer's lack of receipt of such notice.
Section 8.02 Limitation on Liability of the Servicer and Others.
The Servicer and any director, officer, employee or agent of the
Servicer may rely on any document of any kind which it in good faith reasonably
believes to be genuine and to have been adopted or signed by the proper
authorities respecting any matters arising hereunder. Subject to the terms of
Section 8.01, the Servicer shall have no obligation to appear with respect to,
prosecute or defend any legal action which is not incidental to the Servicer's
duty to service the Mortgage Loans in accordance with this Agreement.
Section 8.03 Limitation on Assignment and Resignation by the
Servicer.
The Servicer shall not assign this Agreement nor resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer and the Owner or upon the determination that the Servicer's duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by the Servicer as evidenced by an Opinion of Counsel delivered
to the Owner.
Section 8.04 Assignment by Owner.
No transfer of a Mortgage Loan may be made unless such transfer is
in compliance with the terms hereof. The Owner shall have the right to assign
its interest under this Agreement with respect to some or all of the Mortgage
Loans, and designate any Person to exercise any rights of the Owner hereunder;
provided that (a) Owner and such Person execute an Assignment and Assumption
Agreement substantially in the form of Exhibit 11 and such agreement is
delivered to the Servicer and (b) the Owner provides the Servicer with written
notice of the transfer 30 days prior to the effective date of such transfer.
Upon such assignment of rights and assumption of obligations, the
assignee or designee shall accede to the rights and obligations hereunder of the
Owner with respect to such Mortgage Loans and the Owner as assignor shall be
released from all obligations hereunder with respect to such Mortgage Loans from
and after the date of such assignment and assumption. All references to the
Owner in this Agreement shall be deemed to include its permitted assignee or
designee.
Section 8.05 Merger or Consolidation of the Servicer.
Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to all or substantially
all of the business of the Servicer (whether or not related to loan servicing),
shall be the successor of the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
Servicer shall not, without the prior written approval of the Owner, be a party
to any such merger, conversion or consolidation, or sell or otherwise dispose of
all or substantially all of its business or assets if, (i) as a result of such
merger, conversion or consolidation, sale or other disposition, an Event of
Default under Section 11.01 hereof would exist with respect to such successor
servicer, (ii) such successor is not an FNMA and FHLMC-approved servicer in good
standing, (iii) such successor is not an institution whose deposits are insured
by FDIC or a company whose business includes the servicing of mortgage loans and
which has a tangible net worth of $25,000,000 or greater or (iv) such successor
has a residential primary servicer rating for servicing of mortgage loans issued
by Standard & Poor's Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., Fitch, Inc. or ▇▇▇▇▇'▇ Investors Service, Inc. below "average" or its
equivalent. The Servicer shall give 60 days' prior written notice to the Owner
of any such merger, conversion, consolidation, sale or other disposition to
which the Servicer proposes to be a party. In the event that any successor
entity to the Servicer fails to meet the requirements set forth in the
immediately preceding sentence and the Owner does not consent to such successor
becoming the servicer hereunder, the Owner shall have the right to terminate
this Agreement with respect to the Servicer and any such successor upon notice
given as set forth in Section 11.01 hereof, without any payment of any penalty
or damages and without any liability whatsoever to the Servicer or any third
party.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF SERVICER
As of each Sale Date, the Servicer warrants and represents to, and
covenants and agrees with, the Owner as follows:
Section 9.01 Due Organization and Authority.
The Servicer is a New York State Chartered Corporation duly
organized, validly existing and in good standing under the laws of the State of
New York as now being conducted and is licensed, qualified and in good standing
in each state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Servicer, and in any event the Servicer is in compliance with
the laws of any such state to the extent necessary to ensure the enforceability
of the related Mortgage Loan in accordance with the terms of this Agreement. The
Servicer has the power and authority to make, execute, deliver and perform this
Agreement, and perform all of the transactions contemplated to be performed by
it under this Agreement, and has taken all necessary 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 Servicer enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies.
Section 9.02 Ordinary Course of Business.
The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Servicer.
Section 9.03 No Violation.
The execution, delivery and performance of this Agreement by the
Servicer will not violate any provision of any existing law or regulation or any
order or decree of any court applicable to the Servicer, except for violations
that will not adversely affect the Servicer's ability to perform its obligations
under this Agreement or the certificate of incorporation of the Servicer, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Servicer is a party or by which the Servicer may be
bound.
Section 9.04 Ability to Service.
The Servicer has the facilities, procedures, and experienced
personnel necessary for the sound servicing of mortgage loans of the same type
as the Mortgage Loans. The Servicer is in good standing to enforce and service
mortgage loans in the jurisdiction wherein the Mortgaged Properties are located.
Section 9.05 Ability to Perform.
The Servicer does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant contained in this
Agreement.
Section 9.06 Litigation.
No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending or to the knowledge of the
Servicer threatened, against the Servicer or with respect to this Agreement,
which if adversely determined would have a material adverse effect on the
transactions contemplated by this Agreement.
Section 9.07 No Consent Required.
The Servicer is not required to obtain the consent of any other
party or any consent, license, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except such as have been obtained or made or as to which the failure
to obtain or make will not materially adversely affect the ability of the
Servicer to perform all obligations hereunder.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF OWNER
As of each Sale Date, the Owner warrants and represents to, and
covenants and agrees with, the Servicer as follows:
Section 10.01 Organization and Good Standing; Licensing.
The Owner is a New York limited partnership duly organized, validly
existing and has the power and authority to own its assets and to transact the
business in which it is currently engaged.
Section 10.02 Authorization; Binding Obligations.
The Owner has the power and authority to make, execute, deliver and
perform this Agreement, and perform all of the transactions contemplated to be
performed by it under this Agreement, and has taken all necessary 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 Owner enforceable in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the availability
of equitable remedies.
Section 10.03 No Consent Required.
The Owner is not required to obtain the consent of any other party
or any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except such as have been obtained or made or as to which the failure
to obtain or make will not materially adversely affect the ability of the Owner
to perform all obligations hereunder.
Section 10.04 No Violations.
The execution, delivery and performance of this Agreement by the
Owner will not violate any provision of any existing law or regulation or any
order or decree of any court applicable to the Owner, except for violations that
will not adversely affect the Owner's ability to perform its obligations under
this Agreement or the organizational documents of the Owner, or constitute a
material breach of any mortgage, indenture, contract or other agreement to which
the Owner is a party or by which the Owner may be bound.
Section 10.05 Litigation.
No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending or to the knowledge of the
Owner threatened, against the Owner or with respect to this Agreement, which if
adversely determined would have a material adverse effect on the transactions
contemplated by this Agreement.
Section 10.06 Good Title.
The Owner is the sole holder of the Servicing Rights in respect of
each Mortgage Loan and has good and marketable title to and has the right to
assign and transfer the Servicing Rights, and to assign, transfer and deliver
the Servicing Rights as contemplated by this Agreement free and clear of any and
all claims, charges, defenses, security interests, liens, offsets and
encumbrances. The sale, transfer and assignment of the Servicing Rights by the
Owner are valid and enforceable and will effectively vest in the Servicer good
title to the Servicing Rights, free and clear of any and all liens, claims and
encumbrances.
Section 10.07 Compliance with Law.
The Owner has complied in all material respects with all applicable laws,
the violation of which would be reasonably likely to materially and adversely
affect the Servicing Rights, or delay the consummation of the transactions
contemplated hereby.
Section 10.08 Indemnification by the Owner.
The Owner shall defend and indemnify the Servicer and hold it harmless
against any losses, damages, penalties, fines, forfeitures, judgments and any
related costs including, without limitation, reasonable and necessary legal
fees, resulting from any claim, demand, defense or liability based upon or
arising out of any assertion based on, grounded upon or resulting from a breach
of any of the Owner's representations and warranties contained in this Article
X. In addition to the obligations of the Owner set forth in this Article X, the
Servicer may pursue any and all remedies otherwise available at law or in
equity, including, but not limited to, the right to seek damages.
Section 10.09 Representations and Warranties.
The Owner and the Servicer hereby acknowledge that, pursuant to each
Servicer Acknowledgement, the related Underlying Seller shall acknowledge that
the Servicer is the "Successor Servicer" under the related Underlying
Agreement(s), copies of which shall be attached to the related Commitment
Letter. The Owner hereby restates for the benefit of the Servicer the
representations and warranties relating to the Mortgage Loans made by the
related Underlying Seller to the Owner in the related Underlying Agreements;
provided, however, that the Servicer shall only be entitled to pursue against
the Owner the remedies for a breach of any such representation and warranty to
the extent that the Servicer, as Successor Servicer, shall have first used
commercially reasonable efforts, exclusive of bringing legal action against the
Underlying Seller, to secure the Underlying Seller's cooperation and compliance
in curing, to Servicer's reasonable satisfaction, any breach of a representation
and warranty relating to a Mortgage Loan or Mortgage Loans.
ARTICLE XI
DEFAULT
Section 11.01 Events of Default.
The following shall constitute an Event of Default under this
Agreement on the part of the Servicer:
(a) any failure by the Servicer to remit to the Owner any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which notice of such
failure is given to the Servicer, requiring the same to be remedied, shall have
been given to the Servicer by the Owner; or
(b) any failure by the Servicer to deliver (i) the annual statement
of compliance required under Section 4.04, (ii) the annual independent public
accountants' servicing report or attestation required under Section 4.05, (iii)
the annual assessment of servicing compliance required under Section 4.08, or
(iv) the certification required under Section 13.13(a)(vii) in the form of
Exhibit 13, within 15 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Owner;
(c) the failure by the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement or in the Custodial Agreement which
continues unremedied for a period of 30 days after the date on which notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Owner (the date of delivery of such notice, the "Notice Date");
provided, however, that in the case of a failure that cannot be cured within
thirty (30) days after the Notice Date, the cure period will be extended for a
successive thirty (30) day period if the Servicer can demonstrate to the
reasonable satisfaction of the Owner that the failure can be cured and the
Servicer is diligently pursuing remedial action; provided, further, that if the
failure cannot be cured within such successive thirty (30) day period, the cure
period may be extended in the Owner's sole discretion for another successive
thirty (30) day period; or
(d) the failure by the Servicer in any month, to deliver to the
Owner the Data File on the Data File Delivery Date and such failure continues
uncured for more than 30 days;
(e) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of 60 days; or
(f) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(g) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(h) the Servicer fails to maintain its license to do business or
service residential mortgage loans in any jurisdiction where the Mortgaged
Properties are located; or
(i) the Servicer ceases to meet the qualifications of a FNMA,
▇▇▇▇▇▇▇ Mac or GNMA servicer; or
(j) the Servicer attempts to assign its right to servicing
compensation hereunder or the Servicer attempts, without the consent of the
Owner, to assign this Agreement or the servicing responsibilities hereunder or
to delegate its duties hereunder or any portion thereof in a manner not
permitted under this Agreement; or
(k) the Servicer fails to maintain a tangible net worth of not less
than $25,000,000.
In each and every such case, so long as an Event of Default shall
not have been remedied, in addition to whatsoever rights the Owner may have at
law or equity to damages, including injunctive relief and specific performance,
the Owner or, if applicable, the Guarantor, by notice in writing to the
Servicer, may terminate without compensation all the rights and obligations of
the Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof.
Upon receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the successor
appointed pursuant to Section 6.02. Upon written request from the Owner, the
Servicer shall prepare, execute and deliver any and all documents and other
instruments, place in such successor's possession all Mortgage Files, and do or
accomplish all other acts or things reasonably 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, at the Servicer's sole expense. The Servicer agrees to
cooperate reasonably with the Owner and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to such successor for administration by it of
all cash amounts which shall at the time be credited by the Servicer to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.
Section 11.02 Waiver of Defaults.
The Owner or, if applicable, the Guarantor, may waive any default by
the Servicer in the performance of its obligations hereunder and its
consequences. Upon any such waiver of a past default, such default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived.
ARTICLE XII
TRANSFER
Section 12.01 Transfer Documents.
The "Transfer Documents" for the Mortgage Loans to be serviced
hereunder shall consist of fully executed originals of the following documents:
With respect to the initial Sale Date:
1. this Agreement;
2. a Custodial Account Letter Agreement or a Custodial Account
Certification, as applicable, as required hereunder, in the
form of either Exhibit 2 or 3 hereto;
3. an Escrow Account Letter Agreement or an Escrow Account
Certification, as applicable, as required hereunder, in the
form of either Exhibit 4 or 5 hereto;
4. an Officer's Certificate, in the form of Exhibit 7 hereto,
with respect to the Servicing Rights Purchaser, the Servicer
and the Purchaser, including all attachments thereto; and
5. an Opinion of Counsel to the Servicer (who may be an employee
of the Servicer), in the form of Exhibit 6 hereto ("Opinion of
Counsel to the Servicer"); and
6. a Power of Attorney in the form of Exhibit 12 hereto
With respect to each Sale Date:
1. An Acknowledgment Agreement, in the form of Exhibit 9 hereto;
and
2. A Mortgage Loan Schedule.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Notices.
All notices, requests, demands and other communications which are
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
registered or certified mail, return receipt requested:
(a) If to Owner to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
With a Copy to:
General Counsel (at the above-stated address)
(b) If to the Servicer:
M&T Mortgage Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.:
With a Copy to:
M&T Mortgage Corporation
One M&T ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Section 13.02 Entire Agreement; Amendment.
This Agreement, including all documents and exhibits incorporated by
reference herein, constitutes the entire agreement between the parties with
respect to servicing of the Mortgage Loans. This Agreement may be amended and
any provision hereof waived, but, only in writing signed by the party against
whom such enforcement is sought.
Section 13.03 Execution; Binding Effect.
This Agreement may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.03, this Agreement
shall inure to the benefit of and be binding upon the Servicer and the Owner and
their respective permitted successors and assigns.
Section 13.04 Headings.
Headings of the Articles and Sections in this Agreement are for
reference purposes only and shall not be deemed to have any substantive effect.
Section 13.05 Duration of Agreement.
This Agreement shall continue in existence and effect until
terminated as herein provided.
Section 13.06 Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York, except to the extent preempted by Federal law, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 13.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto. The duties and
responsibilities of the Servicer shall be rendered by it as an independent
contractor and not as an agent of the Owner. The Servicer shall have full
control of all of its acts, doings, proceedings, relating to or requisite in
connection with the discharge of its duties and responsibilities under this
Agreement.
Section 13.08 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement. If the invalidity of any part, provision, representation or warranty
of this Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate in good faith to
develop a structure the economic effect of which is nearly as possible the same
as the economic effect of this Agreement without regard to such inability.
Section 13.09 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage 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, such recordation to be
effected by the Servicer. The Servicer shall bear the costs of such recordation
to the extent that it has been provided funds for such purpose by the Owner as
set forth in the related Commitment Letter.
Section 13.10 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are integral parts of this Agreement.
Section 13.11 Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 13.12 No Solicitation.
From and after the date hereof, the Servicer agrees that it will not
take any action or permit or cause any action to be taken by any of its
employees, agents or affiliates, or by any independent contractors acting on the
Servicer's behalf, to target solicit in any manner whatsoever any Mortgagor to
prepay or refinance a Mortgage Loan.
Section 13.13 Cooperation of the Servicer with a Reconstitution.
The Servicer and the Owner agree that with respect to some or all of
the Mortgage Loans, the Owner may effect either:
(1) one or more Whole Loan Transfers;
(2) one or more Pass-Through Transfers.
The Servicer shall reasonably cooperate with the Owner with respect
to any Servicing Rights Package in connection with up to three (or such other
number as may be reflected in the related Commitment Letter) Whole Loan
Transfers or Pass-Through Transfers contemplated by the Owner pursuant to this
Section 13.13 with respect to the related Mortgage Loans.
In connection with any Reconstitution in which the Owner and the
Servicer have agreed that the Servicer shall act as the servicer in the
Reconstitution, the Owner shall deliver any agreement (the "Reconstitution
Agreement") or other document related to the Whole Loan Transfer or Pass Through
Transfer to the Servicer at least 15 Business Days prior to such transfer. Such
Reconstitution Agreement may, in the Owner's reasonable discretion, contain
contractual provisions not set forth in this Agreement, including, but not
limited to, (i) customary certificate payment delays, (ii) representations and
warranties (dated as of the Reconstitution Date) of the Servicer conforming in
all material respects to the representations and warranties in this Agreement,
and (iii) such provisions with regard to servicing responsibilities, investor
reporting, segregation and deposit of principal and interest payments, custody
of the Mortgage Loans, and other provisions that conform to secondary market
standards for mortgage-backed securities backed by mortgage loans similar to the
Mortgage Loans or as may be required by one or more Rating Agencies. The
Servicer shall promptly review such Reconstitution Agreement and/or related
documents, and provided that such Reconstitution Agreement contains servicing
provisions substantially similar to those herein or otherwise acceptable to the
Servicer in its sole discretion, shall execute such Reconstitution Agreement
and/or related documents. The Servicer's refusal to execute any Reconstitution
Agreement or related documents may be based on any provision which materially
(a) increases the liability of the Servicer and/or (b) affects the Servicer's
profitability from that contemplated in the applicable Commitment Letter. Any
cooperation, from the Servicer in connection with any Whole Loan Transfer or
Pass-Through Transfer contemplated by this Section shall include (a) delivery of
a legal opinion relating to the Servicer; (b) the furnishing, at Owner's
expense, to any Guarantor and the master servicer or trustee, as applicable,
and/or Owner any and all publicly available information and appropriate
verification of information which may be reasonably available to the Servicer,
whether through letters of its auditors and counsel or otherwise, as Owner, the
Guarantor, the trustee or a master servicer shall reasonably request as to the
related Mortgage Loans; (c) with respect to any Mortgage Loans sold in a
Pass-Through Transfer, the Servicer agrees that it will deliver on or before
March 1st of each year beginning March 1, 2004, to the depositor, the master
servicer (if any), the Guarantor (if any) and the trustee for the securitization
trust in the Pass-Through Transfer, and their officers, directors and
affiliates, a certification in the form attached as Exhibit 13 hereto, executed
by the senior officer in charge of servicing at the Servicer for use in
connection with any Form 10-K to be filed with the Securities and Exchange
Commission with respect to the securitization trust and (d) the furnishing of
information to the Owner, any Guarantor and the master servicer or trustee, as
applicable, for use in an offering document for such Pass-Through Transfer,
conforming to market standards for Pass-Through Transfers of this type, relating
to the Servicer and its servicing practices and portfolio (the "Servicer
Information"). The Servicer shall enter into a customary indemnification
agreement pursuant to which it shall indemnify the Guarantor, the Owner, each
Affiliate of the Owner participating in any such Reconstitution and each Person
who controls the Owner or such Affiliate, and their respective present and
former officers and directors, and hold each of them harmless from and against
any losses, claims, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to the Servicer
Information. The Owner shall enter into a customary indemnification agreement
pursuant to which it shall indemnify the Servicer and each Person who controls
the Servicer, and their respective present and former officers and directors,
and hold each of them harmless from and against any losses, claims, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to information set forth in the offering document for
such Pass-Through Transfer, other than the related Servicer Information.
If requested by the Owner in connection with any Reconstitution, the
Servicer and the Owner shall execute a letter agreement setting forth the
indemnification obligations set forth in this Section 13.13. In the event that
the Servicer is not the master servicer, servicer or sub-servicer with respect
to a Reconstitution, any and all reasonable costs, fees and expenses incurred by
the Servicer in connection with the foregoing shall be reimbursed by Owner after
receipt by the Owner from the Servicer of an invoice therefor.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan
Transfer or Pass-Through Transfer shall be subject to this Agreement and shall
continue to be serviced in accordance with the terms of this Agreement and with
respect thereto this Agreement shall remain in full force and effect.
The Owner and the Servicer hereby agree that prior to the
effectiveness of Regulation AB, the parties shall enter into an amendment to
this agreement in form and substance acceptable to the Owner and Servicer,
providing for the additional Servicer reporting required under Regulation AB.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the date
first above written.
▇▇▇▇▇▇▇ SACHS MORTGAGE
COMPANY
(Owner),
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Real Estate Funding
Corp., its General Partner
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
M&T MORTGAGE CORPORATION
(Servicer)
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
EXHIBIT 1
INFORMATION TO BE INCLUDED IN MONTHLY REMITTANCE ADVICE
Loan number;
Servicer loan number;
Borrower name;
Scheduled payment amount;
Note interest rate;
Net rate;
Servicing fee rate;
New payment amount;
New loan rate;
ARM index rate;
Actual beginning balance;
Actual ending balance;
Next due date;
Curtailment amount 1;
Curtailment date 1;
Curtailment adjustment amount 1;
Curtailment amount 2;
Curtailment date 2;
Curtailment adjustment amount 2;
Curtailment amount 3;
Curtailment date 3;
Curtailment adjustment amount 3;
Scheduled beginning balance;
Scheduled ending balance;
Scheduled principal balance;
Scheduled net amount;
Liquidation amount;
PIF date;
Action code;
Principal adjustment date;
Interest adjustment date;
Prepayment Charge amount;
Soldier and sailor adjustment amount;
Non-adv loan amount; and
CAT.
EXHIBIT 2
CUSTODIAL ACCOUNT CERTIFICATION
_______ __, 200_
The Servicer hereby certifies that it has established the account
described below as a Custodial Account pursuant to Section 2.08 of the Flow
Servicing Rights Purchase and Servicing Agreement, dated as of August 22, 2005,
Fixed and Adjustable Rate Alt-A Mortgage Loans. The parties hereto intend that
the Custodial Account established hereby shall be a Special Deposit Account.
Title of Account: M&T Mortgage Corporation, in trust for "▇▇▇▇▇▇▇
Sachs Mortgage Company, Fixed and Adjustable Rate
Alt-A Residential Mortgage Loans."
Account Number: ______________________________
Address of office or branch
of the Servicer at
which Account is maintained: ______________________________
M&T MORTGAGE CORPORATION
Servicer
By:____________________________________
Name:__________________________________
Title:_________________________________
Date:__________________________________
EXHIBIT 3
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 200_
To:______________________________
______________________________
______________________________
(the "Depository")
As the Servicer under the Flow Servicing Rights Purchase and
Servicing Agreement, dated as of August 22, 2005, Fixed and Adjustable Rate
Alt-A Mortgage Loans (the "Agreement"), we hereby authorize and request you to
establish an account, as a Custodial Account pursuant to Section 2.08 of the
Agreement, to be designated "M&T Mortgage Corporation, as servicer, in trust for
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company" All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Servicer. You may refuse any deposit
which would result in violation of the requirement that the account be fully
insured as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
M&T MORTGAGE CORPORATION
Servicer
By:____________________________________
Name:__________________________________
Title:_________________________________
Date:__________________________________
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation. The
parties hereto intend that the Custodial Account established hereby shall be a
Special Deposit Account.
______________________________________
Depository
By:_________________________________
Name:_______________________________
Title:______________________________
Date:_______________________________
EXHIBIT 4
ESCROW ACCOUNT CERTIFICATION
_________ ___, 200_
________________________ hereby certifies that it has established
the account described below as an Escrow Account pursuant to Section 2.10 of the
Flow Servicing Rights Purchase and Servicing Agreement, dated as of August 22,
2005, Fixed and Adjustable Rate Alt-A Residential Mortgage Loans. The parties
hereto intend that the Escrow Account established hereby shall be a Special
Deposit Account.
Title of Account: "M&T Mortgage Corporation, in trust for Owners of
Residential Fixed and Adjustable Rate Mortgage
Loans, and various Mortgagors."
Account Number: _________________________
Address of office or branch
of the Servicer at
which Account is maintained: _________________________
_________________________________________
_________________________________________
_________________________________________
M&T MORTGAGE CORPORATION
Servicer
By:
Name:__________________________________
Title:_________________________________
EXHIBIT 5
ESCROW ACCOUNT LETTER AGREEMENT
_______ ___, 200_
To:________________________________
________________________________
________________________________
(the "Depository")
As the Servicer under the Flow Servicing Rights Purchase and
Servicing Agreement, dated as of August 22, 2005, Fixed and Adjustable Rate
Alt-A Residential Mortgage Loans (the "Agreement"), we hereby authorize and
request you to establish an account, as an Escrow Account pursuant to Section
2.10 of the Agreement, to be designated as "M&T Mortgage Corporation, in trust
for the Owners of Residential Fixed and Adjustable Rate Mortgage Loans, and
various Mortgagors." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. You may refuse any deposit which
would result in violation of the requirement that the account be fully insured
as described below. This letter is submitted to you in duplicate. Please execute
and return one original to us.
M&T MORTGAGE CORPORATION
Servicer
By:____________________________________
Name:__________________________________
Title:_________________________________
Date:__________________________________
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation. The
parties hereto intend that the Escrow Account established hereby shall be a
Special Deposit Account.
_________________________
Depository
By:_________________________________
Name:_______________________________
Title:______________________________
Date:_______________________________
EXHIBIT 6
FORM OF OPINION OF COUNSEL TO THE
SERVICER (DATE)
▇▇▇▇▇▇▇ Sachs Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to M&T Mortgage Corporation (the "Company"), with respect to certain
matters in connection with the Flow Servicing Rights Purchase and Servicing
Agreement, dated as of August 22, 2005, among the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company (the "Owner") (the "Servicing Agreement"). Capitalized terms
not otherwise defined herein have the meanings set forth in the Servicing
Agreement.
[We] [I] have examined the following documents:
1. the Servicing Agreement; and
2. such other documents, records and papers as we have deemed necessary and
relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Servicing Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
3. The Company is a New York State Chartered Corporation duly organized,
validly existing and in good standing under the laws of its state of New
York and is qualified and in good standing in each state where a Mortgaged
Property is located if the laws of such state require qualification in
order to conduct business of the type conducted by the Servicer.
4. The Company has the power to engage in the transactions contemplated by
the Servicing Agreement to which it is a party and all requisite power,
authority and legal right to execute and deliver such Servicing Agreement
and to perform and observe the terms and conditions of such Servicing
Agreement.
5. The Servicing Agreement has been duly authorized, executed and delivered
by the Company, and is a legal, valid and binding agreement enforceable in
accordance with its respective terms against the Company, subject to
bankruptcy laws and other similar laws of general application affecting
rights of creditors and subject to the application of the rules of equity,
including those respecting the availability of specific performance, none
of which will materially interfere with the realization of the benefits
provided thereunder.
6. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original signature in order to complete
the transactions contemplated by the Servicing Agreement by original [or
facsimile] signature.
7. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Servicing Agreement or the consummation of the transactions contemplated
by the Servicing Agreement or (ii) any required consent, approval,
authorization or order has been obtained by the Company.
8. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of, the Servicing Agreement conflicts or will
conflict with or results or will result in a breach of or constitutes or
will constitute a default under the charter, by-laws or other
organizational documents of the Company, the terms of any indenture or
other agreement or instrument to which the Company is a party or by which
it is bound or to which it is subject, or violates any statute or order,
rule, regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by which
it is bound.
9. There is no action, suit, proceeding or investigation pending or
threatened against the Company which, in [our] [my] judgment, either in
any one instance or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Company or in any material impairment of the right or
ability of the Company to carry on its business substantially as now
conducted or in any material liability on the part of the Company or which
would draw into question the validity of the Servicing Agreement or the
Mortgage Loans or of any action taken or to be taken in connection with
the transactions contemplated thereby, or which would be likely to impair
the ability of the Company to perform under the terms of the Servicing
Agreement.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
_________________________________________
[Name]
[Assistant] General Counsel
EXHIBIT 7
FORM OF SERVICER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of M&T Mortgage Corporation, a New York State Chartered
Corporation, organized under the laws of the state of New York (the "Company")
and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy of the
charter of the Company which is in full force and effect on the date
hereof and which has been in effect without amendment, waiver, rescission
or modification.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy of the
bylaws of the Company which are in effect on the date hereof and which
have been in effect without amendment, waiver, rescission or modification.
3. Attached hereto as Exhibit 3 is an original certificate of good standing
of the Company issued within ten days of the date hereof, and no event has
occurred since the date thereof which would impair such standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy of the
corporate resolutions of the Board of Directors of the Company authorizing
the Company to execute and deliver the Flow Servicing Rights Purchase and
Servicing Agreement, dated as of August 22, 2005, among the Company, and
▇▇▇▇▇▇▇ Sachs Mortgage Company (the "Owner"), (the "Servicing Agreement")
and such resolutions are in effect on the date hereof.
5. Each person listed on Exhibit 5 attached hereto who, as an officer or
representative of the Company, signed (a) the Servicing Agreement, and (b)
any other document delivered or on the date hereof in connection with any
purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected
or appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated: By:______________________________________
Name:____________________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
[___________________________], hereby certify that ____________ is the duly
elected, qualified and acting [Vice] President of the Company and that the
signature appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:___________________________ By:______________________________
Name:____________________________
[Seal] Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ----------
_________________________ ________________________ ________________________
_________________________ ________________________ ________________________
_________________________ ________________________ ________________________
_________________________ ________________________ ________________________
_________________________ ________________________ ________________________
_________________________ ________________________ ________________________
EXHIBIT 8
MORTGAGE LOAN DOCUMENTS
The following documents shall constitute the Mortgage Loan Documents
with respect to each Mortgage Loan:
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in
the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge, if
state law so allows and the Custodian is so advised by the loan seller
that state law so allows. If the Mortgage Loan was acquired by the loan
seller in a merger, the endorsement must be by "[Last Endorsee], successor
by merger to [name of predecessor]". If the Mortgage Loan was acquired or
originated by the Last Endorsee while doing business under another name,
the endorsement must be by "[Last Endorsee], formerly known as [previous
name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the loan seller cannot deliver or cause
to be delivered the original Mortgage with evidence of recording thereon
on or prior to the related Sale Date because of a delay caused by the
public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, the loan seller
shall deliver or cause to be delivered to the Custodian, a photocopy of
such Mortgage, together with (i) in the case of a delay caused by the
public recording office, an Officer's Certificate of the loan seller (or
certified by the title company, escrow agent, or closing attorney) stating
that such Mortgage has been dispatched to the appropriate public recording
office for recordation and that the original recorded Mortgage or a copy
of such Mortgage certified by such public recording office to be a true
and complete copy of the original recorded Mortgage will be promptly
delivered to the Custodian upon receipt thereof by the loan seller; or
(ii) in the case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage
must be duly recorded only if recordation is either necessary under
applicable law or commonly required by private institutional mortgage
investors in the area where the Mortgaged Property is located or on
direction of the Owner as provided in this Agreement. If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned to the Owner.
If the Assignment of Mortgage is not to be recorded, the Assignment of
Mortgage shall be delivered in blank. If the Mortgage Loan was acquired by
the loan seller in a merger, the Assignment of Mortgage must be made by
"[Seller], successor by merger to [name of predecessor]". If the Mortgage
Loan was acquired or originated by the loan seller while doing business
under another name, the Assignment of Mortgage must be by "[Seller],
formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Originator to the
Last Endorsee with evidence of recording thereon, or if any such
intervening assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains the
original recorded assignments of mortgage, the loan seller shall deliver
or cause to be delivered to the Custodian, a photocopy of such intervening
assignment, together with (i) in the case of a delay caused by the public
recording office, an Officers Certificate of the loan seller (or certified
by the title company, escrow agent, or closing attorney) stating that such
intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon
receipt thereof by the loan seller; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment is
lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a
true and complete copy of the original recorded intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be true and
complete by the title insurance company;
(h) original powers of attorney, if applicable, or, if in connection
with any Mortgage Loan, the loan seller cannot deliver or cause to be
delivered the original power of attorney with evidence of recording
thereon, if applicable, on or prior to the related Sale Date because of a
delay caused by the public recording office, the loan seller shall deliver
or cause to be delivered to the Custodian, a photocopy of such power of
attorney, together with an Officer's Certificate of the loan seller (or
certified by the title company, escrow agent, or closing attorney) stating
that such power of attorney has been dispatched to the appropriate public
recording office for recordation and that the original recorded power of
attorney or a copy of such power of attorney certified by such public
recording office to be a true and complete copy of the original recorded
power of attorney will be promptly delivered to the Custodian upon receipt
thereof by the loan seller;
(i) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage; and
The following documents, together with the Mortgage Loan Documents,
shall constitute the Mortgage File with respect to each Mortgage Loan:
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) All processing, underwriting and closing papers and records
which are customarily contained in a mortgage loan file and which are
required to document the Mortgage Loan or to service the Mortgage Loan.
(o) Amortization schedule, if applicable.
EXHIBIT 9
FORM OF ACKNOWLEDGMENT AGREEMENT
THIS ACKNOWLEDGMENT AGREEMENT ("Acknowledgement Agreement") entered into
as of the Sale Date set forth below by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE
COMPANY, a New York limited partnership (the "Owner") and M&T MORTGAGE
CORPORATION, a New York State Chartered Corporation (the "Servicer"), provides
as follows:
A. Purchase Agreement. Reference is made to the Flow Servicing Rights
Purchase and Servicing Agreement dated as of August 22, 2005 (the "Servicing
Rights Purchase Agreement"), which terms are expressly incorporated herein. All
terms and conditions of this transaction shall be governed by the Servicing
Rights Purchase Agreement and this Acknowledgment Agreement; provided, however,
that in the event the terms of the Servicing Rights Purchase Agreement are
inconsistent with the terms of this Acknowledgment Agreement, this
Acknowledgment Agreement shall control.
B. Defined Terms. The following terms as used in the Servicing Rights
Purchase Agreement and this Acknowledgment Agreement shall have the meanings set
forth below:
1. Sale Date: [Date]
2. Custodian: [Custodian]
3. Custodial Agreement: Custodial Agreement, dated as of
[____________], by and between the Seller and the Custodian.
4. Mortgage Loans: The residential mortgage loans identified on the
Mortgage Loan Schedule attached as Schedule I to this Acknowledgment
Agreement.
5. Purchase Price: The "Purchase Price" for the Servicing Rights
related to the Mortgage Loans shall equal to the product of (i)
[________]% and (ii) the unpaid principal balance of the Mortgage
Loans as of the Sale Date.
6. Underling Seller: [Name of underlying Seller]
7. Underlying Agreements: [Underlying MLPA and Interim Servicing
Agreement]
C. Agreement to Sell the Servicing Rights. Subject to the terms and
provisions of the Servicing Rights Purchase Agreement and this Acknowledgment
Agreement, the Owner hereby sells, assigns, conveys and sets over to the
Servicer as of the Sale Date, without recourse, the Servicing Rights with
respect to the Mortgage Loans. The Servicer hereby accepts the Servicing Rights
and agrees to pay the Purchase Price for the Servicing Rights to the Owner.
D. Acceptance of Servicing Responsibilities. The Servicer shall perform
all servicing responsibilities with respect to the Mortgage Loans. The Servicer
accepts such servicing responsibilities and agrees to service the Mortgage Loans
in accordance with the Agreement.
E. Payment Instructions. The Servicer shall pay the Purchase Price to the
Owner pursuant to the following wiring instructions:
Beneficiary Bank: Citibank, NYC
ABA Routing Number: ▇▇▇▇▇▇▇▇▇
Beneficiary Account Name: ▇▇▇▇▇▇▇ Sachs Mortgage Company
Account Number: ▇▇▇▇▇▇▇▇
Reference: [Purchase of Servicing Rights--Name of
Underlying Seller and Sale Date]
F. Limited Effect. Provisions of the Servicing Rights Purchase Agreement
not expressly amended hereby shall remain in full force and effect without
change or modification. Nothing contained herein shall be deemed to waive any
rights, remedies or privileges of the Owner including, without limitation, the
remedies accorded the Owner under Section 8.01.
G. Applicable Law. THIS ACKNOWLEDGMENT AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES),
EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.
H. Counterparts. This Acknowledgment Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
an original, and all such counterparts shall constitute one and the same
instrument.
Remainder of Page Intentionally Left Blank
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the Sale
Date.
PURCHASER:
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,
By: ▇▇▇▇▇▇▇ Sachs Real Estate
Funding Corp.,
its General Partner
By:___________________________________
Name:_________________________________
Title:________________________________
SERVICER
M&T MORTGAGE CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
EXHIBIT 10
REPORTING REQUIREMENTS
(Pursuant to Section 3.02 of the Servicing Agreement, the Servicer shall deliver
the information in this Exhibit 10 to the Owner on the Data Delivery Date in
.csv format.)
LOAN NUMBER
INVESTOR ID
INVESTOR NAME
INVESTOR LOAN NUMBER
MORTGAGOR LAST NAME
MORTGAGOR FIRST NAME
NEXT PAYMENT DUE DATE
FIRST PRINCIPAL BALANCE
FIRST P AND I AMOUNT
T AND I MONTHLY AMOUNT
LOAN MATURES DATE
ANNUAL INTEREST RATE
RECOVER CORP ADVANCE BALANCE
THIRD PARTY RECOVERABLE CA BAL
NON REC CORP ADVANCE BALANCE
ESCROW BALANCE
ESCROW ADVANCE BALANCE
RESTRICTED ESCROW BALANCE
BAD CHECK TABLE
STATE
ZIP CODE
SERVICING TYPE
SENIOR LIEN AMOUNT
INTEREST PAID TO DATE
LAST PAYMENT DATE
DAYS PAST DUE_____
DELINQUENCY CONVENTION
NEXT PAYMENT RESET DATE
NEXT RATE RESET DATE
DELINQUENCY STATUS-T30
DELINQUENCY STATUS-T60
DELINQUENCY STATUS-T90
DELINQUENCY STATUS T120
RECENT PROPERTY VALUATION
RECENT PROPERTY VALUATION DATE
TOTAL MONTHLY PAYMENT PRINCIPAL
TOTAL MONTHLY PAYMENT INTEREST
TOTAL MONTHLY PAYMENT PENALTIES/FEES
TOTAL MONTHLY ESCROW PAYMENT
TOTAL MONTHLY PREPAYMENT AMOUNT
TOTAL PREPAYMENT PENALTIES
TOTAL MONTHLY PAYMENT
BKR STATUS CODE
CKR CHAPTER TYPE
BKR FILING DATE
BKR PREPETITION CONFIRM DATE
BKR PREPETITION CONF DATE
BKR POST PETITION DUE DATE
BKR REMOVAL DATE
BKR REMOVAL CODE
FC STATUS CODE
FC STOP CODE
FC STOP CODE DESCRIPTION
FC STATUS CODE CHANGE DATE
FC SALE DATE
FC SALE AMOUNT
LOSS MIT STATUS CODE
LOSS MIT SET UP DATE
LOSS MIT STAGE CODE
LOSS MIT TYPE CODE
LOSS MIT REMOVAL DATE
REO STATUS CODE
REO STAGE CODE
REO CMA AS IS VALUE
REO CMA COMPLETED DATE
REO EVICTION START DATE
REO EVICTION COMPLETED DATE
REO LISTING START DATE
REO LISTING PRICE AMOUNT
REO COMPLETED DATE
REO SALE PRICE AMOUNT
APPRAISAL DATE
PROPERTY VALUE AMOUNT
CONVEYANCE CONDITION
FHA PART A FILED
FHA PART A RECD
DEED SENT FOR RECORDING
TITLE APPROVAL
FHA PART B FILED
FHA PART B RECD
VA CLAIM FILED
LOAN_NBR
SERVICER LOAN_NBR
BORROWER_NAME
SCHED_PMT_AMT
NOTE_INT_RATE
SERV_FEE_RATE
NEW_PAY_AMT
NEW_LOAN_RATE
ARM_INDEX_RATE
ACTL_BEG_BAL
ACTL_END_BAL
NEXT_DUE_DATE
CURT_DATE_1
CURT_ADJ_AMT_1
CURT_AMT_2
CURT_DATE_2
CURT_ADJ_AMT_2
CURT_AMT_3
CURT_DATE_3
CURT_ADJ_AMT_3
SCHED_BEG_BAL
SECHED_END_BAL
SCHED_PRIN_AMT
SCHED_NET_INT
LIQ_AMT
PIF_DATE
ACTION_CODE
PRIN_ADJ_AMT
INT_ADJ_AMT
PREPAYMENT PENALTY AMT
SOLDIER_SAILOR ADJ AMT
NON ADV LOAN AMT
CAT
REMITTANCE
PAYMENT DATE
1 If Counts in Totals
SCHED_PMT_AMT
SCHED_BEG_BAL
SCHED_END_BAL
ACTL_BEG_BAL
ACTL_END_BAL
EXHIBIT 11
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT made this ___ day of ________, 200_
(this "Agreement"), among _____________________, as servicer (the
"Servicer"), _______________________, as assignee (the "Assignee"), and
_____________________, as assignor (the "Depositor") and as acknowledged by
_______________________, as master servicer (the "Master Servicer").
WHEREAS, ▇▇▇▇▇▇▇ Sachs Mortgage Servicer (the "Assignor") and the Servicer
have entered into the Flow Servicing Rights Purchase and Servicing Agreement
dated as of ________, 200_ (the "Servicing Agreement") pursuant to which the
Servicer sold certain mortgage loans listed on the Mortgage Loan Schedule
attached as an exhibit to the Servicing Agreement;
WHEREAS, the Assignor, the Depositor and the Servicer have entered into an
Assignment, Assumption and Recognition Agreement dated as of ________, 200_ (the
"GSMC Assignment Agreement"), pursuant to which the Assignor assigned its right
title and interest in and to the Mortgage Loans and the Servicing Agreement to
the Depositor;
WHEREAS, the Assignee has agreed on certain terms and conditions to
purchase from the Depositor certain mortgage loans (the "Mortgage Loans"), which
Mortgage Loans are subject to the provisions of the Servicing Agreement and are
listed on the mortgage loan schedule attached as Exhibit 1 hereto (the "Mortgage
Loan Schedule"); and
WHEREAS, pursuant to a Master Servicing and Trust Agreement, dated as of
_______, 200_ (together with the _______ 200_ Edition of the Standard Terms
thereto, the "Trust Agreement"), among _______________________, as depositor,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Servicer, as Assignor, _______________________, as master
servicer (the "Master Servicer"), _______________________, as guarantor (the
"Guarantor")_______________________, as Trustee (the "Trustee"), and
_______________________, as custodian (the "Custodian"), the Depositor will
transfer the Mortgage Loans to the Trustee on behalf of the Assignee, together
with the Depositor's rights in the Servicing Agreement.
NOW THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Assignment and Assumption.
The Depositor hereby assigns to the Assignee, as of the date hereof, all
of its right, title and interest in and to the Mortgage Loans and the Servicing
Agreement, to the extent relating to the Mortgage Loans, and the Assignee hereby
assumes all of the Depositor's obligations under the Servicing Agreement, to the
extent relating to the Mortgage Loans from and after ________, 200_; the
Servicer hereby acknowledges such assignment and assumption and hereby agrees to
the release of the Depositor from any obligations under the Servicing Agreement
from and after _____, 200_, to the extent relating to the Mortgage Loans.
The Depositor represents and warrants to the Assignee that the Depositor
has not taken any action which would serve to impair or encumber the Depositor's
ownership interest in the Mortgage Loans since the date of the Servicing
Agreement.
The Servicer and the Depositor shall have the right to amend, modify or
terminate the Servicing Agreement without the joinder of the Assignee with
respect to mortgage loans not conveyed to the Assignee hereunder; provided,
however, that such amendment, modification or termination shall not affect or be
binding on the Assignee.
2. Accuracy of the Servicing Agreement.
The Servicer and the Depositor represent and warrant to the Assignee that
(i) attached hereto as Exhibit 2 is a true, accurate and complete copy of the
Servicing Agreement, (ii) the Servicing Agreement is in full force and effect as
of the date hereof, (iii) the Servicing Agreement has not been amended or
modified in any respect, other than by the amendments described in the recitals
hereto and appended to such Servicing Agreement and (iv) no notice of
termination has been given to the Servicer under the Servicing Agreement. The
Servicer, in its capacity as seller and/or servicer under the Servicing
Agreement, further represents and warrants that the representations and
warranties contained in Section 3.01 of the Servicing Agreement are true and
correct as of the Closing Date (as defined in the Trust Agreement).
3. Recognition of Assignee; Recognition of Master Servicer.
From and after the date hereof, the Servicer shall note the transfer of
the Mortgage Loans to the Assignee in its books and records, shall recognize the
Assignee as the owner of the Mortgage Loans and shall, subject to clause (b)
below, service the Mortgage Loans for the benefit of the Assignee pursuant to
the Servicing Agreement, the terms of which are incorporated herein by
reference. It is the intention of the Depositor, Servicer and the Assignee that
the Servicing Agreement shall be binding upon and inure to the benefit of the
Servicer and the Assignee and their successors and assigns.
The Servicer further acknowledges that, from and after the date hereof, it
(and any of its successors under the Servicing Agreement) will be subject to the
supervision of the Master Servicer (except that the Master Servicer shall not be
responsible for supervising the servicing of defaulted Mortgage Loans and REO
Properties) and that the Master Servicer, acting on behalf of the Trustee as the
owner of the Mortgage Loans, shall have the same rights as were assigned by the
Assignor, in its capacity as the original Owner under the Servicing Agreement,
to the Depositor under the GSMC Assignment Agreement, and further assigned by
the Depositor to the Trustee, on behalf of the Trust, hereunder. Such rights
will include, without limitation, the right to terminate the Servicer under the
Servicing Agreement upon the occurrence of an event of default thereunder, the
right to receive all remittances required to be made by the Servicer under the
Servicing Agreement, the right to receive all monthly reports and other data
required to be delivered by the Servicer under the Servicing Agreement,
indemnification rights and the right to exercise certain rights of consent and
approval relating to actions taken by the Servicer.
All reports, notices and other written information required to be
delivered to the Trustee, as the successor in interest to the Assignor and the
Depositor under the Servicing Agreement, shall also be delivered to the Master
Servicer at the address set forth in Section 10 hereof. All remittances required
to be made to the Trustee, as the successor in interest to the Assignor and the
Depositor under the Servicing Agreement, shall be made instead to the Master
Servicer by wire transfer to the following account:
____________________________
ABA# [ ]
For credit to: ________________
Account Number: [ ]
For further credit to: ________________ Collection Acct#
[ ]
4. Representations and Warranties of the Assignee. The Assignee hereby
represents and warrants to the Assignor as follows:
Decision to Purchase. The Assignee represents and warrants that it is a
sophisticated investor able to evaluate the risks and merits of the transactions
contemplated hereby, and that it has not relied in connection therewith upon any
statements or representations of the Depositor or the Servicer other than those
contained in the Servicing Agreement or this Agreement.
Authority. The Assignee hereto represents and warrants that it is duly and
legally authorized to enter into this Agreement and to perform its obligations
hereunder and under the Servicing Agreement.
Enforceability. The Assignee hereto represents and warrants that this
Agreement has been duly authorized, executed and delivered by it and (assuming
due authorization, execution and delivery thereof by each of the other parties
hereto) constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
5. Representations and Warranties of the Depositor. The Depositor hereby
represents and warrants to the Assignee as follows:
Organization. The Depositor has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the State
of New York with full power and authority (corporate and other) to enter into
and perform its obligations under the Servicing Agreement and this Agreement.
Enforceability. This Agreement has been duly executed and delivered by the
Depositor, and, assuming due authorization, execution and delivery by each of
the other parties hereto, constitutes a legal, valid, and binding agreement of
the Depositor, enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting creditors' rights generally and to general principles of equity
regardless of whether enforcement is sought in a proceeding in equity or at law.
No Consent. The execution, delivery and performance by the Depositor of
this Agreement and the consummation of the transactions contemplated thereby 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 such as has been
obtained, given, effected or taken prior to the date hereof.
Authorization; No Breach. The execution and delivery of this Agreement
have been duly authorized by all necessary corporate action on the part of the
Depositor; neither the execution and delivery by the Depositor of this
Agreement, nor the consummation by the Depositor of the transactions herein
contemplated, nor compliance by the Depositor with the provisions hereof, will
conflict with or result in a breach of, or constitute a default under, any of
the provisions of the governing documents of the Depositor or any law,
governmental rule or regulation or any material judgment, decree or order
binding on the Depositor or any of its properties, or any of the provisions of
any material indenture, mortgage, deed of trust, contract or other instrument to
which the Depositor is a party or by which it is bound.
Actions; Procedures. There are no actions, suits or proceedings pending
or, to the knowledge of the Depositor, threatened, before or by any court,
administrative agency, arbitrator or governmental body (A) with respect to any
of the transactions contemplated by this Agreement or (B) with respect to any
other matter that in the judgment of the Depositor will be determined adversely
to the Depositor and will if determined adversely to the Depositor materially
adversely affect its ability to perform its obligations under this Agreement.
Prior Assignments; Pledges. Except for the sale to the Assignee, the
Depositor has not assigned or pledged any Mortgage Note or the related Mortgage
or any interest or participation therein.
Releases. The Depositor has not satisfied, canceled, or subordinated in
whole or in part, or rescinded any Mortgage, and the Depositor has not released
any Mortgaged Property from the lien of the related Mortgage, in whole or in
part, nor has the Depositor executed an instrument that would effect any such
release, cancellation, subordination, or rescission.
It is understood and agreed that the representations and warranties set
forth in this Section 5 shall survive delivery of the respective Mortgage Files
to the Custodian and shall inure to the benefit of the Assignee and its assigns
notwithstanding any restrictive or qualified endorsement or assignment. Upon the
discovery by the Depositor, the Master Servicer or the Trustee of a breach of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice thereof to the other parties to this Agreement,
and in no event later than two (2) Business Days from the date of such
discovery. It is understood and agreed that the obligations of the Depositor set
forth in Section 6 to repurchase a Mortgage Loan constitute the sole remedies
available to the Assignee and its assigns on their behalf respecting a breach of
the representations and warranties contained in this Section 5.
It is understood and agreed that the Depositor has made no representations
or warranties to the Assignee other than those contained in this Section 5, and
no other affiliate of the Depositor has made any representations or warranties
of any kind to the Assignee.
6. Repurchase of Mortgage Loans.
Upon discovery or notice of any breach by the Depositor of any
representation, warranty, or covenant under this Agreement that materially and
adversely affects the value of any Mortgage Loan or the interest of the Assignee
therein (it being understood that any such defect or breach shall be deemed to
have materially and adversely affected the value of the related Mortgage Loan or
the interest of the Assignee therein if the Assignee incurs a loss as a result
of such defect or breach), the Assignee promptly shall request that the
Depositor cure such breach and, if the Depositor does not cure such breach in
all material respects within 60 days from the date on which it is notified of
the breach, the Assignee may enforce the Depositor's obligation hereunder to
purchase such Mortgage Loan from the Assignee. Notwithstanding the foregoing,
however, if such breach is a Qualification Defect, such cure or repurchase must
take place within 45 days of the discovery date of such defect.
Except as specifically set forth herein, the Depositor shall have no
responsibility to enforce any provision of this Agreement, to oversee compliance
hereof, or to take notice of any breach or default thereof.
7. Amendment of the Servicing Agreements.
In connection with the transfer of the Mortgage Loans hereunder, the
Servicer agrees that, from and after the date hereof, each Mortgage Loan
transferred hereunder will be subject to, and serviced under, the Servicing
Agreement under which the Mortgage Loans were originally transferred to the
Assignor. Notwithstanding anything to the contrary set forth herein, the amended
provisions shall apply only to the Mortgage Loans transferred hereunder and any
other mortgage loans subject to the Agreement shall continue to be serviced
under all of the existing provisions of the Servicing Agreement. For purposes of
this Section 7, capitalized terms used herein shall have the meanings assigned
to such terms in the Servicing Agreement. Each reference herein to "Agreement"
shall be understood as a reference to the Servicing Agreement and each reference
to "Servicer" shall be understood as a reference to the Servicer.
(a) Article I of the Servicing Agreement shall be amended as follows:
(i) by replacing the existing definition of "Guarantor" with
the following:
"Guarantor: With respect to the Reconstituted Mortgage Loans,
[______], in its capacity as guarantor of certain classes of
securities issued in connection with the securitization of such
Reconstituted Mortgage Loans."
(ii) by deleting the definition of "Stated Principal Balance"
in its entirety and restating it as follows: "For any Mortgage Loan
as of any Due Date subsequent to the cut-off date for the
Pass-Through Transfer up to and including, the date on which such
Mortgage Loan is finally liquidated or repurchased from the Trustee,
the scheduled principal balance thereof as of such cut-off date, as
reduced by (A) the principal portion of all Monthly Payments due on
or before such Due Date, to the extent actually paid by the related
Mortgagor or advanced by the Servicer, or the master servicer or
trustee with respect to the Pass-Through Transfer, net of any
portion thereof that represents principal due on a Due Date
occurring on or before the date on which such proceeds were
received, and (B) the principal portion of all Principal
Prepayments, including Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds and all payoffs received on or before the last
day of the Principal Prepayment Period preceding the applicable date
of determination."
(b) Section 2.06 of the Servicing Agreement shall be amended by changing
each reference to "Mortgage Loan" or "Mortgage Loans" to "Reconstituted Mortgage
Loan" or "Reconstituted Mortgage Loans."
8. Continuing Effect.
Except as contemplated hereby, the Servicing Agreement shall remain in
full force and effect in accordance with their respective terms.
9. Governing Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF).
EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR
ANY OTHER DOCUMENTS AND INSTRUMENTS EXECUTED IN CONNECTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
ACTIONS OF SUCH PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES
TO ENTER INTO THIS AGREEMENT.
10. Notices.
Any notices or other communications permitted or required hereunder or
under the Servicing Agreement shall be in writing and shall be deemed
conclusively to have been given if personally delivered at or mailed by
registered mail, postage prepaid, and return receipt requested or transmitted by
telex, telegraph or telecopier and confirmed by a similar mailed writing, to:
(a) in the case of the Servicer,
[[ ]]
With a copy to:
[[ ]]
or such address as may hereafter be furnished by the Servicer;
(b) in the case of the Assignee,
[[ ]]
or such other address as may hereafter be furnished by the Assignee,
(c) in the case of the Depositor,
[[ ]]
With a copy to:
[[ ]]
or such other address as may hereafter be furnished by the Depositor,
(d) in the case of the Master Servicer,
[[ ]]
or such other address as may hereafter be furnished by the Master
Servicer.
11. Counterparts.
This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same instrument.
12. Definitions.
Any capitalized term used but not defined in this Agreement has the
meaning assigned thereto in the Servicing Agreement.
Exh. 11-9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
ASSIGNEE:
[ ]
By: [ ],
not in its individual capacity but solely
as Trustee
By:_______________________________________
Name:
Title:
DEPOSITOR:
[ ]
By:_________________________________________
Name:
Title:
Acknowledged by:
SERVICER:
________________________________________
By:_____________________________________
Name:
Title:
MASTER SERVICER:
[ ]
By:_____________________________________
Name:
Title:
EXHIBIT 1
Mortgage Loan Schedule
EXHIBIT 2
Servicing Agreement
EXHIBIT 12
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
THAT _____________, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF
THE STATE OF _____, AND HAVING ITS PRINCIPAL OFFICE LOCATED AT _____________, IN
THE CITY OF _______, STATE OF _____, HATH MADE, CONSTITUTED AND APPOINTED, AND
DOES BY THESE PRESENTATIONS MAKE, CONSTITUTE AND APPOINT [ ], A CORPORATION
ORGANIZED AND EXISTING UNDER THE LAWS OF [ ], ITS TRUE AND LAWFUL
ATTORNEY-IN-FACT, WITH FULL POWER AND AUTHORITY HEREBY CONFERRED IN ITS NAME,
PLACE AND STEAD AND FOR ITS USE AND BENEFIT, TO MAKE, SIGN, EXECUTE,
ACKNOWLEDGE, DELIVER, FILE FOR RECORD, AND RECORD ANY INSTRUMENT ON ITS BEHALF
AND TO PERFORM SUCH OTHER ACT OR ACTS AS MAY BE CUSTOMARILY AND REASONABLY
NECESSARY AND APPROPRIATE TO EFFECTUATE THE FOLLOWING ENUMERATED TRANSACTIONS IN
RESPECT OF ANY OF THE MORTGAGES OR DEEDS OF TRUST (THE "MORTGAGE" AND THE "DEED
OF TRUST", RESPECTIVELY) FOR WHICH THE RELATED SERVICING RIGHTS ARE TO BE SOLD
AND TRANSFERRED BY THE UNDERSIGNED TO [ ].
THIS APPOINTMENT SHALL APPLY TO THE FOLLOWING ENUMERATED TRANSACTIONS ONLY:
1. THE MODIFICATION OR RE-RECORDING OF A MORTGAGE OR DEED OF TRUST, WHERE SAID
MODIFICATION OR RE-RECORDING IS FOR THE PURPOSE OF CORRECTING THE MORTGAGE OR
DEED OF TRUST TO CONFORM SAME TO THE ORIGINAL INTENT OF THE PARTIES THERETO OR
TO CORRECT TITLE ERRORS DISCOVERED AFTER SUCH TITLE INSURANCE WAS ISSUED AND
SAID MODIFICATION OR RE-RECORDING, IN EITHER INSTANCE, DOES NOT ADVERSELY AFFECT
THE LIEN OF THE MORTGAGE OR DEED OF TRUST AS INSURED.
2. THE SUBORDINATION OF THE LIEN OF A MORTGAGE OR DEED OF TRUST TO AN EASEMENT
IN FAVOR OF A PUBLIC UTILITY INVESTOR OR A GOVERNMENTAL AGENCY OR UNIT WITH
POWERS OF EMINENT DOMAIN (THIS SECTION, SHALL INCLUDE THE EXECUTION OF PARTIAL
SATISFACTION/RELEASES, PARTIAL RECONVEYANCES OR THE EXECUTION OF REQUESTS TO
TRUSTEES TO ACCOMPLISH SAME).
3. WITH RESPECT TO A MORTGAGE OR DEED OF TRUST, THE FORECLOSURE, COMPLETION OF
JUDICIAL OR NON-JUDICIAL FORECLOSURE OR TERMINATION, CANCELLATION OR RESCISSION
OF ANY SUCH FORECLOSURE, INCLUDING, WITHOUT LIMITATION, ANY AND ALL OF THE
FOLLOWING ACTS: (i) THE SUBSTITUTION OF TRUSTEE(S) SERVING UNDER A DEED OF TRUST
IN ACCORDANCE WITH STATE LAW AND THE DEED OF TRUST; (ii) STATEMENTS OF BREACH OR
NON-PERFORMANCE; (iii) NOTICES OF DEFAULT; (iv) NOTICES OF SALES; (v)
CANCELLATIONS/RESCISSIONS OF NOTICES OF DEFAULT AND/OR NOTICES OF SALE; (vi) THE
TAKING A FA DEED IN LIEU OF FORECLOSURE; (vii) THE ACCEPTANCE OF A SHORT PAYOFF
IN LIEU OF FORECLOSURE, AND (viii) SUCH OTHER DOCUMENTS AS MAY BE NECESSARY
UNDER THE TERMS OF THE MORTGAGE, DEED OF TRUST OR STATE LAW TO EXPEDITIOUSLY
COMPLETE SAID TRANSACTIONS.
4. THE CONVEYANCE OF THE PROPERTIES TO THE MORTGAGE INSURER, OR THE CLOSING OF
THE TITLE TO THE PROPERTY TO BE ACQUIRED AS REAL ESTATE OWNED, OR CONVEYANCE OF
TITLE TO REAL ESTATE OWNED.
5. THE COMPLETION OF LOAN ASSUMPTION AGREEMENTS.
6. THE FULL SATISFACTION/RELEASE OF A MORTGAGE OR DEED OF TRUST OR FULL
RECONVEYANCES UPON PAYMENT AND DISCHARGE OF ALL SUMS SECURED THEREBY INCLUDING
WITHOUT LIMITATION CANCELLATION OF THE RELATED MORTGAGE NOTE.
7. THE FULL ASSIGNMENT OF A MORTGAGE OR DEED OF TRUST UPON PAYMENT AND DISCHARGE
OF ALL SUMS SECURED THEREBY IN CONJUNCTION WITH THE REFINANCING THEREOF,
INCLUDING WITHOUT LIMITATION THE ASSIGNMENT OF THE RELATED MORTGAGE NOTE.
8. TO RECEIVE, ENDORSE, CASH OR DEPOSIT CHECKS OR OTHER ORDERS OF PAYMENT,
PAYABLE TO THE ORDER OF ________, AND TO SIGN ITS NAME, PLACE AND STEAD ANY
DOCUMENT WHATSOEVER NECESSARY UNDER LAW TO CARRY OUT THE TRANSACTIONS
CONTEMPLATED BY THE AGREEMENT AND ONLY WITH RESPECT TO THOSE LOANS WHOSE
SERVICING RIGHTS WERE SOLD AND TRANSFERRED PURSUANT TO THE TERMS OF THE
AGREEMENT.
THE UNDERSIGNED GIVES TO SAID ATTORNEY-IN-FACT FULL POWER AND AUTHORITY TO
EXECUTE SUCH INSTRUMENTS AND TO DO AND PERFORM ALL AND EVERY ACT AND THING
NECESSARY AND PROPER TO CARRY INTO EFFECT THE POWER OR POWERS GRANTED BY OR
UNDER THIS LIMITED POWER OF ATTORNEY AS FULLY AS THE UNDERSIGNED MIGHT OR COULD
DO, AND HEREBY DOES RATIFY AND CONFIRM TO ALL THAT SAID ATTORNEY-IN-FACT SHALL
LAWFULLY DO OR CAUSE TO BE DONE BY AUTHORITY HEREOF.
THIRD PARTIES WITHOUT ACTUAL NOTICE MAY RELY UPON THE EXERCISE OF THE POWER
GRANTED UNDER THIS LIMITED POWER OF ATTORNEY; AND MAY BE SATISFIED THAT THIS
LIMITED POWER OF ATTORNEY SHALL CONTINUE IN FULL FORCE AND EFFECT AND HAS NOT
BEEN REVOKED UNLESS AN INSTRUMENT OF REVOCATION HAS BEEN MADE IN WRITING BY THE
UNDERSIGNED. THIS LIMITED POWER OF ATTORNEY IS GRANTED AS OF __________, 2004.
WITNESS:
________________________________________________________________________________
VICE PRESIDENT
________________________________________________________________________________
ASST. SECRETARY
STATE OF __________________)
___________________________) SS
COUNTY OF _________________)
ON ________________, 2004, BEFORE ME, A NOTARY IN AND FOR THE COUNTY OF
_____________________, STATE OF ________________, PERSONALLY APPEARED
__________________ AND ___________________ PERSONALLY KNOWN TO ME (OR PROVED TO
ME ON THE BASIS OF SATISFACTORY EVIDENCE) TO BE THE PERSON(S) WHOSE NAME(S)
IS/ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGEMENT TO ME THAT
HE/SHE/THEY EXECUTED THE SAME IN HIS/HER/THEIR AUTHORIZED CAPACITY(IES) AS
___________________ AND ______________________ OF ______________, AND THAT BY
HIS/HER/THEIR SIGNATURE(S) ON THE INSTRUMENT THE PERSON(S) OR THE ENTITY UPON
BEHALF OF WHICH THE PERSON(S) ACTED, EXECUTED THE INSTRUMENT.
WITNESS MY HAND AND OFFICIAL SEAL.
___________________________________
SIGNATURE
___________________________________
TYPE OR PRINT NAME
___________________________________
MY COMMISSION EXPIRES
EXHIBIT 13
FORM OF ANNUAL CERTIFICATION
Re: [_______________] (the "Trust"), Mortgage Pass-Through
Certificates, Series [_____], issued pursuant to the [Pooling
and Servicing][Trust] Agreement, dated as of [_____], 2004
(the "Operative Agreement"), among [_____], as depositor (the
"Depositor"), [_____], as trustee (the "Trustee"), [_____], as
servicer (the "Servicer"), and [_____], as responsible party
I, [identify the certifying individual], certify to _____________,
and its officers, directors and affiliates, and with the knowledge and
intent that they will rely upon this certification, that:
(i) The information relating to the Mortgage Loans and the servicing
thereof submitted by the Servicer to the ___________ which is used in
connection with preparation of the reports on Form 8-K and the annual
report on Form 10-K filed with the Securities and Exchange Commission with
respect to each transaction listed on the attached Exhibit A, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as
of the date of this certification;
(ii) The servicing information required to be provided to the
_____________ by the Servicer under the relevant servicing agreements has
been provided to the _________;
(iii) I am responsible for reviewing the activities performed by the
Servicer under the relevant servicing agreements and based upon the review
required by the relevant servicing agreements, and except as disclosed in
the Annual Statement of Compliance, the Annual Independent Public
Accountant's Servicing Report and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans submitted to the ___________, the Servicer has, as of the
date of this certification fulfilled its obligations under the relevant
servicing agreements; and
(iv) I have disclosed all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards for purposes of
the report provided by an independent public accountant, after conducting
a review conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar procedure, as set forth in the
Pooling and Servicing Agreement, have been disclosed to such accountant
and are included in such report; and
(vi) The Servicer shall indemnify and hold harmless the entity
required to provide the certification to the Securities and Exchange
Commission pursuant to the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the
regulations issued thereunder, and their respective officers, directors,
agents and affiliates from and against any losses, damages, penalties,
fines, forfeitures, reasonable legal fees and expenses and related costs,
judgments and other costs and expenses arising out of or based upon a
breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Certification or any material
misstatement or omission, negligence, bad faith or willful misconduct of
the Servicer in connection therewith. If the indemnification provided for
herein is unavailable or insufficient to hold harmless any indemnified
party, then the Servicer agrees that it shall contribute to the amount
paid or payable by the such indemnified party as a result of the losses,
claims, damages or liabilities of such indemnified party in such
proportion as is appropriate to reflect the relative fault of such
indemnified party on the one hand and the Servicer on the other in
connection with a breach of the Servicer's obligations under this
Certification or any material misstatement or omission, negligence, bad
faith or willful misconduct of the Servicer in connection therewith.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Servicer.
Dated: ____________________ By: ____________________________
Name: __________________________
Title: _________________________
EXHIBIT P
FORM OF MASTER LOAN PURCHASE AGREEMENT, BETWEEN VARIOUS SELLERS AND ▇▇▇▇▇▇▇
SACHS MORTGAGE COMPANY
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
----------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,
Purchaser
______________________________,
Seller
______________________
Dated as of ____________, 200_
Conventional,
Adjustable and Fixed Rate, Subprime Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
Subsection 6.01 Conveyance of Mortgage Loans...........................
Subsection 6.02 Books and Records......................................
Subsection 6.03 Delivery of Mortgage Loan Documents....................
Subsection 6.04 Quality Control Procedures.............................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................
Subsection 9.01 Representations and Warranties Regarding the Seller....
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.........................................
Subsection 9.03 Remedies for Breach of Representations and Warranties..
Subsection 9.04 [Repurchase of Mortgage Loans With Early
Payment Defaults.......................................
Subsection 9.05 [Repurchase of Certain Mortgage Loans That
Prepay in Full.........................................
Subsection 9.06 Purchaser's Right to Review............................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
Subsection 14.01 Additional Indemnification by the Seller;
Third Party Claims.....................................
Subsection 14.02 Merger or Consolidation of the Seller..................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C MORTGAGE LOAN SCHEDULE FIELDS
EXHIBIT D MORTGAGE LOAN SCHEDULE
EXHIBIT E FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT F FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT G FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT H FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT I UNDERWRITING GUIDELINES
EXHIBIT J REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT K SERVICER ACKNOWLEDGMENT
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
-----------------------------------------------
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT, dated as of
_________, 200_ ("Agreement"), by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, a
New York limited partnership, having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (the "Purchaser") and [SELLER], a __________ [corporation], having an
office at _______________________________________ (the "Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain first [and second] lien,
adjustable and fixed rate, subprime residential mortgage loans (the "Mortgage
Loans") on a servicing released basis as described herein, and which shall be
delivered as a pool of whole loans on the date as provided herein (the "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first [and second] lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, servicing by the Servicer and control of the Mortgage Loans;
and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1 Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: A Mortgage Loan purchased pursuant to
this Agreement the Mortgage Interest Rate of which is adjusted from time to time
in accordance with the terms of the related Mortgage Note.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A ▇▇▇▇▇▇ Mae Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association, or any successor thereto.
Appraised Value: (i) With respect to any First Lien Loan, the value
of the related Mortgaged Property based upon the appraisal made for the
originator at the time of origination of the Mortgage Loan or the sales price of
the Mortgaged Property at such time of origination, whichever is less; provided,
however, that in the case of a refinanced Mortgage Loan, such value is based
solely upon the appraisal made at the time of origination of such refinanced
Mortgage Loan[, and (ii) with respect to any Second Lien Loan, the value,
determined pursuant to the Underwriting Guidelines, of the related Mortgaged
Property as of the origination of the Second Lien Loan].
[Appropriate Federal Banking Agency: As defined in Section 1813(q)
of Title 12 of the United States Code, as amended from time to time.]
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Business Day: Any day other than (i) a Saturday or Sunday or (ii) a
day on which banking and savings and loan institutions in (a) the State of New
York, (b) the state in which the Servicer's servicing operations are located or
(c) the State in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: __________, 200_, or such other date as is mutually
agreed upon by the parties.
[CLTV: As of the date of origination and as to any Second Lien Loan,
the ratio, expressed as a percentage, of the (a) sum of (i) the outstanding
principal balance of the Second Lien Loan as of the date of origination and (ii)
the outstanding principal balance as of the date of origination of any mortgage
loan or mortgage loans that are senior or equal in priority to the Second Lien
Loan and which are secured by the same Mortgaged Property to (b) the Appraised
Value.]
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the Credit File pursuant to this Agreement.
Current CLTV: As of any date and as to any Second Lien Loan, the
ratio, expressed as a percentage, of the (a) sum of (i) the outstanding
principal balance of the Second Lien Loan as of such date and (ii) the
outstanding principal balance as of such date of any mortgage loan or mortgage
loans that are senior or equal in priority to the Second Lien Loan and which are
secured by the same Mortgaged Property to (b) the Appraised Value.
Custodial Account: The separate account or accounts created and
maintained pursuant to the Servicing Agreement (with respect to each Mortgage
Loan, for an interim period, as specified therein).
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents.
Custodian: Deutsche Bank National Trust Company, or any successor
thereto under the Custodial Agreement.
Cut-off Date: _________, 200_.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Servicer, a copy of which is attached
to the Servicing Agreement.
Determination Date: The date specified in the Servicing Agreement
(with respect to each Mortgage Loan, for an interim period, as specified
therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Eligible Account: Any of (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term unsecured
debt obligations of which (or, in the case of a depository institution or trust
company that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated A-1 by Standard & Poor's or
Prime-1 by Moody's (or a comparable rating if another Rating Agency is specified
by the Purchaser by written notice to the Seller) at the time any amounts are
held on deposit therein, (ii) an account or accounts the deposits in which are
fully insured by the FDIC, or (iii) a trust account or accounts maintained with
a federal or state chartered depository institution or trust company acting in
its fiduciary capacity.
Escrow Account: The separate account or accounts created and
maintained pursuant to the Servicing Agreement (with respect to each Mortgage
Loan, for an interim period, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
▇▇▇▇▇▇ Mae: ▇▇▇▇▇▇ ▇▇▇, or any successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ Selling Guide and the ▇▇▇▇▇▇ Mae
Servicing Guide and all amendments or additions thereto.
▇▇▇▇▇▇ ▇▇▇ Transfer: As defined in Section 13 hereof.
FDIC: Federal Deposit Insurance Corporation, or any successor
thereto.
[First Lien Loan: Any Mortgage Loan secured by a first lien Mortgage
on the related Mortgaged Property.]
Fitch: Fitch, Inc., or any successor thereto.
FHA: The Federal Housing Administration, an agency within HUD, and
its successors in interest, and including the Federal Housing Commissioner and
the Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the National Housing Act, and applicable HUD
regulations, and eligible to own and service mortgage loans such as the FHA
insured mortgage loans.
FHA Regulations: Regulations promulgated by HUD under the National
Housing Act, codified in 24 Code of Federal Regulations, and other HUD issuances
relating to FHA insured mortgage loans, including the related handbooks,
circular, notices and mortgagee letters.
First Lien Loan: Any Mortgage Loan secured by a first lien Mortgage
on the related Mortgaged Property.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac, or any successor thereto.
▇▇▇▇▇▇▇ Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum set forth on the Mortgage Loan Schedule.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
[Insured Depository Institution: As defined in Section 1813(c)(2) of
Title 12 of the United States Code, as amended from time to time.]
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
[Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.]
[Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.]
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the
Appraised Value of the Mortgaged Property.
[MERS: MERSCORP, Inc., its successors and assigns.]
[MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Custodian as the Investor on the MERS(R)
System.]
[MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.]
[MERS Report: The report from the MERS System listing MERS
Designated Mortgage Loans and other information.]
[MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.]
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and its successors in
interest.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first [or second] lien on an unsubordinated
estate in fee simple in real property securing the Mortgage Note; except that
with respect to real property located in jurisdictions in which the use of
leasehold estates for residential properties is a widely-accepted practice, the
mortgage, deed of trust or other instrument securing the Mortgage Note may
secure and create a first [or second] lien upon a leasehold estate of the
Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights, Prepayment Penalties, and all
other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan, excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Section 6.03 hereof with respect to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans, a copy of
which will be attached hereto as Exhibit D setting forth the information
attached hereto as Exhibit C.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Interest Rate: With respect to any Mortgage Loan, the
Mortgage Interest Rate minus the Servicing Fee Rate.
OCC: Office of the Comptroller of the Currency, and its successors
in interest.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any master
servicer of the Mortgage Loans as an officer, employee, director or person
performing similar functions.
OTS: Office of Thrift Supervision, and its successors in interest.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase or decrease on
an Interest Rate Adjustment Date above or below the Mortgage Interest Rate
previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
[PMI Policy: A policy of primary mortgage guaranty insurance issued
by a Qualified Insurer.]
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain letter agreement
setting forth the general terms and conditions of the transaction consummated
herein and identifying the Mortgage Loans to be purchased hereunder, by and
between the Seller and the Purchaser.
Purchaser: ▇▇▇▇▇▇▇ Sachs Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, and any successor to
the Purchaser under this Agreement as herein provided.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by ▇▇▇▇▇▇
▇▇▇ and ▇▇▇▇▇▇▇ Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by A.M. Best's with respect
to hazard and flood insurance (or such other rating as may be required by a
Rating Agency in connection with a Securitization Transfer in order to achieve
the desired ratings for the securities to be issued in connection with such
Securitization Transfer).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than, and not more than 1% greater than, the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than, and not more than one year less than, that of the
Deleted Mortgage Loan (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Periodic Rate Cap, Index and lien
priority); and (v) comply with each representation and warranty (respecting
individual Mortgage Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer of a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transfer.
Reconstitution Date: As defined in Section 13.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Servicing Agreement (with
respect to each Mortgage Loan, as specified therein).
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement or the Servicing
Agreement is found, a price equal to the then outstanding principal balance of
the Mortgage Loan to be repurchased, plus accrued interest thereon at the
Mortgage Interest Rate from the date on which interest had last been paid
through the date of such repurchase, plus the amount of any outstanding advances
owed to any servicer, and plus all costs and expenses incurred by the Purchaser
or any servicer arising out of or based upon such breach, including without
limitation, (i) costs and expenses incurred in the enforcement of the Seller's
repurchase obligation hereunder and (ii) any costs and damages incurred by the
Purchaser in connection with any violation by such Mortgage Loan of any
predatory lending law or abusive lending law.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
[Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.]
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: ______________________, a _______ [corporation] and its
successors in interest.
Servicer: The servicer named in the Servicing Agreement, and its
successors in interest, or any successor to such servicer under the Servicing
Agreement, as therein provided.
Servicing Agreement: The agreement to be entered into by the
Purchaser and the Servicer, providing for the Servicer to service the Mortgage
Loans as specified by the Servicing Agreement.
Servicing Fee: With respect to each Mortgage Loan subject to the
Servicing Agreement, a fee payable monthly equal to one-twelfth of the product
of (a) the Servicing Fee Rate and (b) the outstanding principal balance of such
Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated for any
portion of a month during which the Mortgage Loan is serviced by the Servicer
under the Servicing Agreement. The obligation of the Purchaser to pay the
Servicing Fee is limited to, and the Servicing Fee is payable solely from, the
interest portion (including recoveries with respect to interest from Liquidation
Proceeds, Condemnation Proceeds and Insurance Proceeds, to the extent permitted
by this Agreement) of such Monthly Payment collected by the Servicer, or as
otherwise provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans but not including any
Prepayment Penalties; (d) all agreements or documents creating, defining or
evidencing any such servicing rights to the extent they relate to such servicing
rights and all rights of the Seller thereunder; (e) Escrow Payments or other
similar payments with respect to the Mortgage Loans and any amounts actually
collected by the Seller with respect thereto; (f) all accounts and other rights
to payment related to any of the property described in this paragraph; and (g)
any and all documents, files, records, servicing files, servicing documents,
servicing records, data tapes, computer records, or other information pertaining
to the Mortgage Loans or pertaining to the past, present or prospective
servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and its successors in interest.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Successor Servicer: A servicer designated by the Purchaser pursuant
to Section 9.03 which is entitled to the benefits of the indemnifications set
forth in such Section and Section 14.01.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans, and the Seller shall cease all servicing
responsibilities. Such date shall occur on the day indicated by the Purchaser to
the Seller in accordance with the Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached hereto as Exhibit I.
VA Approved Lender: A lender which is approved by the VA to act as a
lender in connection with the origination of VA guaranteed mortgage loans.
[Well Capitalized: With respect to any Insured Depository
Institution, the maintenance by such Insured Depository Institution of capital
ratios at or above the required minimum levels for such capital category under
the regulations promulgated pursuant to Section 1831(o) of the United States
Code, as amended from time to time, by the Appropriate Federal Banking Agency
for such institution, as such regulation may be amended from time to time.]
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the Closing Date.
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Schedule").
The Seller shall deliver the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on the Closing Date to the Purchaser at least two (2)
Business Days prior to the Closing Date. The Mortgage Loan Schedule shall be the
Preliminary Mortgage Schedule with those Mortgage Loans which have not been
funded prior to the Closing Date deleted. The Mortgage Loan Schedule shall be
attached hereto as Exhibit D.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the aggregate principal balance, as of the
Cut-off Date, of the Mortgage Loans, after application of scheduled payments of
principal due on or before the Cut-off Date, to the extent such payments were
actually received. The initial principal amount of the Mortgage Loans shall be
the aggregate principal balance of the Mortgage Loans, so computed as of the
Cut-off Date. If so provided in the Purchase Price and Terms Agreement, portions
of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the Cut-off Date at the weighted
average Net Mortgage Interest Rate of those Mortgage Loans from the date through
which interest on the Mortgage Loan has been paid through (the "Paid-Through
Date") through the day prior to the Closing Date, inclusive. The Purchase Price
plus accrued interest as set forth in the preceding paragraph shall be paid to
the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected on or
after the Cut-off Date, and (3) all payments of interest on the Mortgage Loans
net of applicable Servicing Fees (minus that portion of any such payment which
is allocable to the period prior to the Cut-off Date). The outstanding principal
balance of each Mortgage Loan as of the Cut-off Date is determined after
application of payments of principal due on or before the Cut-off Date, to the
extent actually collected, together with any unscheduled principal prepayments
collected prior to the Cut-off Date; provided, however, that payments of
scheduled principal and interest paid prior to the Cut-off date, but to be
applied on a due date beyond the Cut-off Date shall not be applied to the
principal balance as of the Cut-off Date. Such prepaid amounts shall be the
property of the Purchaser. The Seller shall deposit any such prepaid amounts
into the Custodial Account, which account is established for the benefit of the
Purchaser for subsequent remittance by the Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the Closing Date, the
Seller shall (i) either (a) deliver to the Purchaser or its designee in escrow,
for examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage [(except with
respect to each MERS Designated Mortgage Loan )], pertaining to each Mortgage
Loan, or (b) make the related Mortgage File available to the Purchaser for
examination at such other location as shall otherwise be acceptable to the
Purchaser and (ii) deliver to the Purchaser copies of the Servicing Files and
Credit Files. Such examination of the Mortgage Files may be made by the
Purchaser or its designee at any reasonable time before or after the Closing
Date. If the Purchaser makes such examination prior to the Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
Mortgage Loan Schedule, and may be replaced by a Qualified Substitute Mortgage
Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its option
and without notice to the Seller, purchase some or all of the Mortgage Loans
without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files or the Credit Files shall not impair
in any way the Purchaser's (or any of its successor's) rights to demand
repurchase, substitution or other remedy as provided in this Agreement. In the
event that the Seller fails to deliver the Credit Files with respect to any
Mortgage Loan, the Seller shall, upon the request of the Purchaser, repurchase
such Mortgage Loan as the price and in the manner specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all
right, title and interest of the Seller in and to the Mortgage Loans and the
Mortgage Files and all rights and obligations arising under the documents
contained therein. The Seller shall cause the Servicing File retained by the
Servicer pursuant to this Agreement to be appropriately identified in the
Servicer's computer system and/or books and records, as appropriate, to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The Seller shall
cause the Servicer to release from its custody the contents of any Servicing
File retained by it only in accordance with this Agreement or the Servicing
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of the Seller, an Affiliate of the Seller, the Purchaser or one or more
designees of the Purchaser, as the Purchaser shall select. Notwithstanding the
foregoing, each Mortgage and related Mortgage Note shall be possessed solely by
the Purchaser or the appropriate designee of the Purchaser, as the case may be.
All rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller after the Cut-off Date on or in connection with a
Mortgage Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with a
Mortgage Loan shall be received and held by the Seller in trust for the benefit
of the Purchaser or the appropriate designee of the Purchaser, as the case may
be, as the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall or shall cause the Servicer to be responsible for
maintaining, and shall maintain, a complete set of books and records for each
Mortgage Loan which shall be marked clearly to reflect the ownership of each
Mortgage Loan by the Purchaser. In particular, the Seller shall or shall cause
the Servicer to maintain in its possession, available for inspection by the
Purchaser, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the National Flood Insurance Act of 1968, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the ▇▇▇▇▇▇ Mae Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller or the
Servicer may be in the form of microfilm or microfiche so long as the Seller or
the Servicer complies with the requirements of the ▇▇▇▇▇▇ ▇▇▇ Guides.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
ten (10) Business Days prior to the Closing Date those documents and instruments
in the Mortgage File for each Mortgage Loan that are required to be delivered to
the Custodian pursuant to the Custodial Agreement.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
Closing Date, as evidenced by the certification and trust receipt of the
Custodian in the form annexed to the Custodial Agreement. The Seller shall
comply with the terms of the Custodial Agreement and the Purchaser shall pay all
fees and expenses of the Custodian from and after the Closing Date.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event any document required to be delivered to the Custodian
pursuant to the preceding paragraph, including an original or copy of any
document submitted for recordation to the appropriate public recording office,
is not so delivered to the Custodian, or to such other Person as the Purchaser
shall designate in writing, within 90 days following the Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank on or prior to the Closing Date and recorded subsequently by
the Purchaser or its designee), and in the event that the Seller does not cure
such failure within 30 days of discovery or receipt of written notification of
such failure from the Purchaser, the related Mortgage Loan shall, upon the
request of the Purchaser, be repurchased by the Seller at the price and in the
manner specified in Subsection 9.03. The foregoing repurchase obligation shall
not apply in the event that the Seller cannot deliver such original or copy of
any document submitted for recordation to the appropriate public recording
office within the specified period due to a delay caused by the recording office
in the applicable jurisdiction, provided that (i) the Seller shall deliver a
recording receipt of such recording office or, if such recording receipt is not
available, an officer's certificate of a servicing officer of the Seller,
confirming that such documents have been accepted for recording (upon request of
the Purchaser and delivery by the Purchaser to the Seller of a schedule of the
related Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or
its designee said officer's certificate relating to the related Mortgage Loans),
and (ii) such document is delivered within twelve (12) months of the Closing
Date.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Servicer to, have an internal
quality control program that verifies in a manner consistent with accepted
industry procedures, on a regular basis, the existence and accuracy of the legal
documents, credit documents, property appraisals, and underwriting decisions.
The program shall include evaluating and monitoring the overall quality of the
Seller's loan production and the servicing activities of the Seller. The program
is to ensure that the Mortgage Loans are originated and serviced in accordance
with Accepted Servicing Practices and the Underwriting Guidelines, guard against
dishonest, fraudulent, or negligent acts; and guard against errors and omissions
by officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to and upon the terms and conditions of this
Agreement, the Seller hereby sells, transfers, assigns, conveys and delivers to
the Purchaser the Servicing Rights.
The Purchaser shall retain the Servicer as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions contained in the Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein). The Purchaser and
Servicer shall execute the Servicing Agreement on the Closing Date. Pursuant to
the Servicing Agreement, the Servicer shall begin servicing the Mortgage Loans
on behalf of the Purchaser and shall be entitled to the Servicing Fee with
respect to such Mortgage Loans from the Closing Date until the termination of
the Servicing Agreement as set forth therein.
SECTION 8. Transfer of Servicing.
On the Transfer Date, the Purchaser, or its designee, shall assume
all servicing responsibilities related to, and the Seller shall cease all
servicing responsibilities related to the Mortgage Loans. The Transfer Date
shall be the date determined in accordance with the Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein).
On or prior to the Transfer Date, the Seller shall, at its sole cost
and expense, take such steps as may be necessary or appropriate to effectuate
and evidence the transfer of the servicing of the related Mortgage Loans to the
Purchaser, or its designee, including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Seller shall provide the Purchaser with copies of
all such related notices no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall transmit to the applicable taxing authorities and insurance companies
(including primary mortgage insurance policy insurers, if applicable) and/or
agents, notification of the transfer of the servicing to the Purchaser, or its
designee, and instructions to deliver all notices, tax bills and insurance
statements, as the case may be, to the Purchaser from and after the Transfer
Date. The Seller shall provide the Purchaser with copies of all such notices no
later than the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in the
Seller's possession relating to each related Mortgage Loan including the
information enumerated in the Servicing Agreement (with respect to each such
Mortgage Loan, for an interim period, as specified therein).
(d) Escrow Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Seller shall provide the Purchaser with an
accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Seller shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Seller.
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Seller on the related Mortgage Loans from the related Cut-off
Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Seller on each related Mortgage Loan
shall be properly applied by the Seller to the account of the particular
Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail on the date of receipt.
The Seller shall notify the Purchaser of the particulars of the payment, which
notification requirement shall be satisfied if the Seller forwards with its
payment sufficient information to permit appropriate processing of the payment
by the Purchaser. The Seller shall assume full responsibility for the necessary
and appropriate legal application of such Monthly Payments received by the
Seller after the Transfer Date with respect to related Mortgage Loans then in
foreclosure or bankruptcy; provided, for purposes of this Agreement, necessary
and appropriate legal application of such Monthly Payments shall include, but
not be limited to, endorsement of a Monthly Payment to the Purchaser with the
particulars of the payment such as the account number, dollar amount, date
received and any special Mortgagor application instructions and the Seller shall
comply with the foregoing requirements with respect to all Monthly Payments
received by the it after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the Transfer Date and discovered after the
Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall be liable for the amount of such shortage. The Seller
shall reimburse the Purchaser for the amount of such shortage within
thirty (30) days after receipt of written demand therefor from the
Purchaser;
(4) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall file all IRS Forms 1099, 1099A, 1098
or 1041 and K-1 which are required to be filed on or before the Transfer Date in
relation to the servicing and ownership of the related Mortgage Loans. The
Seller shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to the Seller's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in
good standing in each state wherein it owns or leases any material properties or
where a Mortgaged Property is located, if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
the Seller, and in any event the Seller is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the related
Mortgage Loan in accordance with the terms of this Agreement; the Seller has the
full corporate power, authority and legal right to hold, transfer and convey the
Mortgage Loans and to execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and constitute the
valid, legal, binding and enforceable obligations of the Seller, regardless of
whether such enforcement is sought in a proceeding in equity or at law; and all
requisite corporate action has been taken by the Seller to make this Agreement
and all agreements contemplated hereby valid and binding upon the Seller in
accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Seller of or compliance by the Seller with this
Agreement or the Mortgage Loans, the delivery of a portion of the Mortgage Files
to the Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the Closing Date;
(g) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(h) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(i) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans in the form attached as Exhibit J hereto;
(j) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(k) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. There has been no change in the business, operations, financial
condition, properties or assets of the Seller since the date of the Seller's
financial statements that would have a material adverse effect on its ability to
perform its obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(l) Loan Experience. The Seller has delivered information as to its
loan gain and loss experience in respect of foreclosures, its loan delinquency
experience for the immediately preceding three-year period, prepayment speed and
individual loan loss severities and delinquency histories for at least the
immediately preceding year, in each case with respect to mortgage loans owned by
it and such mortgage loans serviced for others during such period, and all such
information so delivered shall be true and correct in all material respects;
(m) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(n) Sale Treatment. The Seller has been advised by its independent
certified public accountants that under generally accepted accounting principles
the transfer of the Mortgage Loans may be treated as a sale on the books and
records of the Seller and the Seller has determined that the disposition of the
Mortgage Loans pursuant to this Agreement will be afforded sale treatment for
tax and accounting purposes;
(o) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan;
(p) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans;
(q) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(r) Ability to Service. The Servicer has the facilities, procedures,
and experienced personnel necessary for the sound servicing of mortgage loans of
the same type as the Mortgage Loans. The Servicer is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by the OTS, the OCC or the FDIC, and is in good standing
to enforce, originate, sell mortgage loans to, and service mortgage loans in
each jurisdiction wherein the Mortgaged Properties are located;
(s) [Reports. On or prior to the Closing Date, Seller has provided
the Custodian and the Purchaser with a MERS Report listing the Custodian as the
Investor with respect to each MERS Designated Mortgage Loan;]
(t) [MERS Designations. With respect to each MERS Designated
Mortgage Loan, the Seller has designated the Custodian as the Investor and no
Person is listed as Interim Funder on the MERS(R) System; and]
(u) [Insured Depository Institution Representations. The Seller is
an Insured Depository Institution, and accordingly, the Seller makes the
following additional representations and warranties:
(i) This Agreement conforms to all statutory and regulatory
requirements applicable to Seller. This Agreement is (a) executed
contemporaneously with the agreement reached by the Seller and the
Purchaser, (b) approved by a specific corporate or banking
association resolution by the board of directors of the Seller,
which approval shall be reflected in the minutes of said board, and
(c) continuously, from the time of its execution, an official record
of the Seller;
(ii) This Agreement has been duly and validly authorized by a
specific corporate or banking association resolution by the board of
directors of the Seller. A copy of such resolution, certified by the
corporate secretary of the Seller or attested to by a vice president
or higher officer of the Seller has been provided to the Purchaser;
and
(iii) The Seller will maintain a copy of this Agreement in its
official books and records and shall make same available for the
Purchaser's inspection and copying on one Business Day's notice.]
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first three Monthly Payments
after the Cut-off Date shall be made with respect to the Mortgage Loan on its
Due Date or within the grace period, all in accordance with the terms of the
related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by [the issuer of any related PMI Policy and] the title insurer, if
any, to the extent required by the policy, and its terms are reflected on the
Mortgage Loan Schedule, if applicable. No Mortgagor has been released, in whole
or in part, except in connection with an assumption agreement, approved by [the
issuer of any related PMI Policy and] the issuer of the title insurer, to the
extent required by the policy, and which assumption agreement is part of the
Mortgage Loan File delivered to the Custodian or to such other Person as the
Purchaser shall designate in writing and the terms of which are reflected in the
Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at, or
subsequent to, the time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the ▇▇▇▇▇▇ ▇▇▇ Guides or by
▇▇▇▇▇▇▇ Mac, as well as all additional requirements set forth in the Servicing
Agreement. If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, as well as all
additional requirements set forth in the Servicing Agreement. All individual
insurance policies contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon have been paid and
such policies may not be reduced, terminated or cancelled without 30 days' prior
written notice to the mortgagee. The Mortgage obligates the Mortgagor thereunder
to maintain the hazard insurance policy at the Mortgagor's cost and expense, and
on the Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's or any servicer's having engaged in, any act or
omission which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of such
policy, including, without limitation, no unlawful fee, commission, kickback or
other unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws or unfair and deceptive practices
laws applicable to the Mortgage Loan have been complied with, the consummation
of the transactions contemplated hereby will not involve the violation of any
such laws or regulations, and the Seller shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage Loan
Schedule [except that with respect to real property located in jurisdictions in
which the use of leasehold estates for residential properties is a
widely-accepted practice, the Mortgaged Property may be a leasehold estate] and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a low-rise condominium project, or an individual
unit in a planned unit development [and that no residence or dwelling is (i) a
mobile home or (ii) a manufactured home], provided, however, that any
condominium unit or planned unit development shall not fall within any of the
"Ineligible Projects" of part VIII, Section 102 of the ▇▇▇▇▇▇ Mae Selling Guide
and shall conform with the Underwriting Guidelines. [In the case of any
Mortgaged Properties that are manufactured homes (a "Manufactured Home Mortgage
Loans"), (i) such Manufactured Home Mortgage Loan conforms with the applicable
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac requirements regarding mortgage loans related to
manufactured dwellings, (ii) the related manufactured dwelling is permanently
affixed to the land, (iii) the related manufactured dwelling and the related
land are subject to a Mortgage properly filed in the appropriate public
recording office and naming Seller as mortgagee, (iv) the applicable laws of the
jurisdiction in which the related Mortgaged Property is located will deem the
manufactured dwelling located on such Mortgaged Property to be a part of the
real property on which such dwelling is located, and (v) such Manufactured Home
Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3) of the
Internal Revenue Code of 1986, as amended and (y) secured by manufactured
housing treated as a single family residence under Section 25(e)(10) of the
Code. As of the date of origination, no portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no portion of
the Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes;
(j) Valid First [and Second Lien]. Each Mortgage is a valid and
subsisting first lien, with respect to First Lien Loans, [or second lien, with
respect to Second Lien Loans,] of record on a single parcel of real estate
constituting the Mortgaged Property, including all buildings and improvements on
the Mortgaged Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements made at any time,
with respect to the related Mortgage Loan, which exceptions are generally
acceptable to prudent mortgage lending companies, and such other exceptions to
which similar properties are commonly subject and which do not individually, or
in the aggregate, materially and adversely affect the benefits of the security
intended to be provided by such Mortgage. In no event shall any Mortgage Loan be
in a lien position more junior than a second lien. The lien of the Mortgage is
subject only to:
(1) the lien of current real property taxes and assessments
not yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal;
(3) 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 the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property;
[and
(4) [with respect to Second Lien Loans, the lien of the first
mortgage on the Mortgaged Property].
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected (A) first lien and first priority security
interest with respect to each First Lien Loan, or [(B) second lien and second
priority security interest with respect to each Second Lien Loan,] in either
case, on the property described therein and Seller has full right to sell and
assign the same to Purchaser. The Mortgaged Property was not, as of the date of
origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to
secure debt or other security instrument creating a lien subordinate to the lien
of the Mortgage;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. The documents, instruments and
agreements submitted for loan underwriting were not falsified and contain no
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the information and statements therein
not misleading. No fraud, error, omission, misrepresentation, negligence or
similar occurrence with respect to a Mortgage Loan has taken place on the part
of any Person, including without limitation, the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination or
servicing of the Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the Closing Date, the Seller will have no right to modify
or alter the terms of the sale of the Mortgage Loan and the Seller will have no
obligation or right to repurchase the Mortgage Loan or substitute another
Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) [CLTV], LTV, [PMI Policy]. [No Mortgage Loan that is a Second
Lien Loan has a CLTV in excess of [90]%]. No Mortgage Loan has an LTV greater
than [100]%. [The LTV of the Mortgage Loan either is not more than 80% or the
excess over 75% of the Appraised Value is and will be insured as to payment
defaults by a PMI Policy until the LTV of such Mortgage Loan is reduced to 80%.
All provisions of such PMI Policy have been and are being complied with, such
policy is in full force and effect, and all premiums due thereunder have been
paid.] No action, inaction, or event has occurred and no state of facts exists
that has, or will result in the exclusion from, denial of, or defense to
coverage. [Any Mortgage Loan subject to a PMI Policy obligates the Mortgagor
thereunder to maintain the PMI Policy and to pay all premiums and charges in
connection therewith.] The Mortgage Interest Rate for the Mortgage Loan as set
forth on the Mortgage Loan Schedule is net of any such insurance premium;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and each such title insurance policy is
issued by a title insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first priority lien
(with respect to First Lien Loans) [or second priority lien (with respect to
Second Lien Loans)] of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to the exceptions contained in clauses (1), (2), (3)
[and (4)] of paragraph (j) of this Subsection 9.02, and in the case of
Adjustable Rate Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Interest Rate and Monthly Payment.
Where required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. The title policy does not contain any special exceptions
(other than the standard exclusions) for zoning and uses and has been marked to
delete the standard survey exception or to replace the standard survey exception
with a specific survey reading. The Seller, its successor and assigns, are the
sole insureds of such lender's title insurance policy, and such lender's title
insurance policy is valid and remains in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration. [With respect to each Second Lien
Loan, (i) the prior mortgage is in full force and effect, (ii) there is no
default, breach, violation or event of acceleration existing under such prior
mortgage or the related mortgage note, (iii) no event which, with the passage of
time or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration thereunder, and
either (A) the prior mortgage contains a provision which allows or (B)
applicable law requires, the mortgagee under the Second Lien Loan to receive
notice of, and affords such mortgagee an opportunity to cure any default by
payment in full or otherwise under the prior mortgage];
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. The documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of material fact
or omit to state a material fact required to be stated therein or necessary to
make the information and statements therein not misleading. No Mortgage Loan
contains terms or provisions which would result in negative amortization.
Principal payments on the Mortgage Loan commenced no more than sixty days after
funds were disbursed in connection with the Mortgage Loan. The Mortgage Interest
Rate as well as the Lifetime Rate Cap and the Periodic Cap are as set forth on
the Mortgage Loan Schedule. The Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest, with
respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the description of pool characteristics attached as Exhibit J
hereto, the Mortgage Loan is payable on the first day of each month. There are
no Convertible Mortgage Loans which contain a provision allowing the Mortgagor
to convert the Mortgage Note from an adjustable interest rate Mortgage Note to a
fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached hereto as Exhibit I). The Mortgage Note and Mortgage
are on forms acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae and the Seller has not made
any representations to a Mortgagor that are inconsistent with the mortgage
instruments used;
(w) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan, or cause the
Mortgage Loans to prepay during any period materially faster or slower than the
mortgage loans originated by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project is (i) acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac or (ii) located in a
condominium or planned unit development project which has received project
approval from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The representations and warranties
required by ▇▇▇▇▇▇ Mae with respect to such condominium or planned unit
development have been satisfied and remain true and correct;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first [or second, as applicable,] lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to ▇▇▇▇▇▇ ▇▇▇ and
▇▇▇▇▇▇▇ Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper and prudent in the mortgage origination
and servicing business. With respect to escrow deposits and Escrow Payments, all
such payments are in the possession of, or under the control of, the Seller and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow Payments have
been collected in full compliance with state and federal law and the provisions
of the related Mortgage Note and Mortgage. An escrow of funds is not prohibited
by applicable law and has been established in an amount sufficient to pay for
every item that remains unpaid and has been assessed but is not yet due and
payable. No escrow deposits or Escrow Payments or other charges or payments due
the Seller have been capitalized under the Mortgage or the Mortgage Note. All
Mortgage Interest Rate adjustments have been made in strict compliance with
state and federal law and the terms of the related Mortgage and Mortgage Note on
the related Interest Rate Adjustment Date. If, pursuant to the terms of the
Mortgage Note, another index was selected for determining the Mortgage Interest
Rate, the same index was used with respect to each Mortgage Note which required
a new index to be selected, and such selection did not conflict with the terms
of the related Mortgage Note. The Seller executed and delivered any and all
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
There is no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation is
an issue; there is no violation of any environmental law, rule or regulation
with respect to the Mortgage Property; and nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(ll) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(mm) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a qualified appraiser, duly appointed by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(nn) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(oo) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(pp) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(qq) No Defense to Insurance Coverage. The Seller has caused or will
cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser in any insurance policies applicable to the Mortgage
Loans including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action has
been taken or failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the Closing Date (whether or not known to
the Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any applicable, special
hazard insurance policy, [PMI Policy] or bankruptcy bond (including, without
limitation, any exclusions, denials or defenses which would limit or reduce the
availability of the timely payment of the full amount of the loss otherwise due
thereunder to the insured) whether arising out of actions, representations,
errors, omissions, negligence, or fraud of the Seller, the related Mortgagor or
any party involved in the application for such coverage, including the
appraisal, plans and specifications and other exhibits or documents submitted
therewith to the insurer under such insurance policy, or for any other reason
under such coverage, but not including the failure of such insurer to pay by
reason of such insurer's breach of such insurance policy or such insurer's
financial inability to pay;
(rr) Escrow Analysis. With respect to each Mortgage, the Seller has
within the last twelve months (unless such Mortgage was originated within such
twelve month period) analyzed the required Escrow Payments for each Mortgage and
adjusted the amount of such payments so that, assuming all required payments are
timely made, any deficiency will be eliminated on or before the first
anniversary of such analysis, or any overage will be refunded to the Mortgagor,
in accordance with RESPA and any other applicable law;
(ss) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Servicer has reported the Mortgagor credit files to each of the three credit
repositories in a timely manner;
(tt) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(uu) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(vv) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise as
set forth on the Mortgage Loan Schedule hereof, and no Mortgage Loan has a
Prepayment Penalty period in excess of five years;
(ww) Predatory Lending Regulations. None of the Mortgage Loans are
(i) covered by the Home Ownership and Equity Protection Act of 1994 or (ii) in
violation of, or classified as "high cost", "threshold," or "predatory" loans
under, any other applicable state, federal or local law;
(xx) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(yy) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of these
contracts is assignable to the Purchaser;
(zz) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(aaa) Regarding the Mortgagor. The Mortgagor is one or more natural
persons [and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with ▇▇▇▇▇▇ Mae guidelines for
such trusts];
(bbb) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(ccc) Recordation. Each original Mortgage was recorded and[, except
for those Mortgage Loans subject to the MERS identification system,] all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ddd) FICO Scores. Each Mortgage Loan has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than ___; and
(eee) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price,
together with all expenses incurred by the Purchaser as a result of such
repurchase. Notwithstanding the above sentence, within 60 days of the earlier of
either discovery by, or notice to, the Seller of any breach of the
representations or warranties set forth in clauses (vv), (ww), (xx) or (zz) of
Subsection 9.02, the Seller shall repurchase such Mortgage Loan at the
Repurchase Price, together with all expenses incurred by the Purchaser as a
result of such repurchase. In the event that a breach shall involve any
representation or warranty set forth in Subsection 9.01, and such breach cannot
be cured within 60 days of the earlier of either discovery by or notice to the
Seller of such breach, all of the Mortgage Loans shall, at the Purchaser's
option, be repurchased by the Seller at the Repurchase Price. However, if the
breach shall involve a representation or warranty set forth in Subsection 9.02
(other than the representations and warranties set forth in clauses (vv), (ww),
(xx) or (zz) of such Subsection) and the Seller discovers or receives notice of
any such breach within 120 days of the Closing Date, the Seller shall, at the
Purchaser's option and provided that the Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than 120 days after the Closing Date.
If the Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the
deficient Mortgage Loan. Any repurchase of a Mortgage Loan or Loans pursuant to
the foregoing provisions of this Subsection 9.03 shall be accomplished by either
(a) if the Servicing Agreement has been entered into and is in effect, deposit
in the Custodial Account of the amount of the Repurchase Price for distribution
to the Purchaser on the next scheduled Remittance Date, after deducting
therefrom any amount received in respect of such repurchased Mortgage Loan or
Loans and being held in the Custodial Account for future distribution or (b) if
the Servicing Agreement has not been entered into or is no longer in effect, by
direct remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the Mortgage Loan Schedule to
reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall or
shall cause the Servicer to remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and the Successor Servicer and hold it
harmless against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller representations and
warranties contained in this Agreement or any Reconstitution Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser as provided in this Subsection 9.03 constitute
the sole remedies of the Purchaser and the Successor Servicer respecting a
breach of the foregoing representations and warranties. For purposes of this
paragraph, "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement and "Successor Servicer" shall mean the Person then acting as the
Successor Servicer under this Agreement and any and all Persons who previously
were "Successor Servicers" under this Agreement.
Upon the request of the Purchaser, the Seller hereby agrees to
execute a recognition agreement in the form of Exhibit K hereto recognizing the
servicer designated by the Purchaser therein as the Successor Servicer.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans With Early Payment
Defaults.
If the related Mortgagor is delinquent with respect to (i) the
Mortgage Loan's first Monthly Payment after origination, or (ii) the Mortgage
Loan's first three (3) Monthly Payments after the Cut-off Date, the Seller, at
the Purchaser's option exercised in its sole discretion, shall repurchase such
Mortgage Loan from the Purchaser at a price equal to the percentage of par as
stated in the Purchase Price and Terms Agreement (subject to adjustment as
provided therein) multiplied by the then outstanding principal balance of such
Mortgage Loan, plus accrued and unpaid interest thereon from the date to which
interest was last paid through the day prior to the repurchase date at the
applicable Mortgage Interest Rate, plus any outstanding advances owed to any
servicer in connection with such Mortgage Loan.
Subsection 9.05 Repurchase of Certain Mortgage Loans That Prepay in
Full.
With respect to Mortgage Loans without Prepayment Penalties, in the
event that any such Mortgage Loan is prepaid in full on or before a
Securitization Transfer or _________, 200_, the Seller shall pay the Purchaser,
within three (3) Business Days of such prepayment in full, the difference
between (a) the Purchase Price for such Mortgage Loan and (b) the sum of the
outstanding principal balance of such Mortgage Loan as of the Cut-off Date and
any principal received by the Purchaser after the Closing Date with respect to
such Mortgage Loan.
Subsection 9.06 Purchaser's Right to Review.
From the Closing Date until ninety (90) days after such Closing
Date, the Purchaser shall have the right to review each Mortgage File and Credit
File, to conduct property inspections, obtain appraisal recertifications,
drive-by appraisals, brokers price opinions and otherwise to underwrite the
Mortgage Loans and to reject any Mortgage Loan which in the Purchaser's sole
opinion is an unacceptable investment. In the event that the Purchaser so
rejects any Mortgage Loan, the Seller shall, no later than five (5) Business
Days following receipt of notice of such rejection, repurchase the rejected
Mortgage Loan in the manner prescribed in Subsection 9.03 hereof at the Purchase
Price, together with accrued and unpaid interest at the Mortgage Interest Rate
through the date of repurchase. Any rejected Mortgage Loan shall be removed from
the terms of this Agreement.
All rights of the Purchaser under this Subsection 9.06 shall
terminate upon the transfer of any Mortgage Loan to any other Purchaser.
Notwithstanding the foregoing, the fact that the Purchaser or its
designee has conducted or failed to conduct the review/due diligence procedures
specified above or any other partial or complete examination of the Mortgage
Files or Credit Files shall not impair in any way the Purchaser's or any of its
successors' rights to demand repurchase, substitution or any other remedy
provided under this Agreement.
SECTION 10. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser via electronic medium
acceptable to the Purchaser, a listing on a loan-level basis
of the necessary information to compute the Purchase Price of
the Mortgage Loans delivered on the Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and under the Servicing Agreement (with respect
to each Mortgage Loan, for an interim period, as specified
therein) shall be true and correct as of the Closing Date and
no event shall have occurred which, with notice or the passage
of time, would constitute a default under this Agreement or an
Event of Default under the Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Servicing Agreement, dated as of the Cut-off Date;
3. the Custodial Agreement, dated as of the Cut-off Date;
4. the Mortgage Loan Schedule, one copy to be attached hereto, and one copy
to be attached to the Custodian's counterpart of the Custodial Agreement;
5. a Custodian's Certification, as required under the Custodial Agreement, in
the form of Exhibit 2 to the Custodial Agreement;
6. a Custodial Account Letter Agreement or a Custodial Account Certification,
as applicable, as required under the Servicing Agreement;
7. an Escrow Account Letter Agreement or an Escrow Account Certification, as
applicable, as required under the Servicing Agreement;
8. an Officer's Certificate, in the form of Exhibit E hereto with respect to
the Seller, including all attachments thereto;
9. an Opinion of Counsel of the Seller (who may be an employee of the
Seller), in the form of Exhibit F hereto ("Opinion of Counsel of the
Seller");
10. an Opinion of Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial Agreement;
11. a Security Release Certification, in the form of Exhibit G or H, as
applicable, hereto executed by any person, as requested by the Purchaser,
if any of the Mortgage Loans have at any time been subject to any security
interest, pledge or hypothecation for the benefit of such person;
12. a certificate or other evidence of merger or change of name, signed or
stamped by the applicable regulatory authority, if any of the Mortgage
Loans were acquired by the Seller by merger or acquired or originated by
the Seller while conducting business under a name other than its present
name, if applicable; and
13. [a MERS Report reflecting the Custodian as Investor and no Person as
Interim Funder for each MERS Designated Mortgage Loan.]
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including, but not limited to, recording fees,
fees for title policy endorsements and continuations, fees for recording
Assignments of Mortgage, and the Seller's attorney's fees, shall be paid by the
Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the Closing Date, on one or more dates (each a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each, a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) ▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "▇▇▇▇▇▇ Mae Transfer"); or
(ii) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Seller agrees to execute (i) in connection with any Agency
Transfer, any and all pool purchase contracts, and/or agreements reasonably
acceptable to the Purchaser among the Purchaser, the Seller, ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac (as the case may be) and any servicer, (ii) in connection with a
Whole Loan Transfer, a seller's warranties and servicing agreement or a
participation and servicing agreement in form and substance reasonably
acceptable to the Purchaser, and (iii) in connection with a Securitization
Transfer, a pooling and servicing agreement in form and substance reasonably
acceptable to the Purchaser (collectively the agreements referred to herein are
designated, the "Reconstitution Agreements").
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; (3) to restate the
representations and warranties set forth in this Agreement and the Servicing
Agreement as of the settlement or closing date in connection with such
Reconstitution (each, a "Reconstitution Date") or make the representations and
warranties set forth in the related selling/servicing guide of the master
servicer or issuer, as the case may be, or such representations and warranties
as may be required by any Rating Agency or prospective purchaser of the related
securities or such Mortgage Loans, in connection with such Reconstitution. The
Seller shall use its reasonable best efforts to provide to such master servicer
or issuer, as the case may be, and any other participants or purchasers in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Seller or its affiliates,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller and/or
the Servicer as are reasonably believed necessary by the Purchaser or any such
other participant; and (iii) to execute, deliver and satisfy all conditions set
forth in any indemnity agreement required by the Purchaser or any such
participant. Moreover, the Seller agrees to cooperate with all reasonable
requests made by the Purchaser to effect such Reconstitution Agreements. The
Seller shall indemnify the Purchaser, each Affiliate designated by the Purchaser
and each Person who controls the Purchaser or such Affiliate and hold each of
them harmless from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that each of them may sustain in any way
related to any information provided by or on behalf of the Seller regarding the
Seller, the Seller's servicing practices or performance, the Mortgage Loans or
the Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement.
In the event the Purchaser has elected to have the Seller hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an assignment of mortgage in blank or to the prospective purchaser
or trustee, as applicable, from the Seller, acceptable to the prospective
purchaser or trustee, as applicable, for each Mortgage Loan that is part of the
Reconstitution and shall pay all preparation and recording costs associated
therewith. In connection with the Reconstitution, the Seller shall execute each
Assignment of Mortgage, [(except with respect to each MERS Designated Mortgage
Loan)],track such Assignments of Mortgage to ensure they have been recorded and
deliver them as required by the prospective purchaser or trustee, as applicable,
upon the Seller's receipt thereof. Additionally, the Seller shall prepare and
execute, at the direction of the Purchaser, any note endorsement in connection
with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Servicing
Agreement shall remain in effect with respect to the Mortgage Loans, shall
continue to be serviced in accordance with the terms of this Agreement and the
Servicing Agreement and with respect thereto this Agreement shall remain in full
force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and the Successor Servicer
and hold it harmless against any and all claims, losses, damages, penalties,
fines, forfeitures, legal fees (including (without limitation) legal fees
incurred in connection with the enforcement of the Seller's indemnification
obligation under this Subsection 14.01) and related costs, judgments, and any
other costs, fees and expenses that the Purchaser or the Successor Servicer may
sustain in any way related to the failure of the Seller to perform its duties
under this Agreement or any breach of any of Seller's representations,
warranties or covenants set forth in this Agreement, and to service the Mortgage
Loans in strict compliance with the terms of the Servicing Agreement or any
Reconstitution Agreement entered into pursuant to Section 13. The Seller
immediately shall notify the Purchaser if a claim is made by a third party with
respect to this Agreement or any Reconstitution Agreement or the Mortgage Loans,
assume (with the prior written consent of the Purchaser) the defense of any such
claim and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Purchaser in respect of such claim. The Purchaser promptly
shall reimburse the Seller for all amounts advanced by it pursuant to the
preceding sentence, except when the claim is in any way related to the Seller's
indemnification pursuant to Section 9, or is in any way related to the failure
of the Seller to service and administer the Mortgage Loans in strict compliance
with the terms of this Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, 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, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans is
mandatory from and after the date of the execution of the Purchase Price and
Terms Agreement, it being specifically understood and agreed that each Mortgage
Loan is unique and identifiable on the date hereof and that an award of money
damages would be insufficient to compensate the Purchaser for the losses and
damages incurred by the Purchaser (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller's failure to deliver (i) each
of the related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser
on or before the Closing Date. The Seller hereby grants to the Purchaser a lien
on and a continuing security interest in each Mortgage Loan and each document
and instrument evidencing each such Mortgage Loan to secure the performance by
the Seller of its obligations under the Purchase Price and Terms Agreement, and
the Seller agrees that it shall hold such Mortgage Loans in custody for the
Purchaser subject to the Purchaser's (i) right to reject any Mortgage Loan (or
Qualified Substitute Mortgage Loan) under the terms of this Agreement and to
require another Mortgage Loan (or Qualified Substitute Mortgage Loan) to be
substituted therefor, and (ii) obligation to pay the Purchase Price for the
Mortgage Loans. All rights and remedies of the Purchaser under this Agreement
are distinct from, and cumulative with, any other rights or remedies under this
Agreement or afforded by law or equity and all such rights and remedies may be
exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
_____________________________
_____________________________
_____________________________
Attention: ____________________
(ii) if to the Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or 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).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. There shall be no limitation on the number of assignments
or transfers allowable by the Purchaser with respect to the Mortgage Loans and
this Agreement. In the event the Purchaser assigns this Agreement, and the
assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Seller with respect thereto. The Successor
Servicer shall be an intended third party beneficiary of this Agreement to the
same extent as if it were a party hereto, and shall have the right to enforce
the provisions of this Agreement.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without the prior written consent of the Purchaser.
It is understood and agreed that all rights and benefits relating to the
solicitation of any Mortgagors and the attendant rights, title and interest in
and to the list of such Mortgagors and data relating to their Mortgages
(including insurance renewal dates) shall be transferred to the Purchaser
pursuant hereto on the Closing Date and the Seller shall take no action to
undermine these rights and benefits. Notwithstanding the foregoing, it is
understood and agreed that promotions undertaken by the Seller or any affiliate
of the Seller which are directed to the general public at large, including,
without limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO ▇▇▇ IN ANY OTHER JURISDICTION.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY, a New
York limited partnership
(Purchaser)
By:▇▇▇▇▇▇▇ ▇▇▇▇▇ REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:______________________________
Name:____________________________
Title:___________________________
_________________________________
(Seller)
By:____________________________________
Name:__________________________________
Title:_________________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH 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 and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) [except with respect to each MERS Designated Mortgage Loan,] the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Assignment of Mortgage must be duly recorded only
if recordation is either necessary under applicable law or commonly required by
private institutional mortgage investors in the area where the Mortgaged
Property is located or on direction of the Purchaser as provided in this
Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage shall
be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "[Seller], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by "[Seller], formerly
known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller [(or MERS with
respect to each MERS Designated Mortgage Loan)]to the Last Endorsee with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of mortgage,
the Seller shall deliver or cause to be delivered to the Custodian, a photocopy
of such intervening assignment, together with (i) in the case of a delay caused
by the public recording office, an Officer's Certificate of the Seller (or
certified by the title company, escrow agent, or closing attorney) stating that
such intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening assignment of
mortgage certified by the appropriate public recording office to be a true and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office, a
copy of such intervening assignment certified by such public recording office to
be a true and complete copy of the original recorded intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company; [and]
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage; [and
(i) [the original PMI Policy or certificate of insurance, where
required pursuant to the Agreement.]
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian.
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
----------------------------
(a) The original mortgagee policy of title insurance.
(b) Any security agreement, chattel mortgage or equivalent executed
in connection with the Mortgage.
(c) The original hazard insurance policy and, if required by law,
flood insurance policy.
(d) Residential loan application.
(e) Mortgage Loan closing statement.
(f) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(g) Verification of acceptable evidence of source and amount of
downpayment.
(h) Credit report on the Mortgagor.
(i) Residential appraisal report.
(j) Photograph of the Mortgaged Property.
(k) Survey of the Mortgaged Property, if any.
(l) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e., map
or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(m) All required disclosure statements.
(n) If available, termite report, structural engineer's report,
water potability and septic certification.
(o) Sales contract.
(p) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence, current
and historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in a mortgage
loan file and which are required to document the Mortgage Loan or to service the
Mortgage Loan.
(q) Amortization schedule.
EXHIBIT C
MORTGAGE LOAN SCHEDULE FIELDS
-----------------------------
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's name;
(3) the street address of the Mortgaged Property including the city,
state and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied, a second home or investment property;
(5) the number and type of residential units constituting the
Mortgaged Property (i.e. a single family residence, a 2-4 family residence, a
unit in a condominium project or a unit in a planned unit development,
manufactured housing);
(6) the original months to maturity or the remaining months to
maturity from the Cut-off Date, in any case based on the original amortization
schedule and, if different, the maturity expressed in the same manner but based
on the actual amortization schedule;
(7) with respect to First Lien Loans, the LTV and with respect to
Second Lien Loans, the CLTV, each at the origination;
(8) the Mortgage Interest Rate as of the Cut-off Date;
(9) the date on which the Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date;
(10) the stated maturity date;
(11) the amount of the Monthly Payment as of the Cut-off Date;
(12) the last payment date on which a payment was actually applied
to the outstanding principal balance;
(13) the original principal amount of the Mortgage Loan;
(14) the principal balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal due and
collected on or before the Cut-off Date;
(15) with respect to Adjustable Rate Mortgage Loans, the Interest
Rate Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross
Margin;
(17) with respect to Adjustable Rate Mortgage Loans, the Lifetime
Rate Cap under the terms of the Mortgage Note;
(18) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index;
(19) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Cap under the terms of the Mortgage Note;
(20) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Floor under the terms of the Mortgage Note;
(21) the type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate,
First Lien[, Second Lien]);
(22) a code indicating the purpose of the loan (i.e., purchase, rate
and term refinance, equity take-out refinance);
(23) a code indicating the documentation style (i.e. full,
alternative or reduced);
(24) the loan credit classification (as described in the
Underwriting Guidelines);
(25) whether such Mortgage Loan provides for a Prepayment Penalty;
(26) the Prepayment Penalty period of such Mortgage Loan, if
applicable;
(27) a description of the Prepayment Penalty, if applicable;
(28) the Mortgage Interest Rate as of origination;
(29) the credit risk score (FICO score) at origination;
(30) the date of origination;
(31) the Mortgage Interest Rate adjustment period;
(32) the Mortgage Interest Rate adjustment percentage;
(33) the Mortgage Interest Rate floor;
(34) the Mortgage Interest Rate calculation method (i.e., 30/360,
simple interest, other);
(35) a code indicating whether the Mortgage Loan is a Section 32
Mortgage Loan;
(36) a code indicating whether the Mortgage Loan is assumable;
(37) a code indicating whether the Mortgage Loan has been modified;
(38) the Current CLTV;
(39) the one year payment history;
(40) the Due Date for the first Monthly Payment;
(41) the original Monthly Payment due;
(42) with respect to the related Mortgagor, the debt-to-income
ratio;
[(43) with respect to Second Lien Loans, the outstanding principal
balance of the superior lien;]
(44) the Appraised Value of the Mortgaged Property;
(45) the sales price of the Mortgaged Property if the Mortgage Loan
was originated in connection with the purchase of the Mortgaged Property;
(46) the MERS Identification Number].
With respect to the Mortgage Loans in the aggregate:
(1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the
Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and
(4) the weighted average maturity of the Mortgage Loans.
EXHIBIT D
MORTGAGE LOAN SCHEDULE
----------------------
EXHIBIT E
SELLER'S OFFICER'S CERTIFICATE
------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of [the Mortgage Loan
Purchase and Warranties Agreement, dated as of _______ __, 200_, by and
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the "Purchaser") and the Company
(the "Purchase Agreement"),] [the Servicing Agreement, dated as of _______
__, 200_, by and between the Company and the Purchaser (the "Servicing
Agreement")] and the Custodial Agreement dated as of _____ __, 200_ by and
among the Company, the Purchaser and ______________[CUSTODIAN] (the
"Custodial Agreement") [and to endorse the Mortgage Notes and execute the
Assignments of Mortgages by original [or facsimile] signature], and such
resolutions are in effect on the date hereof and have been in effect
without amendment, waiver, rescission or modification since _____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with [the Purchase Agreement,] [the Servicing Agreement,] the Custodial
Agreement, [the sale of the mortgage loans] or the consummation of the
transactions contemplated by the agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of [the Purchase Agreement] [the Servicing
Agreement] and the Custodial Agreement conflicts or will conflict with or
results or will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or
order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is subject
or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of [the
Purchase Agreement] [the Servicing Agreement] and the Custodial Agreement,
or the mortgage loans or of any action taken or to be taken in connection
with the transactions contemplated hereby, or which would be likely to
impair materially the ability of the Company to perform under the terms of
[the Purchase Agreement] [the Servicing Agreement] and the Custodial
Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed [(a) the Purchase
Agreement,] [(a) the Servicing Agreement,] (b) the Custodial Agreement and
(c) any other document delivered or on the date hereof in connection with
any purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected
or appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in [the Purchase Agreement] [the Servicing
Agreement] and the Custodial Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
________________________ ________________________ _____________________
________________________ ________________________ _____________________
________________________ ________________________ _____________________
________________________ ________________________ _____________________
________________________ ________________________ _____________________
________________________ ________________________ _____________________
________________________ ________________________ _____________________
EXHIBIT F
FORM OF OPINION OF COUNSEL TO THE SELLER
----------------------------------------
(date)
▇▇▇▇▇▇▇ Sachs Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the "Purchaser"), dated as of
_________ __, 200_ (the "Purchase Agreement") which sale is in the form of whole
loans, delivered pursuant to a Custodial Agreement dated as of _____ __, 200_
among the Purchaser, the Company and [CUSTODIAN] (the "Custodial Agreement" and,
collectively with the Purchase Agreement, the "Agreements"). Capitalized terms
not otherwise defined herein have the meanings set forth in the Purchase
Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Custodial Agreement;
3. the form of Assignment of Mortgage;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of ___________
and is qualified to transact business in, and is in good
standing under, the laws of [the state of incorporation].
2. The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver such
Agreements and to perform and observe the terms and conditions
of such Agreements.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company, and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company, subject to bankruptcy laws and other
similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the with the Agreements and the sale of the
Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company, the terms of any indenture or other
agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or violates any
statute or order, rule, regulations, writ, injunction or
decree of any court, governmental authority or regulatory body
to which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements to which it
is a party or the Mortgage Loans or of any action taken or to
be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the
Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement and the
Custodial Agreement is sufficient to fully transfer to the
Purchaser all right, title and interest of the Company thereto
as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
EXHIBIT G
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
__________________________
__________________________
__________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
-----------------------------------------
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the state of
incorporation] (the "Company") has committed to sell to ▇▇▇▇▇▇▇ Sachs Mortgage
Company under a Mortgage Loan Purchase and Warranties Agreement, dated as of
______ __, 200_, certain mortgage loans originated by the Association. The
Company warrants that the mortgage loans to be sold to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company are in addition to and beyond any collateral required to secure advances
made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
▇▇▇▇▇▇▇ Sachs Mortgage Company shall not be used as additional or substitute
collateral for advances made by the Association. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
understands that the balance of the Company's mortgage loan portfolio may be
used as collateral or additional collateral for advances made by the
Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to ▇▇▇▇▇▇▇ Sachs
Mortgage Company.
Very truly yours,
____________________________
By:_________________________
Name:_______________________
Title:______________________
Date:_______________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
___________________________
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
EXHIBIT H
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
I. Release of Security Interest
----------------------------
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company from the Company named below pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement, dated as of ______
__, 200_, and certifies that all notes, mortgages, assignments and other
documents in its possession relating to such Mortgage Loans have been delivered
and released to the Company named below or its designees, as of the date and
time of the sale of such Mortgage Loans to ▇▇▇▇▇▇▇ Sachs Mortgage Company.
Name and Address of Financial Institution
________________________________
(name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
------------------------
The Company named below hereby certifies ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to ▇▇▇▇▇▇▇ Sachs Mortgage Company the security interests in the
Mortgage Loans released by the above-named financial institution comprise all
security interests relating to or affecting any and all such Mortgage Loans. The
Company warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
_____________________________
By:__________________________
Title:_______________________
Date:________________________
EXHIBIT I
UNDERWRITING GUIDELINES
-----------------------
EXHIBIT J
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
-------------------------------------------------------
Pool Characteristics of the Mortgage Loans as delivered on the Closing Date:
With respect to both aggregate outstanding principal balance of all
the Mortgage Loans, (a) no more than ___% of the Mortgage Loans are secured by
real property improved by two- to four- family dwellings, (b) no more than ___%
are secured by real property improved by individual condominium units, (c) no
more than ___% are secured by real property improved by an individual unit in a
planned unit development, and (d) at least ___% are secured by real property
with a detached one family residence erected thereon. With respect to the
aggregate unpaid principal balance of the Mortgage Loans, (a) no more than ____%
are "cash-out" refinance mortgage loans, (b) no more than ____% are rate and
term refinance mortgage loans and (c) at least ____% are purchase mortgage
loans. With respect to the aggregate unpaid principal balance of the Mortgage
Loans at the time of origination, (a) no more than ____% of the Mortgaged
Properties were owner-occupied second homes, (b) no more than ____% of the
Mortgaged Properties were investor properties and (c) at least ____% of the
Mortgaged Properties were owner-occupied primary residences. With respect to the
aggregate unpaid principal balance of the Mortgage Loans, the weighted average
FICO Score shall be at least _______. No Mortgage Loan shall have a FICO Score
less than ___. With respect to the aggregate unpaid principal balance of the
Mortgage Loans, (i) no more than __% of the Mortgage Loans were originated under
the Seller's `stated documentation' program, (ii) no more than __% of the
Mortgage Loans were originated under a documentation program which is lacking
ratio verification, (iii) no more than __% of the Mortgage Loans have no
documentation and (iv) at least _________% of the Mortgage Loan were originated
under the Seller's `full documentation' program. The maximum Mortgage Interest
Rate on the Mortgage Loans as of the Cut-off Date was ____%. The minimum
Mortgage Interest Rate on the Mortgage Loans as of the Cut-off Date was ____%.
The Mortgage Loans have a weighted average remaining term of ___ months. The
maximum original principal balance of the Mortgage Loans is $_______________.
The minimum original principal balance of the Mortgage Loans is $______________.
The average original principal balance of the Mortgage Loans is $
_______________. With respect to the aggregate unpaid principal balance of the
Mortgage Loans: (a) __% of the Mortgaged Properties will be located in
[_______]; (b) __% of the Mortgaged Properties will be located in [______] and
(c) not more than __% of the Mortgaged Properties will be located in any other
single state. The Mortgage Loan, as of the date of its origination, has an LTV
equal to or less than ___%. The weighted average LTV of all the Mortgage Loans
as of their respective dates of origination was not greater than ____%
EXHIBIT K
SERVICER ACKNOWLEDGMENT
-----------------------
As of [_________]
[SELLER]
[ADDRESS].
Re: Letter Agreement in connection with the purchase by ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company (the "Purchaser") and the sale by [SELLER] (the
"Company") of mortgage loans pursuant to that certain Mortgage Loan
Purchase and Warranties Agreement (the "Agreement"), dated as of
[____], 200[__], by and between the Company and the Purchaser
-------------------------------------------------------------------
Ladies and Gentlemen:
In connection with the above-referenced transaction, and in
consideration of the mutual agreements hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Purchaser and the Company hereby agree as follows:
1. Unless otherwise specified in this letter agreement, all capitalized terms
herein shall have the meaning as provided in the Agreement.
2. The Purchaser hereby requests, and the Company hereby acknowledges, that
[SERVICER] shall be the "Successor Servicer" under the agreement.
3. This letter may be executed in any number of counterparts each of which
shall constitute one and the same instrument, and either party hereto may
execute this letter by signing any such counterpart.
[the remainder of this page intentionally left blank]
4. This letter shall be deemed in effect when a fully executed counterpart
thereof is received by the Company in the State of New York and shall be
deemed to have been made in the State of New York. This letter shall be
construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder shall be
determined in accordance with the laws of the State of New York except to
the extent preempted by Federal law.
Very truly yours,
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY
By:_____________________________________
Name:___________________________________
Title:__________________________________
Accepted and Agreed:
[SELLER]
By:______________________________
Name:____________________________
Title:___________________________
EXHIBIT Q
FLOW SERVICING AGREEMENT, DATED MAY 1, 2005, BETWEEN ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE
COMPANY AND COUNTRYWIDE HOME LOANS SERVICING LP
EXECUTION COPY
================================================================================
FLOW SERVICING AGREEMENT
between
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY,
Owner
and
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer
Dated as of May 1, 2005
FIXED AND ADJUSTABLE RATE, RESIDENTIAL MORTGAGE LOANS
================================================================================
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions...................................................
ARTICLE II
SERVICING
Section 2.01 Servicer to Act as Servicer...................................
Section 2.02 Liquidation of Mortgage Loans.................................
Section 2.03 Collection of Mortgage Loan Payments..........................
Section 2.04 Establishment of and Deposits to Custodial Account............
Section 2.05 Permitted Withdrawals From Custodial Account..................
Section 2.06 Establishment of and Deposits to Escrow Account...............
Section 2.07 Permitted Withdrawals From Escrow Account.....................
Section 2.08 Payment of Taxes, Insurance and Other Charges.................
Section 2.09 Protection of Accounts........................................
Section 2.10 Maintenance of Hazard Insurance...............................
Section 2.11 Maintenance of Mortgage Impairment Insurance..................
Section 2.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance....................................................
Section 2.13 Inspections...................................................
Section 2.14 Restoration of Mortgaged Property.............................
Section 2.15 Title, Management and Disposition of REO Property.............
Section 2.16 Permitted Withdrawals with Respect to REO Property............
Section 2.17 Real Estate Owned Reports.....................................
Section 2.18 Liquidation Reports...........................................
Section 2.19 Reports of Foreclosures and Abandonments of Mortgaged
Property.....................................................
Section 2.20 Notification of Adjustments...................................
Section 2.21 Recordation of Assignments of Mortgage........................
Section 2.22 Additional Servicing Requirements.............................
Section 2.23 Credit Reporting..............................................
Section 2.24 [Reserved]....................................................
Section 2.25 Early Payment Default and Repurchase Obligations..............
Section 2.26 Tax and Flood Service Contracts...............................
ARTICLE III
PAYMENTS TO OWNER
Section 3.01 Remittances...................................................
Section 3.02 Monthly Reports to Owner.....................................
Section 3.03 Advances by Servicer..........................................
Section 3.04 Principal and Interest Advances by Servicer...................
Section 3.05 Charge off and Advance Analysis...............................
ARTICLE IV
Section 4.01 Transfers of Mortgaged Property...............................
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files.......
Section 4.03 Servicing Compensation........................................
Section 4.04 Annual Statement as to Compliance.............................
Section 4.05 Annual Independent Public Accountants' Servicing Report.......
Section 4.06 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification..................................
Section 4.07 Right to Examine Servicer Records.............................
Section 4.08 Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999................
Section 4.09 On-Line Access................................................
Section 4.10 Assessment of Servicing Compliance............................
Section 4.11 Subservicing..................................................
ARTICLE V
SERVICER TO COOPERATE
Section 5.01 Provision of Information......................................
Section 5.02 Financial Statements; Servicing Facilities....................
ARTICLE VI
TERMINATION
Section 6.01 Termination...................................................
Section 6.02 Transfer of Servicing.........................................
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the related
Transfer Date................................................
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification...............................................
Section 8.02 Limitation on Liability of Servicer and Others................
Section 8.03 Limitation on Resignation and Assignment by Servicer..........
Section 8.04 Assignment by Owner...........................................
Section 8.05 Merger or Consolidation of the Servicer.......................
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF OWNER
Section 9.01 Organization and Good Standing; Licensing.....................
Section 9.02 Authorization; Binding Obligations............................
Section 9.03 No Consent Required...........................................
Section 9.04 No Violations.................................................
Section 9.05 Litigation....................................................
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SERVICER
Section 10.01 Due Organization and Authority...............................
Section 10.02 Ordinary Course of Business..................................
Section 10.03 No Conflicts.................................................
Section 10.04 Ability to Service...........................................
Section 10.05 Ability to Perform...........................................
Section 10.06 No Litigation Pending........................................
Section 10.07 No Consent Required..........................................
Section 10.08 No Untrue Information........................................
ARTICLE XI
DEFAULT
Section 11.01 Events of Default............................................
Section 11.02 Waiver of Defaults...........................................
ARTICLE XII
CLOSING
Section 12.01 Closing Documents............................................
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Notices......................................................
Section 13.02 Waivers......................................................
Section 13.03 Entire Agreement; Amendment..................................
Section 13.04 Execution; Binding Effect....................................
Section 13.05 Headings.....................................................
Section 13.06 Applicable Law...............................................
Section 13.07 Relationship of Parties......................................
Section 13.08 Severability of Provisions...................................
Section 13.09 Recordation of Assignments of Mortgage.......................
Section 13.10 Exhibits.....................................................
Section 13.11 Counterparts.................................................
Section 13.12 No Solicitation..............................................
Section 13.13 Cooperation of Servicer with a Reconstitution................
Section 13.14 Trademarks...................................................
Section 13.15 Confidentiality of Information...............................
Section 13.16 Seller Representations and Warranties........................
Section 13.17 Waiver of Trial by Jury......................................
Section 13.18 LIMITATION OF DAMAGES........................................
Section 13.19 SUBMISSION TO JURISDICTION; WAIVERS..........................
EXHIBITS
EXHIBIT 1 FORM OF MONTHLY REPORTS
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
EXHIBIT 7 FORM OF OFFICER'S CERTIFICATE
EXHIBIT 8 MORTGAGE LOAN DOCUMENTS
EXHIBIT 9 REPORTING REQUIREMENTS
EXHIBIT 10 FORM OF CONFIDENTIALITY AGREEMENT
EXHIBIT 11 FORM OF ANNUAL CERTIFICATION
EXHIBIT 12 FORM OF POWER OF ATTORNEY
EXHIBIT 13 HELLO AND GOODBYE LETTER FORMS
EXHIBIT 14 SUBPRIME DEFAULT AND REO SERVICING STANDARDS
EXHIBIT 15 REO SERVICING STANDARDS
EXHIBIT 16 FORM OF COMMITMENT LETTER
FLOW SERVICING AGREEMENT
This Flow Servicing Agreement ("Flow Servicing Agreement" or
"Agreement") is entered into as of May 1, 2005, by and between COUNTRYWIDE HOME
LOANS SERVICING LP, a Texas limited partnership (the "Servicer"), and ▇▇▇▇▇▇▇
▇▇▇▇▇ MORTGAGE COMPANY, a New York limited partnership (the "Owner").
WHEREAS, the Owner has purchased and may, from time to time,
purchase conventional, residential, fixed and adjustable rate, first and second
lien mortgage loans (the "Mortgage Loans") from various originators to be
delivered as whole loans on a servicing released basis pursuant to the related
Purchase Agreement (as defined below) by and between the Owner and Seller (as
defined below);
WHEREAS, the Servicer regularly services residential mortgage loans
and is or will be servicing the Mortgage Loans pursuant to one or more other
servicing agreements between the Owner and Servicer; and
WHEREAS, the Owner may from time to time desire that some or all of
the Mortgage Loans be serviced pursuant to the terms of this Agreement, and the
Servicer has agreed to service and administer the Mortgage Loans that become
subject to this Agreement on an "at-will" basis, and the parties desire to
provide the terms and conditions of such servicing by the Servicer.
NOW, THEREFORE, in consideration of the mutual premises and
agreements set forth herein and for other good and valuable consideration, the
receipt and the sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The following terms are defined as
follows:
Accepted Servicing Practices: With respect to any Mortgage Loan or
REO Property, each of (a) those mortgage servicing practices (including
collection procedures) of prudent mortgage lending institutions which service
mortgage loans of the same type as such Mortgage Loan in the jurisdiction where
the related Mortgaged Property is located and in compliance with all applicable
federal, state and local laws which (i) servicing practices are in compliance
with all federal, state and local laws and regulations, (ii) shall be in
accordance with the Servicer's policies and procedures as amended from time to
time for mortgage loans of the same type, (iii) are in accordance with the terms
of the Mortgage and the Mortgage Note and (iv) at a minimum based on the
requirements set forth from time to time by ▇▇▇▇▇▇ Mae.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A ▇▇▇▇▇▇ ▇▇▇ Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Ancillary Income: All income derived from the Mortgage Loans (other
than payments or other collections in respect of principal, interest, Escrow
Payments and Prepayment Penalties) including, but not limited, to all late
charges, interest received on funds deposited in the Custodial Account or any
Escrow Account (subject to applicable law), assumption fees, reconveyance fees,
subordination fees, SpeedPay fees, Mortgage Pay on the Web, ACH fees, demand
statement fees, modification fees, if any, reinstatement fees, fees received
with respect to checks on bank drafts returned by the related bank for
insufficient funds, assumption fees and other similar types of fees arising from
or in connection with any Mortgage Loan to the extent not otherwise payable to
the Mortgagor under applicable law or pursuant to the terms of the related
Mortgage Note.
Assignment, Assumption, and Recognition Agreement: The document
substantially in the form of Exhibit 6, to be executed by the Owner, the
Servicer, and the assignee of the Owner in connection with the transfer,
conveyance, grant, sale or assignment, of a Mortgage Loan.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Owner.
Best's: The current Best's Key Rating Guide.
BPO: A broker price opinion.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in (a) the States of New
York or New Jersey, or (b) the state(s) in which the Servicer's servicing
operations are located.
Code: Internal Revenue Code of 1986, as amended.
Commission: The federal Securities and Exchange Commission.
Commitment Letter: With respect to each Mortgage Loan Package, that
certain letter agreement, substantially in the form of Exhibit 16 hereto, to be
entered into between Owner and the Servicer setting forth certain business terms
relating to the Mortgage Loans in the Mortgage Loan Package subject to this
Agreement and when such Mortgage Loans are subject to a Reconstitution Agreement
for the Mortgage Loan Package.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Cut-off Date: The date set forth in the related Purchase Agreement.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 2.04.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents.
Custodian: The custodian of the Mortgage Loan Documents as specified
under the related Custodial Agreement.
Determination Date: The last day of the month preceding the related
Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to amounts collected by the Servicer and
required to be remitted to the Owner on each Remittance Date, the period
commencing on the first day of the month and ending on the last day of the month
preceding the month of the Remittance Date.
Early Payment Default: With respect to the Mortgage Loan purchased
under any Purchase Agreement, the failure of the related Mortgagor to make the
first two Scheduled Payments due the Owner within thirty (30) days of each Due
Date, or such other provision as specified by the Owner to the Servicer.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than one day prior to the Remittance Date in each month (or such other
date as permitted under this Agreement):
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America
or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America ("Direct Obligations");
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution
or trust company (including U.S. subsidiaries of foreign depositories)
incorporated or organized under the laws of the United States of America
or any state thereof and subject to supervision and examination by federal
or state banking authorities, so long as at the time of such investment or
the contractual commitment providing for such investment the commercial
paper or other short term debt obligations of such depository institution
or trust company (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the
commercial paper or other short term debt or deposit obligations of such
holding company or deposit institution, as the case may be) have been
rated by each Rating Agency in its highest short-term rating category or
one of its two highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac with any registered
broker/dealer subject to Securities Investors' Protection Corporation
jurisdiction or any commercial bank insured by the FDIC, if such
broker/dealer or bank has an uninsured, unsecured and unguaranteed
obligation rated by each Rating Agency in its highest short-term rating
category;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any state thereof which have a credit rating from each Rating Agency, at
the time of investment or the contractual commitment providing for such
investment, at least equal to one of the two highest long term credit
rating categories of each Rating Agency; provided, however, that
securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation to
exceed 20% of the aggregate principal amount of all Eligible Investments
in the Custodial Accounts and the Escrow Accounts; provided, further, that
such securities will not be Eligible Investments if they are published as
being under review with negative implications from either Rating Agency;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest bearing obligations payable on demand or on a
specified date not more than 180 days after the date of issuance thereof)
rated by each Rating Agency in its highest short-term rating category;
(vi) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities (which
obligations are backed by the full faith and credit of the United States
of America) held by a custodian in safekeeping on behalf of the holders of
such receipts; and
(vii) any other demand, money market, common trust fund or time
deposit or obligation, or interest bearing or other security or investment
rated in the highest rating category by each Rating Agency;
provided, however, that (a) any such instrument shall be acceptable to the
Rating Agencies, and (b) no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Eligible Mortgage Loan: Either (a) a mortgage loan which meets any
of the following loan characteristics: A conventional fixed rate mortgage loan
or adjustable rate mortgage loan that is either a 1st lien or closed-end 2nd
lien prime, Alt-A or subprime single family residential mortgage loan which
mortgaged property is located in the United States or (b) such other mortgage
loan products as are mutually agreed upon by the Servicer and the Owner in
writing.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Servicer pursuant to Section 2.12.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 2.06.
Escrow Payment: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 11.01.
▇▇▇▇▇▇ Mae: Federal National Mortgage Association, or any successor
thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer
pursuant to Section 2.12.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Flood Zone Service Contract: A transferable contract maintained for
a Mortgaged Property with a nationally recognized flood zone service provider
for the purpose of obtaining the current flood zone status relating to such
Mortgaged Property.
Foreclosure Commencement: The delivery of the applicable file to the
Servicer's foreclosure counsel for initiation of foreclosure proceedings.
▇▇▇▇▇▇▇ Mac: Federal Home Loan Mortgage Corporation, or any
successor thereto.
▇▇▇▇▇▇▇ Mac Transfer: Shall have the meaning set forth in Section
13.13.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, as amended, or (b) classified as a "high
cost," "threshold," "covered," "predatory" or similar loan under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees).
HOEPA: The federal Home Ownership and Equity Protection Act of 1994,
as amended.
HOEPA Loan: A Mortgage Loan which (a) the Owner has identified to
the Servicer in the Mortgage Loan Schedule as being subject to HOEPA, or (b)
which the Servicer discovers is subject to HOEPA.
Index: With respect to each Adjustable Rate Mortgage Loan, the index
set forth in the related Mortgage Note.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the
sale of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan, to the lesser of (a) the appraised value of the Mortgaged
Property at origination or (b) if the Mortgage Loan was made to finance the
acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan as to which the related
mortgage or assignment of Mortgage has been recorded in the name of MERS, as
agent for the holder from time to time of the Mortgage Note and which is
identified as a MERS Mortgage Loan on the related Mortgage Loan Schedule.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number of Mortgage Loans registered
with MERS on the MERS(R) System.
MOM Loan: Any Mortgage Loan where MERS acts as the mortgagee of
record of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Advance: Any advance made by the Servicer pursuant to
Section 3.04.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien, as applicable, on an
unsubordinated estate in fee simple in real property securing the Mortgage Note;
except that with respect to real property located in jurisdictions in which the
use of leasehold estates for residential properties is a widely-accepted
practice, the mortgage, deed of trust or other instrument securing the Mortgage
Note may secure and create a first or second lien, as applicable, upon a
leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to as the Mortgage File in Exhibit 8 annexed hereto, and any additional
documents required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or
blanket hazard insurance policy as described in Section 2.11.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual mortgage loan to be serviced pursuant
to this Agreement, as identified on the Mortgage Loan Schedule, which mortgage
loan shall be an Eligible Mortgage Loan and includes without limitation the
Mortgage File, the Monthly Payments, Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, Servicing Rights and all
other rights, benefits, proceeds and obligations arising from or in connection
with such mortgage loan, excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents listed on Exhibit 8 attached
hereto pertaining to any Mortgage Loan.
Mortgage Loan Package: A pool of Mortgage Loans to be serviced by
the Servicer hereunder and subject to the applicable Commitment Letter.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
the annual rate of interest remitted to the Owner, which shall be equal to the
Mortgage Interest Rate minus the Servicing Fee.
Mortgage Loan Schedule: The schedule of Mortgage Loans with respect
to a Mortgage Loan Package, in a form mutually agreed upon by the Owner and the
Servicer, to be delivered by the Owner to the Servicer, which schedule shall
include, but not be limited to, the following information with respect to each
Mortgage Loan: (1) the [name of the Seller and the] Seller's Mortgage Loan
identifying number; (2) the Mortgagor's name; (3) the street address of the
Mortgaged Property including the city, state and zip code; (4) a code indicating
whether the Mortgaged Property is owner-occupied, a second home or investment
property; (5) the number and type of residential units constituting the
Mortgaged Property (i.e. a single family residence, a 2-4 family residence, a
unit in a condominium project or a unit in a planned unit development,
manufactured housing); (6) the original months to maturity or the remaining
months to maturity from the related Cut-off Date, in any case based on the
original amortization schedule and, if different, the maturity expressed in the
same manner but based on the actual amortization schedule; (7) the Loan-to-Value
Ratio at origination; (8) with respect to First Lien Loans, the LTV and with
respect to Second Lien Loans, the CLTV; (9) the Mortgage Interest Rate as of the
related Cut-off Date; (10) the date on which the Monthly Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (11) the stated maturity date; (12) the amount of the
Monthly Payment as of the related Cut-off Date; (13) the last payment date on
which a Monthly Payment was actually applied to pay interest and the outstanding
principal balance; (14) the original principal amount of the Mortgage Loan; (15)
the principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date, after deduction of payments of principal due and collected
on or before the related Cut-off Date; (16) with respect to Adjustable Rate
Mortgage Loans, the Interest Rate Adjustment Date; (17) with respect to
Adjustable Rate Mortgage Loans, the Gross Margin; (18) with respect to
Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms of the
Mortgage Note; (19) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index; (20) with respect to Adjustable Rate Mortgage
Loans, the Periodic Rate Cap under the terms of the Mortgage Note; (21) with
respect to Adjustable Rate Mortgage Loans, the Periodic Rate Floor under the
terms of the Mortgage Note; (22) the type of Mortgage Loan (i.e., Fixed Rate,
Adjustable Rate, First Lien, Second Lien); (23) a code indicating the purpose of
the loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(24) a code indicating the documentation style (i.e. full, alternative or
reduced); (25) the loan credit classification (as described in the Underwriting
Guidelines); (26) whether such Mortgage Loan provides for a Prepayment Penalty;
(27) the Prepayment Penalty period of such Mortgage Loan, if applicable; (28) a
description of the Prepayment Penalty, if applicable; (29) the Mortgage Interest
Rate as of origination; (30) the credit risk score (FICO score) at origination;
(31) the date of origination; (32) the Mortgage Interest Rate adjustment period;
(33) the Mortgage Interest Rate adjustment percentage; (34) the Mortgage
Interest Rate floor; (35) the Mortgage Interest Rate calculation method (i.e.,
30/360, simple interest, other); (36) a code indicating whether the Mortgage
Loan is a Section 32 Mortgage Loan; (37) a code indicating whether the Mortgage
Loan is assumable; (38) a code indicating whether the Mortgage Loan has been
modified; (39) the one year payment history; (40) the Due Date for the first
Monthly Payment; (41) the original Monthly Payment due; (42) with respect to the
related Mortgagor, the debt-to-income ratio; (43) the Appraised Value of the
Mortgaged Property; (44) the sales price of the Mortgaged Property if the
Mortgage Loan was originated in connection with the purchase of the Mortgaged
Property; (45) the MERS identification number, (46) if the Mortgage Loan has
borrower paid, lender paid or deep primary mortgage insurance coverage and, if
so, (i) the insurer's name, (ii) the policy or certification number, (iii) the
premium rate and (iv) the coverage percentage, (47) with respect to Second Lien
Loans, the outstanding principal balance of the superior lien, (48) a code
indicating whether the Mortgage Loan is a HOEPA Loan, (49) a code indicating
whether the Mortgage Loan is a High Cost Loan, (50) a code indicating whether
the Mortgage Loan is a subject to a buydown and (51) flood zone and flood
insurance coverage information with respect to each Mortgage Loan (to the extent
known by the Owner). With respect to the Mortgage Loans in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverability Analysis: As defined in Section 3.05.
Nonrecoverable Advance: Any Servicing Advance or Monthly Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property which, in the good faith judgment of the Servicer, will not or, in the
case of a proposed advance, would not, be ultimately recoverable from related
Insurance Proceeds, Liquidation Proceeds or otherwise from such Mortgage Loan or
REO Property. The determination by the Servicer that it has made a
Nonrecoverable Advance or that any proposed Servicing Advance or Monthly
Advance, if made, would constitute a Nonrecoverable Advance shall be evidenced
by an Officer's Certificate delivered to the Owner.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or Vice President and by
the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Servicer, and delivered to the Owner.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Servicer, reasonably acceptable to the Owner, provided that any Opinion
of Counsel relating to (a) the qualification of any account required to be
maintained pursuant to this Agreement as an Eligible Account, (b) qualification
of the Mortgage Loans in a REMIC or (c) compliance with the REMIC Provisions,
must be (unless otherwise stated in such Opinion of Counsel) an opinion of
counsel who (i) is in fact independent of the related Servicer and any master
servicer of the related Mortgage Loans, (ii) does not have any material direct
or indirect financial interest in the related Servicer or any master servicer of
the related Mortgage Loans or in an Affiliate of either and (iii) is not
connected with the related Servicer or any master servicer of the Mortgage Loans
as an officer, employee, director or person performing similar functions.
Originator: With respect to a Mortgage Loan, the originator of the
related Mortgage Loan.
Other Fees: With respect to each Mortgage Loan, those fees set
forth in Commitment Letter for the specific services described therein.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase on an Interest
Rate Adjustment Date above the Mortgage Interest Rate previously in effect.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may decrease on an Interest
Rate Adjustment Date below the Mortgage Interest Rate previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Prepayment Interest Shortfall Amount: With respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part during the
Principal Prepayment Period, the amount, if any, by which one month's interest
at the related Mortgage Loan Remittance Rate on such Principal Prepayment
exceeds the amount of interest paid in connection with such Principal
Prepayment.
Prepayment Penalty: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any Principal Prepayment pursuant to the terms of such Mortgage
Loan.
Prime Rate: The prime rate announced to be in effect from time to
time, as published as the average rate in The Wall Street Journal (Northeast
edition).
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty and which is not accompanied by an amount of
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment.
Principal Prepayment Period: The month preceding the month in which
the related Remittance Date occurs.
Purchase Agreement: The agreement pursuant to which the Owner
purchased the related Mortgage Loans from the related Seller.
Qualified Depository: A depository the accounts of which are insured
by the FDIC or is otherwise acceptable to the Rating Agencies.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Owner.
Reconstitution: Either a Whole Loan Transfer or a Securitization
Transfer.
Reconstitution Agreements: As defined in Section 13.13 hereof.
Reconstitution Date: As defined in Section 13.13 hereof.
Regulation AB: Regulation AB under the Securities Act and the
Securities Exchange Act, as such regulation may be amended from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: With respect to each Mortgage Loan, the 18th day of
any month, or if such 18th day is not a Business Day, the following Business
Day.
REO Management Fee: With respect to each REO Property being managed
by the Servicer, that fee set forth in the applicable Commitment Letter.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf of the Owner through foreclosure or by deed in lieu of foreclosure, as
described in Section 2.15.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to (i) the outstanding principal balance of the Mortgage Loan as of the date of
repurchase plus (ii) interest on such outstanding principal balance at the
Mortgage Interest Rate from the date on which interest has last been paid and
distributed to the Owner to the date of repurchase, less (y) amounts received in
respect of such repurchased Mortgage Loan which are being held in the Custodial
Account for distribution in connection with such Mortgage Loan plus (z) any
costs and damages incurred by the related trust with respect to any
securitization of the Mortgage Loan in connection with any violation by such
Mortgage Loan of any predatory- or abusive-lending law.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Securities Act: The federal Securities Act of 1933, as amended.
Securities Exchange Act: The federal Securities Exchange Act of
1934, as amended.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly offered or
privately placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: With respect to each Mortgage Loan, the Seller set forth in
the related Purchase Agreement.
Servicer: Countrywide Home Loans Servicing LP or any entity which
services the Mortgage Loans pursuant to this Agreement or its successor in
interest or any successor or assign to or designee of Servicer under this
Agreement as herein provided. Unless the context requires otherwise, all
references to "Servicer" in this Agreement shall be deemed to include such
Servicer's successors in interest, assignees or designees.
Servicer Employees: As defined in Section 2.12.
Servicer Information: As defined in Section 13.13.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred (regardless if any such advance is not, in the
reasonable determination of the Servicer, a Nonrecoverable Servicing Advance
when made but, thereafter, becomes a Nonrecoverable Servicing Advance) in the
performance by the Servicer of its servicing obligations, including, but not
limited to, the cost of (a) the preservation, restoration and protection of the
Mortgaged Property or REO Property, (b) any fees relating to any enforcement or
judicial proceedings, excluding foreclosures, (c) any appraisals, valuations,
broker price opinions, inspections, or environmental assessments, (d)
foreclosure actions per FNMA attorney fees and costs guidelines, (e) the
management and liquidation of the Mortgaged Property if the Mortgaged Property
is acquired in satisfaction of the Mortgage, (f) taxes, assessments, water
rates, sewer rents and other charges which are or may become a lien upon the
Mortgaged Property, and (g) executing and recording instruments of satisfaction,
deeds of reconveyance.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the date hereof consists of the following:
(A) General servicing considerations.
(1) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
(2) If any material servicing activities are outsourced to
third parties, policies and procedures are instituted to
monitor the third party's performance and compliance
with such servicing activities.
(3) Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loan are
maintained.
(4) A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the amount
of coverage required by and otherwise in accordance with
the terms of the transaction agreements.
(B) Cash collection and administration.
(1) Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days of
receipt.
(2) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
personnel.
(3) Advances of funds or guarantees regarding collections,
cash flows or distributions, and any interest or other
fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
(4) The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g.,
with respect to commingling of cash) as set forth in the
transaction agreements.
(5) Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this criterion,
"federally insured depository institution" with respect
to a foreign financial institution means a foreign
financial institution that meets the requirements of
Rule 13k-1(b)(1) of the Securities Exchange Act.
(6) Unissued checks are safeguarded so as to prevent
unauthorized access.
(7) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate;
(B) prepared within 30 calendar days after the bank
statement cutoff date, or such other number of days
specified in the transaction agreements; (C) reviewed
and approved by someone other than the person who
prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling
items are resolved within 90 calendar days of their
original identification, or such other number of days
specified in the transaction agreements.
(C) Investor remittances and reporting.
(1) Reports to investors, including those to be filed with
the Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms
set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and
regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
(2) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
(3) Disbursements made to an investor are posted within two
business days to the Servicer's investor records.
(4) Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment,
or custodial bank statements.
(D) Mortgage loan administration.
(1) Collateral or security on mortgage loans is maintained
as required by the transaction agreements or related
mortgage loan documents.
(2) Mortgage Loans and related documents are safeguarded as
required by the transaction agreements.
(3) Any additions, removals or substitutions to the asset
pool are made, reviewed and approved in accordance with
any conditions or requirements in the transaction
agreements.
(4) Payments on mortgage loans, including any payoffs, made
in accordance with the related mortgage loan documents
are posted to the Servicer's obligor records maintained
no more than two business days after receipt and
allocated to principal, interest or other items (e.g.,
escrow) in accordance with the related mortgage loan
documents.
(5) The Servicer's records regarding the mortgage loans
agree with the Servicer's records with respect to an
obligor's unpaid principal balance.
(6) Changes with respect to the terms or status of an
obligor's mortgage loan (e.g., loan modifications or
re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements
and related mortgage loan documents.
(7) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with
the timeframes or other requirements established by the
transaction agreements.
(8) Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such records
are maintained on at least a monthly basis, or such
other period specified in the transaction agreements,
and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone
calls, letters and payment rescheduling plans in cases
where delinquency is deemed temporary (e.g., illness or
unemployment).
(9) Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based on
the related mortgage loan documents.
(10) Regarding any funds held in trust for an obligor (such
as escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents,
on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest on
such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and
state laws; and (C) such funds are returned to the
obligor within 30 calendar days of full repayment of the
related mortgage loan, or such other number of days
specified in the transaction agreements.
(11) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such
other number of days specified in the transaction
agreements.
(12) Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid from
the servicer's funds and not
(13) charged to the obligor, unless the late payment was due
to the obligor's error or omission.
(14) Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer.
(15) Delinquencies, charge-offs and uncollectable accounts
are recognized and recorded in accordance with the
transaction agreements.
(16) Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation
AB, is maintained as set forth in the transaction
agreements.
Servicing Fee: With respect to each Mortgage Loan and any Remittance
Date, an amount equal to the product of (i) one-twelfth of the Servicing Fee
Rate, and (ii) the Stated Principal Balance of such Mortgage Loan as of the
first day of the calendar month preceding the month in which such Distribution
Date occurs. Such fee shall be payable monthly and shall be pro rated for any
portion of a month during which the Mortgage Loan is serviced by the Servicer
under this Agreement. With respect to each Mortgage Loan, the Servicer shall be
entitled to receive accrued and unpaid Servicing Fees upon disposition of any
related REO Property or the date on which the Mortgage Loan is no longer
serviced by Servicer. The Servicer shall be entitled to the Servicing Fee
applicable to foreclosures through and including the month following the filing
of the claim.
Servicing Fee Rate: With respect to each Mortgage Loan, the
servicing fee rate set forth in the applicable Commitment Letter.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals, if provided, or copies of all
documents in the Mortgage File which are not delivered to the Owner, its
designee or the Custodian and copies of the Mortgage Loan Documents.
Servicing Officer: Any officer of the Servicer involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Owner upon request, as such list may from time to time be amended.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Servicer for servicing the Mortgage Loans; (c) any Ancillary Income with
respect to the Mortgage Loans; (d) all agreements or documents creating,
defining or evidencing any such servicing rights to the extent they relate to
such servicing rights and all rights of the Servicer thereunder; (e) any and all
rights to and in the Escrow Payments or other similar payments with respect to
the Mortgage Loans and any amounts actually collected by the Servicer with
respect thereto; (f) all accounts and other rights to payment related to any of
the property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Special Deposit Account: An account which the Owner and Servicer
agree shall be a special deposit account for the benefit of the related Owner
under applicable law.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and any successor thereto.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the related Cut-off Date after giving
effect to payments of principal due on or before such date, whether or not
received, minus (ii) all amounts previously distributed to the Owner with
respect to the related Mortgage Loan representing payments or recoveries of
principal or advances in lieu thereof.
Tax Service Contract: A life-of-loan tax service contract maintained
for the Mortgaged Property with a tax service provider for the purpose of
obtaining current information from local taxing authorities relating to such
Mortgaged Property.
Transfer Date: With respect to a Mortgage Loan, the date on which
the physical servicing of the Mortgage Loans is transferred from the Servicer
pursuant to this Agreement to a successor servicer.
Underwriting Guidelines: The underwriting guidelines of the
Originator, as identified or specified in the related Purchase Agreement.
Whole Loan Transfer: The sale or transfer by Owner of some or all of
the Mortgage Loans in a whole loan or participation format (including, without
limitation, a ▇▇▇▇▇▇ Mae Transfer or ▇▇▇▇▇▇▇ Mac Transfer).
ARTICLE II
SERVICING
Section 2.01 Servicer to Act as Servicer.
With respect to the Mortgage Loans in each Mortgage Loan Package,
from and after the date set forth in the applicable Commitment Letter, the
Servicer, as an independent contractor, shall service and administer the
Mortgage Loans, pursuant to the terms of this Agreement, under the Servicer's
name on a scheduled/scheduled basis, and shall have full power and authority to
do any and all things in connection with such servicing and administration which
the Servicer may deem necessary or desirable, consistent with the terms of this
Agreement and with Accepted Servicing Practices. The Servicer shall acknowledge
by email to the Owner its receipt of each Mortgage Loan Schedule and the
Servicer's assumption of the servicing responsibilities with respect to the
related Mortgage Loan Package; provided, that each Mortgaged Loan Package will
become subject to this Agreement only upon the execution and delivery of the
Commitment Letter by both the Owner and the Servicer.
The Servicer shall provide the Owner with a description of its
modification plan types. The Servicer shall not enter into any modification plan
which is not a modification plan type approved by the Owner.
Unless provided herein, Owner shall delegate authority to the
Servicer to carry out its servicing and administration duties without obtaining
Owner's prior written approval. Notwithstanding anything in this Agreement to
the contrary, the Servicer shall not (i) permit any modification with respect to
any Mortgage Loan that would change the Mortgage Interest Rate, reduce or
increase the principal balance (except for reductions resulting from actual
payments of principal) or change the final maturity date on such Mortgage Loan
(except for (A) a reduction of interest payments resulting from the application
of the Servicemembers' Civil Relief Act or any similar state laws, or (B) as
provided in the following paragraph, the Mortgagor is in default with respect to
the Mortgage Loan or such default is, in the judgment of the Servicer,
reasonably foreseeable) or (ii) except as provided in the following paragraph,
waive any Prepayment Penalty.
Consistent with the terms of this Agreement and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if applicable,
any penalty interest, or (ii) extend the due dates for the Monthly Payments due
on a Mortgage Note for a period of not greater than 180 days; provided, that any
extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 3.04 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, provided that the Servicer shall not be required to make any such
advances that are Nonrecoverable Advances. Notwithstanding the foregoing, in the
event that any Mortgage Loan is in default or, in the judgment of the Servicer,
such default is reasonably foreseeable, the Servicer, consistent with the
standards set forth in this Agreement and Accepted Servicing Practices, may also
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest, extend the final maturity date of such Mortgage Loan or waive, in
whole or in part, a Prepayment Penalty), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"); provided, however, that the terms of any Mortgage Loan may only
be waived, modified, varied or forgiven once without the consent of the Owner
while the Mortgage Loan remains outstanding. The Servicer's analysis supporting
any forbearance and the conclusion that any forbearance meets the standards of
this section shall be reflected in writing in the Servicing File. The Servicer
is hereby authorized and empowered to execute and deliver on behalf of itself
and the Owner, all instruments of satisfaction or cancellation, or of partial or
full release, discharge and all other comparable instruments, with respect to
the Mortgage Loans and with respect to the Mortgaged Properties. If reasonably
required by the Servicer, the Owner shall furnish the Servicer with a fully
executed Power of Attorney and other documents necessary or appropriate to
enable Servicer to carry out its servicing and administrative duties under this
Agreement. Servicer may request the consent of Owner in writing by certified
mail, overnight courier or such other means as may be agreed to by the parties
to a course of action that Servicer proposes to take under this Agreement.
Unless Owner shall give written notice to Servicer that it objects to any
recommended course of action within ten (10) Business Days immediately following
the day on which Owner received Servicer's written consent request (together
with its recommended course of action and relevant supporting documentation),
Owner shall be deemed to have consented to such recommended course of action,
and Servicer may take the action recommended to Owner, unless Servicer
determines, in its reasonable discretion, that such action is no longer prudent
or applicable and the Servicer notifies the Owner of such decision not to act.
In the event that Owner shall object to Servicer's recommended course of action,
Servicer shall take such action as is required by Owner, and Servicer shall have
no liability therefor if it is not negligent in performing such action. Further,
to the extent Servicer has provided Owner with reasonably timely notice, Owner
shall indemnify and hold harmless Servicer from and against any penalty, fine or
damages that may result from Owner's decision to wait for any period of time up
to ten (10) Business Days before providing Servicer with direction as to the
course of action to be taken as permitted in the second immediately preceding
sentence. In addition, notwithstanding the foregoing, the Servicer may also
waive, in whole or in part, a Prepayment Penalty if such Prepayment Penalty is
(i) not permitted to be collected by applicable law, or (ii) the enforceability
thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership or
other similar laws relating to creditor's rights or (2) due to acceleration in
connection with a foreclosure or other involuntary payment. If a Prepayment
Penalty is waived other than as permitted above, then the Servicer is required
to deposit the amount of such waived Prepayment Penalty into the Custodial
Account together with and at the time that the amount prepaid on the related
Mortgage Loan is required to be deposited into the Custodial Account; provided,
however, that the Servicer shall not have an obligation to pay the amount of any
uncollected Prepayment Penalty if the failure to collect such amount is the
direct result of inaccurate or incomplete information on the Mortgage Loan
Schedule in effect at such time. In servicing and administering the Mortgage
Loans, the Servicer shall employ procedures (including collection procedures)
and exercise the same care that it customarily employs and exercises in
servicing and administering mortgage loans for its own account, where such
procedures do not conflict with the requirements of this Agreement, and the
Owner's reliance on the Servicer. In addition, the Servicer shall retain
adequate personnel to effect such servicing and administration of the Mortgage
Loans.
The Owner may sell and transfer, in whole or in part, some or all of
the Mortgage Loans at any time and from time to time (including, without
limitation, in connection with a Securitization Transfer). Upon any such sale,
the Servicer shall execute and deliver an Assignment, Assumption and Recognition
Agreement; provided, that the Servicer shall not be obligated to recognize the
transferee of such Mortgage Loans as the assignee of the rights of the Owner
hereunder with respect to such Mortgage Loans unless such transferee executes
and delivers such Assignment, Assumption and Recognition Agreement. Upon such
execution, the Servicer shall ▇▇▇▇ its books and records to reflect the
ownership of the Mortgage Loans by such transferee. Upon such assignment of
rights and assumption of obligations, the assignee or designee shall accede to
the rights and obligations hereunder of the Owner with respect to the
transferred Mortgage Loans, except as otherwise set forth in the Assignment,
Assumption and Recognition Agreement, and the Owner shall be released from its
obligations hereunder accruing on and after the date of such transfer, but shall
remain liable for any obligations hereunder accruing prior to the date of such
transfer. Notwithstanding the foregoing, there shall not be more than three
Owners of the Mortgage Loans with respect to any particular Mortgage Loan
Package inclusive of the Mortgage Loans included in a Securitization Transfer.
The Servicer shall notify MERS of the ownership interest of Owner in
each MOM Loan through the MORNET system or MIDANET system, as applicable, or any
other comparable system acceptable to MERS. At any time during the term of this
Agreement, Owner may direct Servicer to cause any MOM Loan to be deactivated
from the MERS System.
The Servicing File maintained by the Servicer pursuant to this
Agreement shall be appropriately marked and identified in the Servicer's
computer system to clearly reflect the ownership of the related Mortgage Loan by
the Owner. The Servicer shall release from its custody the contents of any
Servicing File maintained by it only in accordance with this Agreement.
The Servicer shall be responsible for the actions of any vendors
which the Servicer utilizes to carry out its obligations hereunder and any fees
paid to such vendors shall be paid by the Servicer from its own funds.
Section 2.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 2.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Servicer shall take such action as the Servicer
shall determine reasonably to be in the best interest of the Owner in accordance
with Accepted Servicing Practices. In the event that any payment due under any
Mortgage Loan is not postponed pursuant to Section 2.01 and remains delinquent
for a period of 90 days or any other default continues for a period of 90 days
beyond the expiration of any grace or cure period (or such other period as is
required by law in the jurisdiction where the related Mortgaged Property is
located) or earlier as determined by the Servicer, the Servicer shall cause a
Foreclosure Commencement in accordance with Accepted Servicing Practices. In
such connection, the Servicer shall from its own funds make all necessary and
proper Servicing Advances, provided, however, that the Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration or preservation of any Mortgaged Property, unless it shall
determine (a) that such preservation, restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan to Owner after
reimbursement to itself for such expenses and (b) that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it shall
have priority for purposes of withdrawals from the Custodial Account pursuant to
Section 2.05) or through Insurance Proceeds (respecting which it shall have
similar priority). Notwithstanding anything herein to the contrary, no Servicing
Advance shall be required to be made hereunder if such Servicing Advance would,
if made, constitute a Nonrecoverable Advance. The determination by the Servicer
that it has made a Nonrecoverable Advance or that any proposed Servicing Advance
would constitute a Nonrecoverable Advance shall be evidenced by an Officers'
Certificate of the Servicer, delivered to the Owner which details the reasons
for such determination.
The Servicer acknowledges and agrees that it shall take and initiate
any legal actions with respect to any Mortgage Loans and REO Properties,
including, without limitation, any foreclosure actions, acceptance of
deeds-in-lieu of foreclosure, and any collection actions with respect to any
Mortgage Loans or REO Properties on behalf of the Owner, but only in the name of
the Servicer or its nominee and without reference to the Owner. Except as
otherwise required by law or with the consent of the Owner, under no
circumstances shall any such action be taken in the name of, or with any
reference to, the Owner. The Servicer shall provide prior written notice to the
Owner if the Servicer is required by applicable law to take any legal actions
with respect to the Mortgage Loan or REO Properties in the name of, or with
reference to, the Owner.
Notwithstanding the foregoing, all actions must be approved by the
Owner relating to any Mortgaged Property that is determined to be contaminated
by hazardous or toxic substances or wastes.
With respect to any HOEPA Loan which is in default, but prior to the
commencement of any loss mitigation procedures or foreclosure proceedings if a
Loan is known to be a HOEPA Loan at time of commencement of such proceedings,
the Servicer shall (A) review the related Mortgage File to determine whether or
not the Mortgage File contains the disclosure documents required by HOEPA,
whether or not such documents were executed by the related Mortgagor(s), and
whether or not such documents were executed three or more days in advance of
closing and (B) inform the Owner if such timely and executed disclosure
documents are not in the Mortgage File.
Further, prior to the commencement of any loss mitigation procedures
with respect to a HOEPA Loan, the Servicer shall notify those servicing
personnel involved in loss mitigation related to the Mortgage Loan as to whether
or not any such disclosure documentation is defective or missing.
In addition, once the Servicer determines to commence a foreclosure
proceeding with respect to a HOEPA Loan, but prior to such commencement, the
Servicer and its outside counsel shall review the Mortgage File to determine
whether or not the requirements of HOEPA shall have been satisfied in connection
with the origination, underwriting, servicing and sale of such HOEPA Loan,
including whether or not required and accurate disclosures were made to and
acknowledged by the related Mortgagor(s). Finally, the Servicer shall notify the
Owner within 3 Business Days of receipt of notice by the Servicer's proper
servicing department if at any time the Mortgagor asserts a claim or defense
based on HOEPA, whether in a written notice, as a defense to a foreclosure
proceeding, or otherwise.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure, in the event the Servicer has reasonable cause to
believe that a Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, or if the Owner otherwise requests an environmental
inspection or review of such Mortgaged Property to be conducted by a qualified
inspector the Servicer shall cause the Mortgaged Property to be so inspected.
Upon completion of the inspection, the Servicer shall promptly provide the Owner
with a written report of the environmental inspection.
After reviewing the environmental inspection report, the Owner shall
determine how the Servicer shall proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Owner directs the Servicer to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all
reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Servicer, the Servicer shall be entitled to
be reimbursed from amounts in the Custodial Account pursuant to Section 2.05
hereof. In the event the Owner directs the Servicer not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall
be reimbursed for all Servicing Advances made with respect to the related
Mortgaged Property from the Custodial Account pursuant to Section 2.05 hereof.
Section 2.03 Collection of Mortgage Loan Payments.
The Servicer shall proceed diligently to collect all payments due
under each of the related Mortgage Loans when the same shall become due and
payable and shall take special care in ascertaining and estimating Escrow
Payments, to the extent applicable, and all other charges that will become due
and payable with respect to the Mortgage Loans and each related Mortgaged
Property, to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Notwithstanding anything herein to the contrary, Servicer shall not be required
to institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note, PMI Policy or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if in
its reasonable judgment it believes that it will be unable to enforce the
provision of the Mortgage or other instrument pursuant to which payment is
required.
Section 2.04 Establishment of and Deposits to Custodial Account.
The Servicer shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans separate and apart from any of its own
funds and general assets and shall establish one or more Custodial Accounts, in
the form of time deposit or demand accounts, titled "Countywide Home Loans
Servicing LP, in trust for [Name of Owner]". The Custodial Account shall be
established with a Qualified Depository acceptable to the Owner as a Special
Deposit Account. Any funds deposited in the Custodial Account shall at all times
be fully insured to the full extent permitted by the FDIC and as otherwise
acceptable to the Rating Agencies and any amounts therein may be invested in
Eligible Investments. The creation of any Custodial Account shall be evidenced
by a certification in the form of Exhibit 2 hereto, in the case of an account
established with the Servicer, or by a letter agreement in the form of Exhibit 3
hereto, in the case of an account held by a depository other than the Servicer.
A copy of such certification or letter agreement shall be furnished to the Owner
and, upon request, to any subsequent Owner.
The Servicer shall deposit in the Custodial Account on or prior to
the second Business Day following receipt thereof, and retain therein, the
following collections received by the Servicer and payments made by the Servicer
pursuant to this Agreement:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage adjusted to
the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds and any amount received with respect
to REO Property;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 2.10 (other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with Section 2.14),
and Section 2.11;
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 2.14;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 2.15, 3.01, or 4.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to the related Purchase Agreement;
(viii) with respect to each Principal Prepayment in full or in part,
the Prepayment Interest Shortfall Amount, if any, for the month of
distribution. Such deposit shall be made from the Servicer's own funds,
without any right of reimbursement therefor up to a maximum amount per
month of one-half of the Servicing Fee actually received for such month
for the Mortgage Loans;
(ix) any Prepayment Penalties received with respect to any Mortgage
Loan; and
(x) any amounts required to be deposited by the Servicer pursuant to
Section 2.11 in connection with the deductible clause in any blanket
hazard insurance policy.
The foregoing requirements for deposit into the Custodial Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, unless otherwise provided herein, payments in the
nature of Ancillary Income need not be deposited by the Servicer into the
Custodial Account. Any interest paid on funds deposited in the Custodial Account
by the depository institution shall accrue to the benefit of the Servicer and
the Servicer may retain any such interest.
With respect to any Mortgage Loan subject to a Securitization
Transfer, the Servicer shall establish a separate custodial account for the
related securitization and deposit all amounts that have been or are
subsequently received with respect to such Mortgage Loan into the custodial
account created for the securitization on the date of the Securitization
Transfer, or as soon as possible thereafter (but not to exceed 48 hours after
such date).
Section 2.05 Permitted Withdrawals From Custodial Account.
Subject to Section 3.01, the Servicer shall be entitled to withdraw
funds from the Custodial Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the manner
provided Section 3.01;
(ii) to reimburse itself for Monthly Advances of the Servicer's
funds made pursuant to Section 3.04, the Servicer's right to reimburse
itself pursuant to this subclause (ii) being limited to amounts received
on the related Mortgage Loan (including without limitation, late
recoveries of payments from the Mortgagor, Liquidation Proceeds and
Insurance Proceeds with respect to such Mortgage Loan to the extent
collected) which represent late payments of principal and/or interest
respecting which any such advance was made; it being understood that, in
the case of any such reimbursement, the Servicer's right thereto shall be
prior to the rights of the Owner;
(iii) to pay itself the Servicing Fee from Liquidation Proceeds,
Insurance Proceeds or other amounts received with respect to the related
Mortgage Loan (to the extent the Servicer has not retained the Servicing
Fee);
(iv) to reimburse itself for unreimbursed Servicing Advances (except
to the extent reimbursed pursuant to Section 2.07), any accrued but unpaid
Servicing Fees, Other Fees and for unreimbursed advances of Servicer funds
made pursuant to Section 2.15, the Servicer's right to reimburse itself
pursuant to this subclause (iv) with respect to any Mortgage Loan being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Servicer from
the Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of any such reimbursement, the Servicer's
right thereto shall be prior to the rights of the Owner;
(v) following the liquidation of a Mortgage Loan, to reimburse
itself for (a) any unpaid Servicing Fees to the extent not recoverable
from Liquidation Proceeds, Insurance Proceeds or other amounts received
with respect to the related Mortgage Loan under Section 2.05(iii) and (b)
any unreimbursed Nonrecoverable Advances made by the Servicer in
accordance with this Agreement;
(vi) to invest funds in Eligible Investments in accordance with
Section 2.09;
(vii) to withdraw funds deposited in the Custodial Account in error;
(viii) to pay to itself any interest earned on funds deposited in
the Custodial Account (all such interest to be withdrawn monthly not later
than each Remittance Date); and
(ix) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 2.06 Establishment of and Deposits to Escrow Account. The
Servicer shall segregate and hold all funds collected and received pursuant to a
Mortgage Loan constituting Escrow Payments separate and apart from any of its
own funds and general assets and shall establish and maintain one or more Escrow
Accounts, in the form of time deposit or demand accounts, titled "Countrywide
Home Loans Servicing LP, in trust for [Name of Owner] and various Mortgagors".
The Escrow Account shall be established with a Qualified Depository as a Special
Deposit Account, in a manner which shall provide maximum available insurance by
the FDIC and as otherwise acceptable to the Rating Agencies. Funds deposited in
the Escrow Accounts may be drawn on by the Servicer in accordance with Section
2.07. The creation of any Escrow Account shall be evidenced by a certification
in the form of Exhibit 4 hereto, in the case of an account established with the
Servicer, or by a letter agreement in the form of Exhibit 5 hereto, in the case
of an account held by a depository other than the Servicer. A copy of such
certification shall be furnished to the Owner and, upon request, to any
subsequent Owner.
The Servicer shall deposit in the Escrow Account or Accounts on or
prior to the second Business Day following receipt thereof, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 2.07. Any interest paid on funds deposited in the Escrow Account by the
depository institution shall accrue to the benefit of the Servicer, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Servicer shall be responsible to pay from its own
funds interest on escrowed funds to the Mortgagor notwithstanding that the
Escrow Account may be non-interest bearing or that interest paid thereon is
insufficient for such purposes.
Section 2.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments for
the related Mortgage;
(ii) to reimburse the Servicer for any Servicing Advance made by the
Servicer pursuant to Section 2.08 with respect to a related Mortgage Loan,
but only from amounts received on the related Mortgage Loan which
represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan or
applicable federal or state law or judicial or administrative ruling;
(iv) for transfer to the Custodial Account in accordance with the
terms of the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section 2.14;
(vi) to pay the Servicer, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;
(vii) to reimburse itself for any amounts deposited in the Escrow
Account in error; and
(viii) to clear and terminate the Escrow Account on the termination
of this Agreement.
Section 2.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan that provides for Escrow
Payments, the Servicer shall maintain accurate records reflecting the status of
ground rents, taxes, assessments, water rates, sewer rents, and other charges
which are or may become a lien upon the Mortgaged Property and the status fire
and hazard insurance coverage and shall obtain, from time to time, all bills for
the payment of such charges (including renewal premiums) and shall effect
payment thereof prior to the applicable penalty or termination date, employing
for such purpose deposits of the Mortgagor in the Escrow Account which shall
have been estimated and accumulated by the Servicer in amounts sufficient for
such purposes, as allowed under the terms of the Mortgage.
To the extent that any Mortgage Loan does not provide for Escrow
Payments, the Servicer shall determine that any such payments are made by the
Mortgagor. With respect to each Mortgage Loan, subject to Accepted Servicing
Practices, the Servicer assumes full responsibility for the payment of all such
bills and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make Servicing Advances from its own funds to effect
such payments within the time period required to avoid the loss of the related
Mortgaged Property by foreclosure from a tax or other lien. Notwithstanding the
foregoing, if the Servicer reasonably determines that such Servicing Advance
would be a Nonrecoverable Advance, the Servicer shall have no obligation to make
such Servicing Advance. If Servicer fails to make a Servicing Advance with
respect to any payment prior to the date on which any late payment penalties or
costs related to protecting the lien accrue, the Servicer shall pay any such
penalties or costs within the time period required to avoid the loss of the
related Mortgaged Property by foreclosure from a tax or other lien; provided,
however, that if the Servicer reasonably determines that such Servicing Advance
would be a Nonrecoverable Advance, the Servicer shall have no obligation to make
such Servicing Advance.
Section 2.09 Protection of Accounts.
The Servicer may transfer the Custodial Account or the Escrow
Account to a different Qualified Depository from time to time. Such transfer
shall be made only upon notice to the Owner, which notice shall be provided
prior to such transfer unless such transfer is due to an emergency.
The Servicer shall bear any expenses, losses or damages sustained by
the Owner because the Custodial Account and/or Escrow Account are not demand
deposit accounts.
Amounts on deposit in the Custodial Account or Escrow Account may at
the option of the Servicer be invested in Eligible Investments. Any such
Eligible Investment shall mature no later than one day prior to the Remittance
Date in each month; provided, however, that if such Eligible Investment is an
obligation of a Qualified Depository (other than the Servicer) that maintains
the Custodial Account or the Escrow Account, then such Eligible Investment may
mature on the related Remittance Date. Any such Eligible Investment shall be
made in the name of the Servicer in trust for the benefit of the Owner. All
income on or gain realized from any such Eligible Investment shall be for the
benefit of the Servicer and may be withdrawn at any time by the Servicer. Any
losses incurred in respect of any such investment shall be deposited in the
Custodial Account or the Escrow Account, by the Servicer out of its own funds
immediately as realized. If, at any time, the amount on deposit in the Custodial
Account or the Escrow Account exceeds the amount of the applicable FDIC
insurance, such excess above the amount of the applicable FDIC insurance shall
be invested in Eligible Investments.
Section 2.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan,
hazard insurance such that all buildings upon the Mortgaged Property are insured
by a generally acceptable insurer acceptable under the ▇▇▇▇▇▇ ▇▇▇ Guides against
loss by fire, hazards of extended coverage and such other hazards as are
required to be insured pursuant to the ▇▇▇▇▇▇ Mae Guides, in an amount which is
at least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan or (b) an amount such that
the proceeds thereof shall be sufficient to prevent the Mortgagor or the loss
payee from becoming a co-insurer.
If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is, and shall continue to be, covered by a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration with a generally acceptable insurance carrier
acceptable under the ▇▇▇▇▇▇ ▇▇▇ Guides in an amount representing coverage not
less than the lesser of (i) the aggregate unpaid principal balance of the
Mortgage Loan, (ii) maximum amount of insurance which is available under the
National Flood Insurance Act of 1968, as amended (regardless of whether the area
in which such Mortgaged Property is located is participating in such program),
or (iii) the full replacement value of the improvements which are part of such
Mortgaged Property. If a Mortgaged Property is located in a special flood hazard
area and is not covered by flood insurance or is covered in an amount less than
the amount required by the National Flood Insurance Act of 1968, as amended, the
Servicer shall notify the related Mortgagor that the Mortgagor must obtain such
flood insurance coverage, and if said Mortgagor fails to obtain the required
flood insurance coverage within forty-five (45) days after such notification,
the Servicer shall immediately force place the required flood insurance on the
Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the
Servicer shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with then current ▇▇▇▇▇▇ Mae requirements, and secure from the
owner's association its agreement to notify the Servicer promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may have
a material effect on the value of the Mortgaged Property as security.
The Servicer shall cause to be maintained on each Mortgaged Property
such other or additional insurance as may be required pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance, or pursuant to the requirements of any
private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices.
In the event that the Owner or the Servicer shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Servicer shall in accordance with the ▇▇▇▇▇▇
▇▇▇ Guides make commercially reasonable efforts to communicate and consult with
the Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the desirability of protection of the Mortgaged Property.
All policies required hereunder shall name the Servicer and its
successors and assigns as a mortgagee and loss payee and shall be endorsed with
non contributory standard or New York mortgagee clauses which shall provide for
at least 30 days prior written notice of any cancellation, reduction in amount
or material change in coverage.
The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies are acceptable under the ▇▇▇▇▇▇ Mae Guides and
are licensed to do business in the jurisdiction in which the Mortgaged Property
is located. The Servicer shall determine that such policies provide sufficient
risk coverage and amounts as required pursuant to the ▇▇▇▇▇▇ ▇▇▇ Guides, that
they insure the property owner, and that they properly describe the property
address. The Servicer shall furnish to the Mortgagor a formal notice of
expiration of any such insurance in sufficient time for the Mortgagor to arrange
for renewal coverage by the expiration date; provided, however, that in the
event that no such notice is furnished by the Servicer, the Servicer shall
ensure that replacement insurance policies are in place in the required
coverages and the Servicer shall be solely liable for any losses in the event
coverage is not provided.
Pursuant to Section 2.04, any amounts collected by the Servicer
under any such policies (other than amounts to be deposited in the Escrow
Account and applied to the restoration or repair of the related Mortgaged
Property, or property acquired in liquidation of the Mortgage Loan, or to be
released to the Mortgagor, in accordance with the Servicer's normal servicing
procedures as specified in Section 2.14) shall be deposited in the Custodial
Account subject to withdrawal pursuant to Section 2.05.
Section 2.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Servicer shall obtain and maintain a blanket
policy insuring against losses arising from fire and hazards covered under
extended coverage on all of the Mortgage Loans, then, to the extent such policy
provides coverage in an amount equal to the amount required pursuant to Section
2.10 and otherwise complies with all other requirements of Section 2.10, it
shall conclusively be deemed to have satisfied its obligations as set forth in
Section 2.10. Any amounts collected by the Servicer under any such policy
relating to a Mortgage Loan shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 2.05. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 2.10, and there
shall have been a loss which would have been covered by such policy, the
Servicer shall deposit in the Custodial Account at the time of such loss the
amount not otherwise payable under the blanket policy because of such deductible
clause, such amount to be deposited from the Servicer's funds, without
reimbursement therefor. Upon request of the Owner, the Servicer shall cause to
be delivered to the Owner a certified true copy of such policy and a statement
from the insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days' prior written notice to the Owner.
Section 2.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the Mortgage Loans ("Servicer Employees"). Any such Fidelity Bond
and Errors and Omissions Insurance Policy shall be in the form of the Mortgage
Banker's Blanket Bond and shall protect and insure the Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Servicer Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Servicer against
losses in connection with the release or satisfaction of a Mortgage Loan without
having obtained payment in full of the indebtedness secured thereby. No
provision of this Section 2.12 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Servicer from its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such Fidelity Bond and Errors and Omissions Insurance Policy shall be
at least equal to the corresponding amounts required by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇
▇▇▇ Mortgage-Backed Securities Selling and Servicing Guide. Upon the request of
the Owner, the Servicer shall cause to be delivered to the Owner a certified
true copy of such Fidelity Bond and Errors and Omissions Insurance Policy.
Section 2.13 Inspections.
The Servicer shall inspect the Mortgaged Property as often as is
deemed necessary by the Servicer to assure itself that the value of the
Mortgaged Property is being preserved. In addition, if any Mortgage Loan is more
than 90 days delinquent, the Servicer shall promptly inspect the Mortgaged
Property and shall conduct subsequent inspections in accordance with Accepted
Servicing Practices; provided further that if the Servicer determines that any
Mortgaged Property is vacant, the Servicer shall promptly inspect to the
Mortgaged Property and should conduct subsequent inspections every 30 days. The
Servicer shall document on its servicing system each such inspection. The costs
of such inspections shall be treated as Servicing Advances for which the
Servicer shall be entitled to full reimbursement for in accordance with Section
2.05(iii).
Section 2.14 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Owner prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices and the terms of this
Agreement. At a minimum, the Servicer shall comply with the following conditions
in connection with any such release of Insurance Proceeds or Condemnation
Proceeds:
(i) the Servicer shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals with
respect thereto;
(ii) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
(iii) the Servicer shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Owner is named as an additional loss payee, the Servicer is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Owner.
Section 2.15 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Servicer on behalf of the Owner and without
reference to the Owner except as otherwise required by law. The Person or
Persons holding such title other than the Owner shall acknowledge in writing
that such title is being held as nominee for the Owner.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Owner solely for the purpose of its prompt disposition and
sale. In consideration therefor, the Owner shall pay the Servicer the REO
Management Fee per month as set forth in the applicable Commitment Letter. The
Servicer, either itself or through an agent selected by the Servicer, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Servicer shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Servicer deems to
be in the best interest of the Owner in accordance with Accepted Servicing
Practices. The Servicer shall provide the Owner on a monthly basis a report on
the status of each REO Property.
In consideration therefor, the Owner shall pay the Servicer the REO
Management Fee per month as set forth in the applicable Commitment Letter.
The Servicer shall use commercially reasonable efforts to dispose of
the REO Property as soon as possible and shall sell such REO Property in any
event within one year after title has been taken to such REO Property, unless
the Servicer determines, and gives an appropriate notice to the Owner to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, the Servicer shall report
monthly to the Owner as to the progress being made in selling such REO Property.
The Servicer shall also maintain on each REO Property fire and
hazard insurance with extended coverage in an amount which is at least equal to
the maximum insurable value of the improvements which are a part of such
property, liability insurance and, to the extent required and available under
the National Flood Insurance Act of 1968, as amended, flood insurance in the
amount required in Section 2.10 hereof.
The disposition of REO Property shall be carried out by the Servicer
at such price, and upon such terms and conditions, as the Servicer deems to be
in the best interests of the Owner in accordance with Accepted Servicing
Practices. The proceeds of sale of the REO Property shall be promptly deposited
in the Custodial Account pursuant to the terms of this Agreement but not later
than the second Business Day following receipt thereof. As soon as practical
thereafter, the expenses of such sale shall be paid and the Servicer shall
reimburse itself for any related unreimbursed Servicing Advances and unpaid
Servicing Fees made pursuant to this Section.
With respect to each REO Property, the Servicer shall hold all funds
collected and received in connection with the operation of the REO Property in
the Custodial Account. The Servicer shall cause to be deposited on or prior to
the second Business Day following the receipt thereof in each Custodial Account
all revenues received with respect to the conservation and disposition of the
related REO Property.
Section 2.16 Permitted Withdrawals with Respect to REO Property.
The Servicer shall withdraw funds on deposit in the Custodial
Account with respect to each related REO Property necessary for the proper
operation, management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Section 2.10 and the fees of any
managing agent acting on behalf of the Servicer. The Servicer shall make monthly
distributions on each Remittance Date to the Owner of the net cash flow from the
REO Property (which shall equal the revenues from such REO Property net of the
expenses described in Section 2.15 and of any reserves reasonably required from
time to time to be maintained to satisfy anticipated liabilities for such
expenses).
Section 2.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 2.19, the
Servicer shall furnish to the Owner on or before the 5th Business Day of each
month a report with respect to any REO Property covering the operation of such
REO Property for the previous month and the Servicer's efforts in connection
with the sale of such REO Property and any rental of such REO Property
incidental to the sale thereof for the previous month. That statement shall be
accompanied by such other information available to the Servicer as the Owner
shall reasonably request.
Section 2.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Owner pursuant to a deed in lieu of foreclosure, the
Servicer shall submit to the Owner a liquidation report with respect to such
Mortgaged Property.
Section 2.19 Reports of Foreclosures and Abandonments of Mortgaged
Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Servicer shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code.
Section 2.20 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Servicer
shall adjust the Mortgage Interest Rate on the related Interest Rate Adjustment
Date in compliance with the requirements of applicable law and the related
Mortgage and Mortgage Note. The Servicer shall execute and deliver any and all
necessary notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate and the Monthly
Payment adjustments. The Servicer shall promptly upon Owner's reasonable written
request, deliver to the Owner such notifications and any additional applicable
data regarding such adjustments and the methods used to calculate and implement
such adjustments. Upon the discovery by the Servicer, or the Owner that the
Servicer has failed to adjust a Mortgage Interest Rate or a Monthly Payment
pursuant to the terms of the related Mortgage Note and Mortgage, the Servicer
shall immediately deposit in the Custodial Account from its own funds the amount
of any interest loss caused the Owner thereby.
Section 2.21 Recordation of Assignments of Mortgage.
Except in connection with Accepted Servicing Practices for defaulted
Mortgage Loans, the Servicer shall not be responsible for the preparation or
recording of the Assignments of Mortgage relating to the Mortgage Loans to the
Owner, the securitization trustee or any other party; provided, however, that in
the event the Servicer agrees to record any mortgage assignment, any expense,
including the fees of third party service providers, incurred by the Servicer in
connection with the preparation and recordation of Assignments of Mortgage shall
be reimbursable by the Owner, or if not reimbursed by the Owner, as a Servicing
Advance. The Servicer shall not be liable for, and shall be indemnified by the
Owner, against any losses, costs, penalties and damages incurred as a result of
incorrect or incomplete, or untimely submission of, Assignments of Mortgage and
applicable recording information.
Section 2.22 Additional Servicing Requirements.
The Servicer shall comply with the following additional
requirements:
(a) Get updated FICO scores quarterly for the entire portfolio at
the Owner's expense.
(b) Apply all payments received from borrowers to principal and
interest prior to any application of advances or fees.
(c) Make staff available to participate in weekly calls to discuss
loans in default including foreclosures, bankruptcy and REO Properties.
(d) the additional requirements set forth in Exhibit 14 (in the case
of subprime Mortgage Loans) and Exhibit 15.
Section 2.23 Credit Reporting.
The Servicer shall fully furnish, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information on the Mortgagor credit files to Equifax, Experian and Trans Union
Credit Information Company (or their respective successors) on a monthly basis
and in accordance with applicable federal, state and local laws.
Section 2.24 [Reserved].
Section 2.25 Early Payment Default and Repurchase Obligations.
With respect to each Mortgage Loan, the Servicer agrees deliver to
the Owner, on or prior to the fifth Business Day of each month, a report setting
forth information with respect to (a) any Early Payment Default provisions or
(b) any prepayments in full of the Mortgage Loan.
Section 2.26 Tax and Flood Service Contracts.
The Servicer, at Owner's expense, shall cause each Mortgage Loan
which is transferred to the Servicer for servicing to be covered by (a) a Tax
Service Contract and (b) Flood Zone Service Contract. Servicer shall place such
Tax Service Contracts and Flood Service Contracts in place, and shall ▇▇▇▇ the
Owner the fee associated with acquiring such contracts as set forth in the
applicable Commitment Letter.
ARTICLE III
PAYMENTS TO OWNER
Section 3.01 Remittances.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Owner (a) all amounts deposited in the
Custodial Account related to the Due Period (net of charges against or
withdrawals from the Custodial Account pursuant to Section 2.05), plus (b) all
amounts, if any, which the Servicer is obligated to remit pursuant to Section
3.04, minus (c) any amounts attributable to Principal Prepayments received after
the applicable Principal Prepayment Period which amounts shall be remitted on
the following Remittance Date, together with any additional interest required to
be deposited in the Custodial Account in connection with such Principal
Prepayment in accordance with Section 2.04(viii), and minus (d) any amount
attributable to Monthly Payments collected but due on a Due Date or Dates
subsequent to the first day of the month in which such Remittance Date occurs,
which amounts shall be remitted on the following Remittance Date.
With respect to any funds remitted after the Business Day following
the date on which such remittance was required to be made, the Servicer shall
pay to the Owner interest on any such late payment at an annual rate equal to
the Prime Rate, adjusted as of the date of each change, plus three (3)
percentage points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be deposited in the Custodial Account by the
Servicer on the date such late payment is made and shall cover the period
commencing with the Business Day following the Business Day on which such
payment was due and ending with the Business Day on which such payment is made,
both inclusive. Such interest shall be remitted along with the distribution
payable on the next succeeding Remittance Date. The payment by the Servicer of
any such interest shall not be deemed an extension of time for payment or a
waiver of any Event of Default by the Servicer.
Section 3.02 Monthly Reports to Owner.
Not later than each Remittance Date, the Servicer shall furnish to
the Owner standard monthly reports as set forth on Exhibit 1 attached hereto in
electronic medium mutually acceptable to the parties as of the related
Determination Date. Such monthly reports shall be in electronic format and
include mortgage loan information electronically generated through Servicer's
loan administration servicing system including: (i) the actual balance as of the
last day of the related Due Period; (ii) all Principal Prepayments applied to
the Mortgagor's account during the related Principal Prepayment Period
(separately stating all related Prepayment Premiums); (iii) principal and
interest collections received during the related Due Period; (iv) the amounts of
the monthly collection that are to be remitted to Owner; (v) an identification
of Mortgage Loans that are thirty (30), sixty (60) or ninety (90) days or more
delinquent as of the end of the prior month with respect to Monthly Payments;
Mortgage Loans that are in foreclosure or bankruptcy; and (vi) Mortgage Loans
that have become REO Properties. For all purposes of this Agreement, delinquency
status shall be determined in accordance with standard ABS or RMBS methodology,
as is appropriate, as determined by the Owner for the applicable Mortgage Loan
type.
In addition, on or before March 15th of each calendar year, the
Servicer shall furnish to each Person who was a Owner at any time during such
calendar year an annual statement in accordance with the requirements of
applicable federal income tax law as to the aggregate of remittances for the
applicable portion of such year.
Such obligation of the Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Servicer pursuant to any requirements of the Internal Revenue
Code as from time to time are in force.
The Servicer shall prepare and file any and all tax returns,
information statements or other filings required to be delivered to any
governmental taxing authority or to the Owner pursuant to any applicable law
with respect to the Mortgage Loans and the transactions contemplated hereby. In
addition, the Servicer shall provide the Owner with such information concerning
the Mortgage Loans as is necessary for the Owner to prepare its federal income
tax return as the Owner may reasonably request from time to time and which is
reasonably available to the Servicer.
On the 5th Business Day of each month (the "Data Dictionary Delivery
Date"), the Servicer shall deliver to the Owner by FTP an electronic data file
incorporating the fields set forth in the on Exhibit 9 hereto (the "Data
Dictionary").
Section 3.03 Advances by Servicer.
Except as otherwise provided herein, the Servicer shall be entitled
to first priority reimbursement pursuant to Section 2.05 for Servicing Advances
and Monthly Advances from recoveries from the related Mortgagor or from all
Liquidation Proceeds and other payments or recoveries (including Insurance
Proceeds and Condemnation Proceeds) with respect to the related Mortgage Loan.
Section 3.04 Principal and Interest Advances by Servicer.
On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution, or both, an amount equal to all Monthly
Payments (with interest adjusted to the Mortgage Loan Remittance Rate) which
were due on the Mortgage Loans during the applicable Due Period and which were
delinquent on the Business Day immediately preceding such Remittance Date or
which were deferred pursuant to Section 4.01. Any amounts held for future
distribution and so used shall be replaced by the Servicer by deposit in the
Custodial Account on or before any future Remittance Date if funds in the
Custodial Account on such Remittance Date shall be less than remittances to the
Owner required to be made on such Remittance Date. The Servicer shall keep
appropriate records of such amounts. The Servicer's obligation to make such
Monthly Advances as to any Mortgage Loan will continue through the last Monthly
Payment due prior to the payment in full of the Mortgage Loan, or through the
last Remittance Date prior to the Remittance Date for the distribution of all
Liquidation Proceeds and other payments or recoveries (including Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; provided,
that the Servicer shall not be obligated to make Monthly Advances which the
Servicer determines to be Nonrecoverable Advances. The Servicer shall not be
obligated to advance shortfalls of interest resulting from the application of
the Servicemembers' Civil Relief Act or any similar state laws.
Section 3.05 Charge off and Advance Analysis.
Once a month, the Servicer will analyze, utilizing its internal
proprietary models, all first lien Mortgage Loans that are greater than 90 days
delinquent (excluding those on a forbearance plan or court approved bankruptcy
payment plan) to determine if any such Mortgage Loans should be charged off or
if future Servicing Advances should be deemed to be Nonrecoverable Advances
based on the projections of such proprietary models (the "Nonrecoverability
Analysis"). The Servicer will charge off Mortgage Loans and will not make
Servicer Advances that are deemed to be Nonrecoverable Advances based on such
Nonrecoverability Analysis; provided, however, that with respect to Mortgage
Loans included in a Reconstitution, such actions are permitted under the related
Reconstitution Agreement.
Upon reasonable prior request and without limitation on Sections
4.07 and 5.02 hereof), the Owner may during normal business hours review the
Servicer's policies and procedures related to the Nonrecoverability Analysis and
may no more than twice a year perform an audit to determine whether the Servicer
is taking actions consistent with the Nonrecoverability Analysis. The Servicer
agrees to make such reasonable changes to the Nonrecoverability Analysis as
requested by the Owner; provided, however, that with respect to Mortgage Loans
included in a Reconstitution, such changes are permitted under the related
Reconstitution Agreement.
The Servicer shall retain the Nonrecoverability Analysis for a
period of one year from the date such analysis was undertaken and shall make
such analysis available upon request to the Owner during such period.
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property.
The Servicer shall be required to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Servicer shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that the Servicer shall not exercise such
rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable
law to enforce such "due-on-sale" clause, the Servicer, shall, to the extent
permitted by applicable law, enter into (i) an assumption and modification
agreement with the person to whom such property has been conveyed, pursuant to
which such person becomes liable under the Mortgage Note and the original
Mortgagor remains liable thereon or (ii) in the event the Servicer is unable
under applicable law to require that the original Mortgagor remain liable under
the Mortgage Note and the Servicer has the prior consent of the primary mortgage
guarantee insurer, a substitution of liability agreement with the purchaser of
the Mortgaged Property pursuant to which the original Mortgagor is released from
liability and the purchaser of the Mortgaged Property is substituted as
Mortgagor and becomes liable under the Mortgage Note. If an assumption fee is
collected by the Servicer for entering into an assumption agreement, such fee
will be retained by the Servicer as additional servicing compensation. In
connection with any such assumption, neither the Mortgage Interest Rate borne by
the related Mortgage Note, the term of the Mortgage Loan nor the outstanding
principal amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Servicer
shall inquire diligently into the creditworthiness of the proposed transferee,
and shall follow Accepted Servicing Practices and the underwriting practices and
procedures of prudent mortgage lenders in the respective states where the
Mortgage Properties are located including but not limited to Servicer conducting
a review of the credit and financial capacity of the individual receiving the
property, and may approve the assumption if it believes the recipient is capable
of assuming the mortgage obligations. If the credit of the proposed transferee
does not satisfy the relevant underwriting criteria and the transfer of
ownership actually occurs, the Servicer diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate
the maturity of the Mortgage Loan.
Section 4.02 Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer shall notify the Owner in the Monthly
Remittance Advice as provided in Section 3.02, and may request the release of
any Mortgage Loan Documents from the Owner in accordance with this Section 4.02
hereof. The Servicer shall obtain discharge of the related Mortgage Loan as of
record within any related time limit required by applicable law.
In connection with any instrument of satisfaction or deed of
reconveyance, the Servicer shall be entitled to a reconveyance fee. Such
reconveyance fee shall only be reimbursable to Servicer by Owner to the extent
the reconveyance fee is uncollectible from the Mortgagor based on the terms of
the security instrument or in the Servicer's reasonable opinion that such fee is
not allowable by statute.
Servicer shall have no liability for third party delays (unless such
third party is an affiliate of the Servicer) that may result in assessed
penalties. To the extent applicable, Servicer shall ▇▇▇▇ Owner for any
reconveyance fees and recording fees uncollectible from the Mortgagor in
connection with any instrument of satisfaction or deed of reconveyance. Upon
receipt of such request, the Owner or its designee shall within five (5)
Business Days release or cause to be released the related Mortgage Loan
Documents to Servicer and Servicer shall prepare and process any satisfaction or
release. If Owner or its designee or the Custodian does not release the related
Mortgage Loan Documents to Servicer within five (5) Business Days of receipt of
request to do so, Servicer may retain a third party to complete the reconveyance
and charge Owner the actual cost of services provided by such third party.
Servicer shall have no liability for third party delays that may result in
assessed penalties.
If the Servicer satisfies or releases a Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage (or
such lesser amount in connection with a discounted payoff accepted by the
Servicer with respect to a defaulted Mortgage Loan) or should the Servicer
otherwise prejudice any rights the Owner may have under the mortgage
instruments, upon written demand of the Owner, the Servicer shall purchase the
related Mortgage Loan at an amount equal to (a) Repurchase Price, minus (b) any
costs and damages incurred by the related trust with respect to any
securitization of the Mortgage Loan in connection with any violation by such
Mortgage Loan of any predatory- or abusive-lending law by deposit thereof in the
Custodial Account within five (5) Business Days of receipt of such demand by the
Owner if the Servicer is unable to demonstrate that it will be able to cause the
amount of the unpaid indebtedness to be reinstated and secured under the related
Mortgage. The Servicer shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 2.12 insuring the Servicer against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section 4.03 Servicing Compensation.
As consideration for servicing the Mortgage Loans hereunder, the
Servicer shall be entitled to retain the applicable Servicing Fee from payments
on the Mortgage Loans or to withdraw the applicable Servicing Fee with respect
to each Mortgage Loan from the Custodial Account pursuant to Section 2.05. The
obligation of the Owner to pay, and the Servicer's right to withdraw, the
Servicing Fee is limited to, and the Servicing Fee is payable solely from, the
interest portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by Section 2.05) of such Monthly Payment
collected by the Servicer, or as otherwise provided under Section 2.05. The
Servicer shall be entitled to all accrued and unpaid Servicing Fees upon the
termination of its servicing of the related Mortgage Loans.
Additional servicing compensation in the form of Ancillary Income
shall be retained by the Servicer to the extent not required to be deposited in
the Custodial Account. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement thereof except as specifically provided for
herein.
Notwithstanding anything set forth in this section related to
Ancillary Income, the Servicer shall not collect from the Mortgagor, pass
through as an advance or as a liquidation expense any charges other than bona
fide fees, which fees must be in compliance with local law. Servicer can not add
on a processing, or review fee or any additional fee, ▇▇▇▇ up or otherwise
directly make a profit on or from services or activities rendered by a third
party or affiliate (examples include but not limited to: letters and notices,
force placed insurance, BPOs, appraisals, inspections, property preservation
costs). Servicer may collect any third party fees which are charged in
accordance with Accepted Servicing Practices.
Section 4.04 Annual Statement as to Compliance.
So long as any Mortgage Loans are being serviced hereunder, or were
serviced hereunder during the prior calendar year, the Servicer shall deliver to
the Owner, (a) on or before March 15, 2006, and, if applicable, on the related
Transfer Date an Officer's Certificate, stating that (i) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officer's supervision, and (ii) to
the best of such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof and
the action being taken by the Servicer to cure such default and (b) on or before
March 15th of each year beginning March 15, 2007, the servicer compliance
statement required by Item 1123 of Regulation AB, which as of the date hereof
requires a statement to the effect that (i) an authorized officer of the
Servicer has reviewed (or a review has been made under its supervision) of the
Servicer's activities under this Agreement during the prior calendar year and
(ii) to the best of such officers' knowledge, based on such review, the Servicer
has fulfilled all of its obligations under the Agreement in all material
respects throughout the period covered by the prior calendar year or, if there
has been a failure to fulfill any such obligation in any material respect, a
statement of such failure known to such officer and the nature and the status
thereof.
Section 4.05 Annual Independent Public Accountants' Servicing
Report.
So long as any Mortgage Loans are being serviced hereunder, or were
serviced hereunder during the prior calendar year, (a) on or before March 15,
2006, the Servicer, at its expense, shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Owner to the effect that such firm has
examined certain documents and records relating to the servicing of the Mortgage
Loans and this Agreement and that such firm is of the opinion that the
provisions of Article II and Article III have been complied with, and that, on
the basis of such examination conducted substantially in compliance with the
Single Audit Program for Mortgage Bankers, nothing has come to their attention
which would indicate that such servicing has not been conducted in compliance
therewith, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement and (b) on or before March 15th of each year beginning March 15, 2007
a report by a registered public accounting firm that attests to, and reports on,
the assessment made by the Servicer pursuant to Section 4.10, as required by
Rules 13a-18 and 15d-18 of the Securities Exchange Act, which attestation shall
be in accordance with Rule 1-02(a)(3) and Rule 2-02(g) of Regulation S-X under
the Securities Act and the Securities Exchange Act.
Section 4.06 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
With respect to any Mortgage Loans sold in a Securitization Transfer
in which the Servicer is a servicer, the Servicer agrees that on or before March
15th of each year beginning March 15, 2005, the Servicer shall deliver to the
depositor, the master servicer (if any) and the trustee for the securitization
trust created in the Securitization Transfer, and their officers, directors and
affiliates, a certification in the form attached as Exhibit 12 hereto, executed
by the senior officer in charge of servicing at the Servicer for use in
connection with any Form 10-K to be filed with the Securities and Exchange
Commission with respect to the securitization trust. The Servicer shall
indemnify and hold harmless the depositor in the Securitization Transfer, the
master servicer (if any), and the trustee, and their respective officers,
directors and Affiliates, from and against any losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments and other costs and expenses arising out of or based upon any breach
of the Servicer's obligations under this paragraph or any material misstatement
or omission, negligence, bad faith or willful misconduct of the Servicer in
connection therewith. If the indemnification provided for in the preceding
sentence is unavailable or insufficient to hold harmless any indemnified party,
then the Servicer agrees that it shall contribute to the amount paid or payable
by such indemnified party as a result of the losses, claims, damages or
liabilities of such indemnified party in such proportion as is appropriate to
reflect the relative fault of such indemnified party, on the one hand, and the
Servicer, on the other, in connection with a breach of the Servicer's
obligations under this paragraph or any material misstatement or omission,
negligence, bad faith or willful misconduct of the Servicer in connection
therewith.
Section 4.07 Right to Examine Servicer Records.
The Owner shall have the right during the term of this Agreement to
examine and audit any and all of the books, records, or other information of the
Servicer, whether held by the Servicer or by another on its behalf, with respect
to or concerning this Agreement or the Mortgage Loans, during normal business
hours or as otherwise acceptable to the Servicer, upon reasonable advance notice
and at the sole cost and expense of the Owner; provided, however, that unless
otherwise required by law, the Servicer shall not be required to provide access
to such information if the provision thereof would violate any law or legal
obligation of the Servicer including the legal right to privacy of any
Mortgagor.
Section 4.08 Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999.
With respect to each Mortgage Loan and the related Mortgagor, the
Servicer shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and all
applicable regulations and guidelines promulgated thereunder, and the Servicer
shall provide all notices required thereunder using the notice language supplied
by the Owner.
Section 4.09 On-Line Access.
The Servicer shall permit the Owner as owner of the servicing
rights, internet access to certain computer screens in the Servicer's loan
administration computer system which contain Mortgage Loan information. The
Servicer shall update such Mortgage Loan information on a "real time" basis. The
Servicer shall provide the Owner with access to the system, as well as the tools
to create and administer log-in identifications and passwords for each of its
authorized users. In accessing the Servicer's computerized loan administration
system, the Owner agrees that it will: (i) only log-in with the identification
assigned by the Servicer; (ii) correctly and completely log-off the system
immediately upon completion of each session of service; (iii) not allow any
unauthorized employee or agent of the Owner to use the assigned log-in
identification or improperly access the Servicer's computer system; (iv) keep
the assigned log-in identification and all other information enabling such
access strictly confidential; (v) not access, or attempt to access any Servicer
systems or data other than that which is specifically authorized; (vi) not
intentionally spread viruses or other malicious computer codes to the Servicer's
computer systems; (vii) not copy or infringe upon any content contained on the
Servicer's loan administration computer system; (viii) designate in writing an
administrator (an "Owner Administrator") who shall review on an annual basis the
list of employees or agents of the Owner who have been authorized to access the
Servicer's loan administration computer system and assigned log-in
identifications and passwords (each an "Authorized User"); (ix) require the
Owner Administrator in conducting its review to ensure that each Authorized User
is currently an employee or agent of the Owner and whose employment or function
as agent of the Owner requires the Authorized User to have continued access to
the Servicer's loan administration computer system; (x) require the Owner
Administrator to remove from the list of Authorized Users, and deny access to,
any individual who is not currently an employee or agent of the Owner or whose
employment or function as agent no longer requires such employee or agent of the
Owner to remain an Authorized User and to have access to the Servicer's loan
administration computer system, and (xi) deliver to the Servicer on or before
the end of the month following each anniversary of the date of execution of this
Agreement, beginning on the first such anniversary following the execution of
this Agreement, a notice stating that the Owner Administrator has conducted the
review of the list of Authorized Users required by clause (viii) above, and has
updated the list of Authorized Users as required by clause (ix) above.
The Servicer shall have no liability to the Owner in the event that
access to the Servicer's loan administration system becomes limited or otherwise
unavailable during periods of heavy use, upgrades, maintenance to address
security concerns or otherwise. The Servicer shall ensure any periods of
unavailability are limited as much as possible in frequency and amount of time.
Section 4.10 Assessment of Servicing Compliance.
The Servicer shall deliver to the Owner or its designee on or before
March 15th of each year beginning March 15, 2007 a report reasonably
satisfactory to the Owner regarding its assessment of compliance with Servicing
Criteria as required by Rules 13a-18 and 15d-18 of the Securities Exchange Act
and Item 1122 of Regulation AB, which as of the date hereof require a report by
an authorized officer of the Servicer that contains the following:
(a) A statement by such officer of its responsibility of assessing
the Servicing Criteria applicable to the Servicer;
(b) A statement by such officer that it used the Servicing Criteria
to assess compliance with the Servicing Criteria applicable to the Servicer;
(c) A statement by such officer of the Servicer's compliance with
the applicable Servicing Criteria as of the immediately preceding December 31
and for the period covered by the preceding calendar year and disclosure of any
material instance of noncompliance with respect thereto;
(d) A statement that a registered public accounting firm has issued
an attestation report on the Servicer's compliance with the applicable Servicing
Criteria as of the immediately preceding December 31, and for the period covered
by the preceding calendar year; and
(e) A statement as to which of the Servicing Criteria, if any, are
not applicable to the Servicer (which statement shall be based on the activities
it performs with respect to asset-backed securities transactions taken as a
whole involving the Servicer that are backed by the same asset type as the
Mortgage Loans).
Section 4.11 Subservicing.
The Servicer shall not hire or otherwise utilize a subservicer
hereunder without the prior written consent of the Owner and its designee. Any
such subservicer must agree in writing to comply with Sections 4.04, 4.05, 4.10
and 4.11.
ARTICLE V
SERVICER TO COOPERATE
Section 5.01 Provision of Information.
During the term of this Agreement, the Servicer shall furnish to the
Owner all reports required hereunder, and such other periodic, special, or other
reports or information, whether or not provided for herein, as shall be
necessary, reasonable, or appropriate with respect to the Owner or the purposes
of this Agreement to the extent such reports or information are readily
accessible to the Servicer without undue expense. All such reports or
information shall be provided by and in accordance with all reasonable
instructions and directions which the Owner may give and to the extent the
Servicer incurs any material cost or expense related to this Section 5.01 not
otherwise required to be incurred pursuant to this Agreement, such expense shall
be at the sole cost and expense of the Owner.
The Servicer shall execute and deliver all such instruments and take
all such action as the Owner may reasonably request from time to time to the
extent such action is in accordance with Accepted Servicing Practices, in order
to effectuate the purposes and to carry out the terms of this Agreement.
Section 5.02 Financial Statements; Servicing Facilities.
In connection with marketing the Mortgage Loans or a proposed
Reconstitution, the Owner shall make available to a prospective purchaser
audited financial statements of the consolidated group that includes the
Servicer for the most recently completed three fiscal years for which such
statements are available, as well as a Consolidated Statement of Condition at
the end of the last two fiscal years for which such statements are available
covered by any Consolidated Statement of Operations. The Servicer also shall
make available any comparable interim statements to the extent any such
statements have been prepared by or on behalf of the corporate group that
includes the Servicer (and are available upon request to the public at large).
The Servicer shall furnish to the Owner or a prospective purchaser copies of the
statements specified above.
The Servicer shall make available to the Owner or any prospective
purchaser a knowledgeable representative for the purpose of answering questions
respecting recent developments affecting the Servicer or the financial
statements of the corporate group that includes the Servicer, and to permit any
prospective purchaser (upon reasonable notice) to inspect the Servicer's
servicing facilities (no more than 12 times per year unless mutually agreed to
between the parties) for the purpose of satisfying such prospective purchaser
that the Servicer has the ability to service the Mortgage Loans as provided in
this Agreement provided that such access is necessary, reasonable, or
appropriate with respect to the Owner or the purposes of this Agreement to the
extent such access or information are readily accessible to the Servicer without
undue expense.
ARTICLE VI
TERMINATION
Section 6.01 Termination.
(a) This Agreement shall terminate upon the earlier of: (i) the
termination of the Servicer pursuant to this Section 6.01, 8.03 or 11.01, (ii)
the later of the final payment or other liquidation (or any advance with respect
thereto) of the last Mortgage Loan or the disposition of any REO Property with
respect to the last Mortgage Loan and the remittance of all funds due hereunder;
(iii) mutual consent of the Servicer and the Owner in writing; or (iv) one year
from the date hereof, unless mutually extended by the Owner and the Servicer
before the end of such one year period; provided, however, that this Agreement
shall not be terminable pursuant to this clause (iv) with respect to any
Mortgage Loans that have been subject to a Securitization Transfer.
(b) With respect to any Mortgage Loans serviced by Servicer for more
than one year that have been subject to a Securitization Transfer, Servicer
shall be entitled to a market Servicing Fee Rate for mortgage loans similar to
the Mortgage Loans, but not in excess of the servicing fee rate as set forth or
described in the pooling & servicing agreement, trust agreement, assignment
agreement or other similar document for such Securitization Transfer.
(c) The Owner may terminate, at its sole option, any rights the
Servicer may have hereunder, without cause. Any such notice of termination shall
be in writing and delivered to the Servicer by registered mail at least 30 days
prior to the effective date of termination. The Owner shall have the right to
receive and retain any proceeds upon the subsequent sale of the Servicing Rights
to any successor servicer. In the event the Owner terminates the Servicer
without cause with respect to some or all of the Mortgage Loans, with respect to
each such Mortgage Loan the Owner shall be required to pay the Servicer any
termination fee set forth in the applicable Commitment Letter. In addition, with
respect to each Mortgage Loan released from servicing, the Servicer shall be
entitled to any accrued and unpaid Servicing Fee, any outstanding and
unreimbursed Servicing Advances and Monthly Advances, and any accrued and unpaid
Ancillary Income.
(d) Notwithstanding and in addition to the foregoing, in the event
that (i) a Mortgage Loan becomes delinquent for a period of 120 days or more (a
"Delinquent Mortgage Loan") or (ii) a Mortgage Loan becomes an REO Property, the
Owner may at its election terminate this Agreement with respect to such
Delinquent Mortgage Loan or REO Property upon 30 days' written notice to the
Servicer, provided, however, upon such transfer and assignment which shall be in
accordance with all applicable laws, the Owner shall reimburse the Servicer for
its Servicing Fee, any outstanding and unreimbursed Servicing Advances, and any
other outstanding, unreimbursed fees and costs of the Servicer with respect to
such Delinquent Mortgage Loan or REO Property.
(e) In the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to the
aforementioned sections, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof (provided, that the Servicer shall
have no obligations to service the Mortgage Loan after the date which is 180
days from the date of such termination) with the same degree of diligence and
prudence which it is obligated to exercise under this Agreement, and shall take
no action whatsoever that might impair or prejudice the rights or financial
condition of its successor. Following any such termination, the Owner shall act
diligently to retain a successor servicer. The resignation or removal of the
Servicer pursuant to the aforementioned sections shall not become effective
until a successor shall be appointed by the Owner. Notwithstanding anything to
the contrary contained herein, in no event shall a termination of this Agreement
or the Servicer hereunder terminate any indemnification obligations of the
Servicer, which obligations shall survive any such termination.
Section 6.02 Transfer of Servicing.
On the Transfer Date or upon any termination of the Servicer as
Servicer pursuant to Section 6.01, the Owner, or its designee, shall assume all
servicing responsibilities related to, and the Servicer shall cease all
servicing responsibilities related to the Mortgage Loans.
On or prior to the related Transfer Date, the Servicer shall, at its
sole cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Successor Servicer, including but not limited to the following:
(a) Notice to Mortgagors. The Servicer shall mail to the Mortgagor
of each related Mortgage Loan a letter advising such Mortgagor of the transfer
of the servicing of the related Mortgage Loan to the Owner, or its designee, in
accordance with RESPA; provided, however, such letters shall be substantially in
the form attached hereto as Exhibit 14.
(b) Mortgage Loans in Foreclosure. The servicing with respect to
Mortgage Loans in foreclosure on or before the related Transfer Date shall not
be transferred from the Servicer to the Owner or the successor servicer, as the
case may be, and such Mortgage Loans shall continue to be serviced by the
Servicer pursuant to the terms of this Agreement. However, if the Owner so
elects, the Owner may waive the provisions of this paragraph (a) and accept
transfer of servicing of such Mortgage Loans and all amounts received by the
Servicer thereunder.
(c) Servicing Advances. Subject to the limitations set forth in the
definition of "Nonrecoverable Advances", the Servicer shall be entitled to be
reimbursed for all unreimbursed Servicing Advances and any other advances made
by the Servicer pursuant to this Agreement with respect to any Mortgage Loan on
the related Transfer Date, but only if the servicer after the related Transfer
Date is not the Servicer or an affiliate. In addition, the Owner shall cause the
Servicer to be reimbursed for any accrued and unpaid Servicing Fees, Other Fees
and for any trailing expenses representing Servicing Advances for which invoices
are received by the Servicer after the Transfer Date; provided, that the Owner
shall not be liable for any amounts pursuant to this paragraph unless the
Servicer has requested reimbursement and delivered appropriate evidence of such
reimbursable expense. The Owner shall cause the Servicer to be reimbursed for
such trailing expenses within ten (10) Business Days of receipt of such
documentation.
(d) Notice to Taxing Authorities and Insurance Companies. The
Servicer shall transmit to the applicable taxing authorities and insurance
companies (including primary mortgage insurance policy insurers, if applicable)
and/or agents, notification of the transfer of the servicing to the Owner, or
its designee, and instructions to deliver all notices, tax bills and insurance
statements, as the case may be, to the Owner from and after the related Transfer
Date.
(e) Delivery of Servicing Records. The Servicer shall forward to the
Owner, or its designee, all servicing records and the Servicing File in the
Servicer's possession relating to each related Mortgage Loan.
(f) Escrow Payments. The Servicer shall provide the Owner, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Servicer shall also provide the Owner with
an accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Owner to reconcile the amount of such payment
with the accounts of the Mortgage Loans. Additionally, the Servicer shall wire
transfer to the Owner the amount of any agency, trustee or prepaid Mortgage Loan
payments and all other similar amounts held by the Servicer.
(g) Payoffs and Assumptions. The Servicer shall provide to the
Owner, or its designee, copies of all assumption and payoff statements generated
by the Seller or the Servicer on the related Mortgage Loans from the related
Cut-off Date to the related Transfer Date.
(h) Mortgage Payments Received Prior to the Related Transfer Date.
Prior to the related Transfer Date all payments received by the Servicer on each
related Mortgage Loan shall be properly applied to the account of the particular
Mortgagor.
(i) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Servicer after the related Transfer
Date shall be forwarded to the Owner or its designee within two (2) Business
Days after the date of receipt. The Servicer shall notify the Owner or its
designee of the particulars of the payment, which notification requirement shall
be satisfied if the Servicer forwards with its payment sufficient information to
permit appropriate processing of the payment by the Owner or its designee. The
Servicer shall assume full responsibility for the necessary and appropriate
legal application of such Monthly Payments received by the Servicer after the
related Transfer Date with respect to related Mortgage Loans then in foreclosure
or bankruptcy; provided, for purposes of this Agreement, necessary and
appropriate legal application of such Monthly Payments shall include, but not be
limited to, endorsement of a Monthly Payment to the Owner with the particulars
of the payment such as the account number, dollar amount, date received and any
special Mortgagor application instructions and the Servicer shall comply with
the foregoing requirements with respect to all Monthly Payments received by the
it after the related Transfer Date.
(j) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the related Transfer Date and discovered after the related
Transfer Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the related
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, and such
misapplied payment was the direct result of the Servicer's error, the
Servicer shall be liable for the amount of such shortage. In such case,
the Servicer shall reimburse the Owner for the amount of such shortage
within thirty (30) days after receipt of written demand therefor from the
Owner;
(iv) If a misapplied payment which occurred prior to the related
Transfer Date has created an improper Purchase Price as the result of an
inaccurate outstanding principal balance and such misapplied payment was
the direct result of the Servicer's error, a check shall be issued to the
party shorted by the improper payment application within thirty (30) days
after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 6.02(j)
shall be accompanied by a statement indicating the Owner Mortgage Loan
identification number and an explanation of the allocation of any such
payments.
(k) Books and Records. On the related Transfer Date, the books,
records and accounts of the Servicer with respect to the related Mortgage Loans
shall be in accordance with all Accepted Servicing Practices.
On the related Transfer Date, the Servicer shall comply with all of
the provisions of this Agreement to effect a complete transfer of the servicing
with respect to the related Mortgage Loans. Except as otherwise provided in this
Agreement, on the related Transfer Date for each related Mortgage Loan, this
Agreement, except for Articles VI, VIII, IX, X and Section 13.12 which shall
survive the related Transfer Date, shall terminate with respect to such Mortgage
Loan.
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the related
Transfer Date.
Prior to the related Transfer Date, the contents of each Servicing
File are and shall be held in trust by the Servicer for the benefit of the Owner
as the owner thereof. The Servicer shall maintain in the Servicing File a hard
or electronic copy, if available, of each Mortgage Loan Document received by
Owner or Owner's designee and the originals or copies of documents not delivered
to the Owner in Servicer's possession received during the term of this
Agreement. The possession of the Servicing File by the Servicer is at the will
of the Owner for the sole purpose of servicing the related Mortgage Loan,
pursuant to this Agreement, and such retention and possession by the Servicer is
in its capacity as Servicer only and at the election of the Owner. The Servicer
shall release its custody of the contents of any Servicing File only in
accordance with written instructions from the Owner, unless such release is
required as incidental to the Servicer's servicing of the Mortgage Loans
pursuant to this Agreement, or is in connection with a repurchase of any
Mortgage Loan by the related Seller pursuant to the related Purchase Agreement.
The Servicer shall be responsible for maintaining, and shall
maintain, a complete set of books and records for each Mortgage Loan which shall
be marked clearly to reflect the ownership of each Mortgage Loan by the Owner.
In particular, the Servicer shall maintain in its possession, available for
inspection by the Owner or its designee, and shall deliver to the Owner or its
designee upon written demand, evidence of compliance with all federal, state and
local laws, rules and regulations, and requirements of ▇▇▇▇▇▇ ▇▇▇, including but
not limited to documentation as to the method used in determining the
applicability of the provisions of the National Flood Insurance Act of 1968, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and eligibility of any condominium project for approval by ▇▇▇▇▇▇ Mae and
periodic inspection reports as required by Section 2.13, as applicable.
The Servicer shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the Servicer
shall note transfers of Mortgage Loans.
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification.
(a) The Servicer agrees to indemnify and hold the Owner and any
successor servicer harmless from any liability, claim, loss or damage
(including, without limitation, any reasonable legal fees, judgments or expenses
relating to such liability, claim, loss or damage) to the Owner directly or
indirectly resulting from the Servicer's failure:
(i) to observe and perform any or all of Servicer's duties,
obligations, covenants, agreements, warranties or representations
contained in this Agreement including, without limitation, Sections 4.04,
4.05, 4.12 and 4.13; or
(ii) to comply with all applicable requirements with respect to the
servicing of the Mortgage Loans as set forth herein.
The Servicer immediately shall notify the Owner if a claim is made
by a third party with respect to this Agreement. For purposes of this Section
8.01(a), "Owner" shall mean the Person then acting as the Owner under this
Agreement and any and all Persons who previously were "Owners" under this
Agreement.
(b) The Owner agrees to indemnify and hold the Servicer harmless
from any liability, claim, loss or damage (including without limitation, any
reasonable legal fees, judgments or expenses relating to such liability, claim,
loss or damage) to the Servicer (a) directly or indirectly resulting from the
Owner's failure to observe and perform any or all of the Owner's duties,
obligations, covenants, agreements, warranties or representations contained in
this Agreement or (b) directly resulting from the Servicer taking any legal
actions with respect to any Mortgage Loans and/or REO Properties in the name of
the Servicer and without reference to the Owner, or (c) any act or omission on
the part of the Owner, any prior servicer or any other third party which
occurred in connection with the prior servicing of a Mortgage Loan, but, in each
case, only to the extent such loss does not result from the failure of the
Servicer (i) to observe and perform any or all of Servicer's duties,
obligations, covenants, agreements, warranties or representations contained in
this Agreement or in any other agreement pursuant to which the Servicer services
or has serviced any such Mortgage Loan; or (ii) to comply with all applicable
requirements with respect to the servicing of the Mortgage Loans as set forth
herein or in any other agreement pursuant to which the Servicer services or has
serviced any such Mortgage Loan.
Section 8.02 Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees
or agents of the Servicer shall be under any liability to the Owner for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment, provided, however, that
this provision shall not protect the Servicer or any such person against any
breach of warranties or representations made herein, its own negligent actions,
or failure to perform its obligations in compliance with any standard of care
set forth in this Agreement, or any liability which would otherwise be imposed
by reason of any breach of the terms and conditions of this Agreement. The
Servicer and any director, officer, employee or agent of the Servicer may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may involve it in any
expense or liability, provided, however, that the Servicer may undertake any
such action which it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto. In such event, the
Servicer shall be entitled to reimbursement from the Owner of the reasonable
legal expenses and costs of such action.
Section 8.03 Limitation on Resignation and Assignment by Servicer.
The Owner has entered into this Agreement with the Servicer and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Servicer, and the representations as to the adequacy
of its servicing facilities, plant, personnel, records and procedures, its
integrity, reputation and financial standing, and the continuance thereof.
Therefore, the Servicer shall not assign this Agreement or the servicing
hereunder or delegate its rights or duties hereunder or any portion hereof or
sell or otherwise dispose of all or substantially all of its property or assets
without the prior written consent of the Owner, which consent shall be granted
or withheld in the reasonable discretion of the Owner.
The Servicer may, without the consent of the Owner, retain third
party contractors to perform certain servicing and loan administration
functions, including without limitation, hazard insurance administration, tax
payment and administration, flood certification and administration, collection
services and similar functions; provided, that the retention of such contractors
by Servicer shall not limit the obligation of the Servicer to service the
Mortgage Loans pursuant to the terms and conditions of this Agreement.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer and the Owner or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner which Opinion of
Counsel shall be in form and substance acceptable to the Owner. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided in
Section 6.02.
Without in any way limiting the generality of this Section 8.03, in
the event that the Servicer either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or otherwise dispose of all or substantially all of its property
or assets to without the prior written consent of the Owner, then the Owner
shall have the right to terminate this Agreement upon notice given as set forth
in Section 6.01(a)(ii), without any payment of any penalty or damages and
without any liability whatsoever to the Servicer or any third party.
Notwithstanding any provision in this Agreement to the contrary, the
Servicer may at any time upon notice to the Owner, or trustee in the case of a
Reconstitution, and without the consent of any party, solely in connection with
a financing or other facility (any such arrangement, an "Advance Facility"),
assign as collateral security or pledge to another Person all its rights, title
and interest under this Agreement to its rights to reimbursement of Servicing
Advances.
Section 8.04 Assignment by Owner.
Subject to the limitations and requirements set forth in the fifth
paragraph of Section 2.01, the Owner shall have the right, to assign, in whole
or in part, its interest under this Agreement with respect to some or all of the
Mortgage Loans, and designate any person to exercise any rights of the Owner
hereunder, by executing an Assignment, Assumption and Recognition Agreement
substantially in the form of Exhibit 6 attached hereto.
Section 8.05 Merger or Consolidation of the Servicer.
The Servicer will keep in full effect its existence, rights and
franchises as a limited partnership under the laws of the state of its filing
except as permitted herein, 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, or any of the Mortgage Loans and to perform
its duties under this Agreement. Any Person into which the Servicer may be
merged or consolidated, or any corporation resulting from any merger, conversion
or consolidation (including by means of the sale of all or substantially all of
the Servicer's assets to such Person) to which the Servicer shall be a party, or
any Person succeeding to the business of the Servicer (whether or not related to
loan servicing), shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the Servicer shall not, without the prior written approval of the
Owner, be a party to any such merger, conversion or consolidation, or sell or
otherwise dispose of all or substantially all of its business or assets if, (i)
as a result of such merger, conversion or consolidation, sale or other
disposition, an Event of Default under Section 11.01 hereof would exist with
respect to such successor Servicer or (ii) such successor has (a) a residential
primary servicer rating for servicing of mortgage loans issued by Standard &
Poor's Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., Fitch,
Inc. or ▇▇▇▇▇'▇ Investors Service, Inc. below "average" or its equivalent or (b)
a net worth of less than $25,000,000.
The Servicer shall give 90 days' prior written notice to the Owner
to the extent permitted by applicable law of any such merger, conversion,
consolidation, sale or other disposition to which the Servicer proposes to be a
party. In the event that any successor entity to the Servicer fails to meet the
requirements set forth in this Section 8.04 and the Owner does not consent to
such successor becoming the servicer hereunder, then the Servicer shall have the
right to terminate this Agreement with respect to the Servicer and any such
successor upon notice given as set forth in Section 6.01, without any payment of
any termination penalty or termination damages and without any additional
liability whatsoever to the Servicer or any third party, except for liabilities
accrued under this Agreement prior to the date of termination and for
liabilities resulting from Owner's obligations hereunder, including the payment
of the Servicing Fee pursuant to Section 4.03.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF OWNER
As of the date hereof and on each date on which a Mortgage Loan
Package becomes subject to the terms of this Agreement, the Owner warrants and
represents to, and covenants and agrees with, the Servicer as follows:
Section 9.01 Organization and Good Standing; Licensing.
The Owner is a New York limited partnership duly organized, validly
existing and has the power and authority to own its assets and to transact the
business in which it is currently engaged.
Section 9.02 Authorization; Binding Obligations.
The Owner has the power and authority to make, execute, deliver and
perform this Agreement, and perform all of the transactions contemplated to be
performed by it under this Agreement, and has taken all necessary 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 Owner enforceable in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the availability
of equitable remedies.
Section 9.03 No Consent Required.
The Owner is not required to obtain the consent of any other party
or any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except such as have been obtained or made or as to which the failure
to obtain or make will not materially adversely affect the ability of the Owner
to perform all obligations hereunder.
Section 9.04 No Violations.
The execution, delivery and performance of this Agreement by the
Owner will not violate any provision of any existing law or regulation or any
order or decree of any court applicable to the Owner, except for violations that
will not adversely affect the Owner's ability to perform its obligations under
this Agreement or the certificate of incorporation of the Owner, or constitute a
material breach of any mortgage, indenture, contract or other agreement to which
the Owner is a party or by which the Owner may be bound.
Section 9.05 Litigation.
No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending or to the knowledge of the
Owner threatened, against the Owner or with respect to this Agreement, which if
adversely determined would have a material adverse effect on the transactions
contemplated by this Agreement.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SERVICER
As of the date hereof and on each date on which a Mortgage Loan
Package becomes subject to the terms of this Agreement, the Servicer warrants
and represents to, and covenants and agrees with, the Owner as follows:
Section 10.01 Due Organization and Authority.
The Servicer is a Texas limited partnership duly organized, validly
existing and in good standing under the laws of the United States as now being
conducted and is licensed, qualified and in good standing in each state where a
Mortgaged Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the
Servicer, and in any event the Servicer is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the related
Mortgage Loan in accordance with the terms of this Agreement; the Servicer has
the full power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments or transfer to be delivered pursuant to
this Agreement) by the Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Servicer; and all
requisite action has been taken by the Servicer to make this Agreement valid and
binding upon the Servicer in accordance with its terms;
Section 10.02 Ordinary Course of Business.
The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Servicer.
Section 10.03 No Conflicts.
Neither the execution and delivery of this Agreement, nor the
fulfillment of or compliance with the terms and conditions of this Agreement,
will conflict with or result in a breach of any of the terms, conditions or
provisions of the Servicer's organizational documents or any legal restriction
or any agreement or instrument to which the Servicer is now a party or by which
it is bound, or constitute a default or result in an acceleration under any of
the foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Servicer or its property is subject, or impair
the ability of the Owner to realize on the Mortgage Loans, or impair the value
of the Mortgage Loans.
Section 10.04 Ability to Service.
The Servicer has the facilities, procedures, and experienced
personnel necessary for the sound servicing of mortgage loans of the same type
as the Mortgage Loans. The Servicer is in good standing to enforce and service
mortgage loans in the jurisdiction wherein the Mortgaged Properties are located.
Section 10.05 Ability to Perform.
The Servicer does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant contained in this
Agreement.
Section 10.06 No Litigation Pending.
There is no action, suit, proceeding or investigation pending or to
the best of Servicer's knowledge threatened against the Servicer, before any
court, administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Servicer, or in any
material impairment of the right or ability of the Servicer to carry on its
business substantially as now conducted, or in any material liability on the
part of the Servicer, or which would draw into question the validity of this
Agreement, or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Servicer contemplated herein, or which
would be likely to impair materially the ability of the Servicer to perform
under the terms of this Agreement.
Section 10.07 No Consent Required.
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this
Agreement, or the servicing of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the date hereof.
Section 10.08 No Untrue Information.
No statement, report or other document relating to the Servicer
furnished or to be furnished by the Servicer pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement of material fact or omits to state a material fact necessary to make
the statements contained therein not misleading.
ARTICLE XI
DEFAULT
Section 11.01 Events of Default.
The following shall constitute an Event of Default under this
Agreement on the part of the Servicer:
(a) any failure by the Servicer to remit to the Owner any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of two (2) Business Days after the date upon which notice of such
failure is given to the Servicer, requiring the same to be remedied, shall have
been given to the Servicer by the Owner; or
(b) the failure by the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement or in the Custodial Agreement which
continues unremedied for a period of 30 days after the date on which notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Owner (the date of delivery of such notice, the "Notice Date");
provided, however, that in the case of a failure that cannot be cured within
thirty (30) days after the Notice Date, the cure period may be extended if the
Servicer can demonstrate to the reasonable satisfaction of the Owner that the
failure can be cured and the Servicer is diligently pursuing remedial action; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of 60 days; or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) the Servicer fails to maintain its license to do business or
service residential mortgage loans in any jurisdiction where the Mortgaged
Properties are located for more than thirty (30) days after receiving notice
from any Person thereof; or
(g) Any reduction, withdrawal or qualification of the servicing
credit of the Servicer by any Rating Agency which results in the inability of
the Servicer to act as a primary or special servicer for any mortgage-backed or
asset-backed transaction rated or to be rated by any such Rating Agency; or
(h) the Servicer attempts to assign its right to servicing
compensation hereunder or the Servicer attempts, without the consent of the
Owner, to sell or otherwise dispose of all or substantially all of its property
or assets or to assign this Agreement or the servicing responsibilities
hereunder or to delegate its duties hereunder or any portion thereof in a manner
not permitted under this Agreement.
In each and every such case, so long as an Event of Default shall not have been
remedied, in addition to whatsoever rights the Owner may have at law or equity
to damages, including injunctive relief and specific performance, the Owner, by
notice in writing to the Servicer, may terminate without compensation all the
rights and obligations of the Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof.
Upon receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the successor
appointed pursuant to Section 6.02. Upon written request from the Owner, the
Servicer shall prepare, execute and deliver any and all documents and other
instruments, place in such successor's possession all Mortgage Files to the
extent initially provided to the Servicer, and 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, at the Servicer's sole
expense or as otherwise provided under Accepted Servicing Practices. The
Servicer agrees to cooperate with the Owner and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to such successor for administration by it of
all cash amounts which shall at the time be credited by the Servicer to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.
Section 11.02 Waiver of Defaults.
The Owner may waive any default by the Servicer in the performance
of its obligations hereunder and its consequences. Upon any such waiver of a
past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
ARTICLE XII
CLOSING
Section 12.01 Closing Documents.
The Closing Documents shall consist of fully executed originals of
the following documents:
1. this Agreement;
2. a Custodial Account Letter Agreement or a Custodial Account
Certification, as applicable, as required hereunder, in the
form of either Exhibit 2 or 3 hereto;
3. an Escrow Account Letter Agreement or an Escrow Account
Certification, as applicable, as required hereunder, in the
form of either Exhibit 4 or 5 hereto;
4. an Officer's Certificate, in the form of Exhibit 7 hereto,
with respect to the Servicer, including all attachments
thereto.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Notices.
All notices, requests, demands and other communications which are
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given upon the delivery or mailing thereof, as
the case may be, sent by registered or certified mail, return receipt requested:
(a) If to Owner to:
▇▇▇▇▇▇▇ Sachs Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ Sachs Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(b) If to Servicer:
Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ SV3-A
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇
With a copy to:
Countrywide Home Loans, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department
Section 13.02 Waivers.
Any of the Servicer or the Owner may upon consent of all parties, by
written notice to the others:
(a) Waive compliance with any of the terms, conditions or covenants
required to be complied with by the others hereunder; and
(b) Waive or modify performance of any of the obligations of the
others hereunder.
The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other subsequent
breach.
Section 13.03 Entire Agreement; Amendment.
This Agreement, including all documents and exhibits incorporated by
reference herein, constitutes the entire agreement between the parties with
respect to servicing of the Mortgage Loans. This Agreement may be amended and
any provision hereof waived, but, only in writing signed by the party against
whom such enforcement is sought.
Section 13.04 Execution; Binding Effect.
This Agreement may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Sections 8.02 and 8.03, this
Agreement shall inure to the benefit of and be binding upon the Servicer and the
Owner and their respective permitted successors and assigns.
Section 13.05 Headings.
Headings of the Articles and Sections in this Agreement are for
reference purposes only and shall not be deemed to have any substantive effect.
Section 13.06 Applicable Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES), EXCEPT TO THE EXTENT PREEMPTED
BY FEDERAL LAW.
Section 13.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties. The duties and
responsibilities of the Servicer shall be rendered by it as an independent
contractor and not as an agent of the Owner. The Servicer shall have full
control of all of its acts, doings, proceedings, relating to or requisite in
connection with the discharge of its duties and responsibilities under this
Agreement.
Section 13.08 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
Section 13.09 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage 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, such recordation to be
effected by the Owner or the Owner's designee.
Section 13.10 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are integral parts of this Agreement.
Section 13.11 Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 13.12 No Solicitation.
The Owner and the Servicer each agree that it will not take any
action or permit or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors on its behalf, to personally, by
telephone or mail, solicit the borrower or obligor under any Mortgage Loan for
the purpose of refinancing such Mortgage Loan, provided, that the Servicer may
solicit any mortgagor for whom the Servicer has received a mortgagor initiated
request for verification of mortgage, a request for demand for payoff, a
mortgagor initiated written or verbal communication indicating a desire to
prepay the related Mortgage Loan, or the mortgagor initiates a title search,
provided further, that the Servicer is not prohibited from responding to
unsolicited requests or inquiries made by a mortgagor or an agent of a
mortgagor. Notwithstanding the foregoing, the following solicitations, if
undertaken by the or Servicer or any affiliate of the Servicer, shall not be
prohibited: (i) solicitations which are directed to the general public at large,
including, without limitation, mass mailing based on commercially acquired
mailing lists, newspaper, radio and television advertisements and other mass
media advertisements, (ii) promotions undertaken by the Servicer or any of its
affiliates which concern optional insurance products (other than single premium
credit life insurance) and (iii) borrower messages included on, and statement
inserts provided with, the monthly statements sent to mortgagors; provided,
however, that similar messages and inserts are sent to the borrowers of other
mortgage loans owned by a multitude of Persons other than the Owner which are
serviced by the Servicer.
Section 13.13 Cooperation of Servicer with a Reconstitution.
(a) The Servicer and the Owner agree that with respect to some or
all of the Mortgage Loans, on one or more dates (each a "Reconstitution Date")
at the Owner's sole option, the Owner may effect a sale (each, a
"Reconstitution") of some or all of the Mortgage Loans then subject to this
Agreement, without recourse, to:
(i) ▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "▇▇▇▇▇▇ Mae Transfer"); or
(ii) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
With respect to each Whole Loan Transfer, Agency Transfer or
Securitization Transfer, as the case may be, entered into by the Owner:
(b) The Servicer agrees to execute (i) in connection with any Agency
Transfer, any and all pool purchase contracts, and/or agreements reasonably
acceptable to the Servicer among the Owner, the Servicer, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac (as the case may be) and any servicer, (ii) in connection with a Whole Loan
Transfer, a warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Servicer, and (iii)
in connection with a Securitization Transfer, a pooling and servicing agreement
or other similar agreement in form and substance reasonably acceptable to the
Servicer (collectively the agreements referred to herein are designated, the
"Reconstitution Agreements"); provided that provisions of such Reconstitution
Agreements will not contain any substantially greater obligations of, or any
substantially lower benefits to, the Servicer than those contained in this
Agreement and each of the Servicer and Owner is given an opportunity to review
and reasonably negotiate in good faith the content of such provisions (which
shall not be more onerous than those required under this Agreement) including,
but not limited to servicing representations and warranties (dated as of the
settlement or closing date in connection with such Reconstitution (each, a
"Reconstitution Date")) related to the Mortgage Loans for the period of time
from the date on which the Servicer began servicing the Mortgage Loans through
the Reconstitution Date to the effect that (a) the Servicer has serviced the
Mortgage Loans in accordance with this Agreement and has provided accurate "paid
through" data with respect to the Mortgage Loans to the Owner, (b) except as
reflected in the "paid through" data delivered to the Owner, there is no payment
default existing under any Mortgage or any Mortgage Note as of the cut-off date
for the Reconstitution, and (c) to the best of the Servicer's knowledge, there
is no non-payment default existing under any Mortgage or Mortgage Note, or any
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a non-payment default, breach, violation
or event which would permit acceleration as of the closing date for the
Reconstitution; and representations and warranties (dated as of the
Reconstitution Date); and, provided, further, that each of the Servicer and the
Owner is given an opportunity to review and reasonably negotiate in good faith
the content of any such documents not specifically referenced or provided for
herein. Servicer shall cooperate in good faith in negotiating any delinquency
and cumulative loss termination triggers in the Reconstitution Agreement.
(c) With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Owner, the Servicer agrees (1) to cooperate with
the Owner and any prospective purchaser with respect to all reasonable requests
and due diligence procedures including participating in meetings with rating
agencies, bond insurers and such other parties as the Owner shall designate and
participating in meetings with prospective purchasers of the Mortgage Loans or
interests therein and providing information reasonably requested by such
purchasers; (2) to execute, deliver and perform all Reconstitution Agreements
required by the Owner; (3) (a) to restate the representations and warranties set
forth in this Agreement as of the Reconstitution Date which shall not be more
onerous than those required under this Agreement or (b) make the representations
and warranties with respect to the servicing of the Mortgage Loans set forth in
the related selling/servicing guide of the master servicer or issuer, as the
case may be, or such representations and warranties with respect to the
servicing of the Mortgage Loans as may be required by any Rating Agency or
prospective purchaser of the related securities or such Mortgage Loans, in
connection with such Reconstitution; provided, however, that such
representations and warranties shall not be more onerous than those required
under this Agreement. The Servicer shall use its reasonable best efforts to
provide to such master servicer or issuer, as the case may be, and any other
participants in such Reconstitution: (i) any and all information and appropriate
verification of information which may be reasonably available to the Servicer or
its affiliates, whether through letters of its auditors and counsel or
otherwise, as the Owner or any such other participant shall reasonably request
and (ii) subject to the provisions of Section 13.13(b), to execute, deliver and
satisfy all conditions set forth in any indemnity agreement required by the
Owner or any such participant.
(d) In connection with any Securitization Transfer, the Servicer
shall, if requested by the Owner or its designee, deliver to the Owner or its
designee within 7 Business Days after such request information with respect to
such Servicer information reasonably requested by the Owner or its designee and
the information set forth under Item 1108(b) of Regulation AB (collectively, the
"Servicer Information"), which as of the date hereof includes:
(i) a description of the Servicer's form of organization;
(ii) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer's
experience in servicing assets of any type as well as a more detailed
discussion of the Servicer's experience in, and procedures for the
servicing function it will perform under the Servicing Agreement; material
information regarding the size, composition and growth of the Servicer's
portfolio of mortgage loans of the type similar to the Mortgage Loans and
information on factors related to the Servicer that may be material to any
analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable (including, without limitation,
whether any prior securitizations of mortgage loans of the type similar to
the Mortgage Loans involving the Servicer have defaulted or experienced an
early amortization or other performance triggering event because of
servicing, the extent of outsourcing the Servicer utilizes or if there has
been previous disclosure of material noncompliance with Servicing Criteria
with respect to other securitizations involving the Servicer);
(iii) a description of any material changes to the Servicer's
policies or procedures in the servicing function it will perform in under
the Agreement for mortgage loans of the type similar to the Mortgage Loans
during the past three years; and
(iv) information regarding the Servicer's financial condition to the
extent that there is a material risk that the effect on one or more
aspects of servicing resulting from such financial condition could have a
material impact on the performance of the pool of Mortgage Loans or
performance of the related asset-backed securities.
(e) The Servicer shall indemnify the Owner, any party acting as
depositor in any Securitization Transfer, each Person who controls the Owner or
such depositor, and each underwriter and placement agent in any Securitization
Transfer, and hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to any information provided by or on behalf of the
Servicer regarding the Servicer Information. For purposes of the previous
sentence, "Owner" shall mean the Person then acting as the Owner under this
Agreement and any and all Persons who previously were "Owners" under this
Agreement. The Owner shall indemnify the Servicer and each Person who controls
the Servicer and hold each of them harmless from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and any other costs, fees and expenses that each of
them may sustain in any way related to any information provided by the Owner in
any offering document prepared in connection with any Reconstitution.
(f) The Servicer shall execute one or more subservicing agreements
between the Servicer and the Owner and/or any master servicer which is generally
considered to be a prudent master servicer in the secondary mortgage market,
designated by the Owner in its sole discretion after consultation with the
Servicer and/or one or more custodial and servicing agreements among the Owner,
the Servicer and a third party custodian/trustee which is generally considered
to be a prudent custodian/trustee in the secondary mortgage market designated by
the Owner in its sole discretion after consultation with the Servicer, in either
case for the purpose of pooling the Mortgage Loans with other mortgage loans not
the subject of this Agreement in connection with a Reconstitution; and
(g) Any execution of a subservicing agreement or Reconstitution
Agreement by the Servicer shall be conditioned on the Servicer receiving the
Servicing Fee or such other servicing fee acceptable to Servicer.
Notwithstanding any provision to the contrary in this Agreement, in the event
that the Servicer is the master servicer, servicer or sub-servicer with respect
to a Reconstitution, the Owner agrees that in such Reconstitution any servicing
performance termination triggers shall be approved by the Servicer in its
reasonable discretion; provided, that in the event that the Servicer does not
approve any servicing performance termination triggers, the Owner shall have the
right to terminate the Servicer hereunder (a "Servicing Performance Trigger
Termination") and designate a successor servicer to act as master servicer,
servicer or sub-servicer with respect to the Reconstitution, subject to payment
of any termination fee as set forth in the applicable Commitment Letter,
pursuant to Section 6.01(b). All Mortgage Loans not sold or transferred pursuant
to a Whole Loan Transfer or Pass-Through Transfer shall be subject to this
Agreement and shall continue to be serviced in accordance with the terms of this
Agreement and with respect thereto this Agreement shall remain in full force and
effect.
(h) All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect. Any execution of a
Reconstitution Agreement by the Servicer shall be conditioned on the Servicer
receiving the Servicing Fee or such other servicing fee acceptable to Servicer.
Notwithstanding any provision to the contrary in this Agreement, in the event
that the Servicer is the master servicer, servicer or sub-servicer with respect
to a Reconstitution, the Owner agrees that in such Reconstitution any servicing
performance termination triggers shall be included upon approved by the Servicer
in its reasonable discretion.
(i) The Owner agrees to execute a confidentiality agreement in the
form of Exhibit 10 hereto prior to any Securitization Transfer and that its
obligation under this clause (i) may not be assigned.
Section 13.14 Trademarks.
The Owner and the Servicer agree that they and their employees,
subcontractors and agents, shall not, without the prior written consent of the
other party in each instance, (i) use in advertising, publicity or otherwise the
name of each and every other party to this Agreement or their Affiliates or any
of their managing directors, partners or employees, nor any trade name,
trademark, trade device, service ▇▇▇▇, symbol or any abbreviation, contraction
or simulation thereof owned by the other party or their Affiliates, or (ii)
represent, directly or indirectly, any product or any service provided by the
Owner and the Servicer as approved or endorsed by the other parties to this
Agreement or their Affiliates.
Section 13.15 Confidentiality of Information.
If, during the term of this Agreement, Owner requests that Servicer
provide to Owner non-public, confidential information related to Servicer and
other affiliates of Servicer (collectively, "Countrywide"), and if Countrywide,
in its sole discretion agrees to provide this information, the parties agree
that they shall enter into a confidentiality agreement in form and substance
mutually agreeable to the parties prior to the release of such information
(which obligation shall not be assigned by the Owner).
Section 13.16 Seller Representations and Warranties
The Owner hereby covenants that, as of the date of the related
Commitment Letter, the Servicer shall be the successor servicer of the Mortgage
Loans under the related Purchase Agreement or the Seller shall have executed an
acknowledgment agreement and in both cases, without further steps having to be
taken by the Owner, the Seller or the Servicer, the Servicer is entitled to (a)
the benefit of the representations and warranties made by the Seller to the
Owner in the related Purchase Agreement and (b) the rights and remedies
available to the Owner under such Purchase Agreement with respect to such
representations and warranties (including, but not limited to, the right to
enforce the Seller's indemnification obligations under the Purchase Agreement).
Upon request of the Servicer, the Owner shall deliver to the Servicer the
related acknowledgment agreement, Purchase Agreement or any revisions to the
Owner's seller guide.
Section 13.17 Waiver of Trial by Jury.
THE SERVICER AND THE OWNER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 13.18 LIMITATION OF DAMAGES.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE
PARTIES AGREE THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES WHATSOEVER, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR ANY OTHER LEGAL OR EQUITABLE
PRINCIPLE, PROVIDED, HOWEVER, THAT SUCH LIMITATION SHALL NOT BE APPLICABLE WITH
RESPECT TO THIRD PARTY CLAIMS MADE AGAINST A PARTY.
Section 13.19 SUBMISSION TO JURISDICTION; WAIVERS.
The Servicer and the Owner hereby irrevocably and unconditionally:
(a) SUBMITS FOR ITSELF IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO ▇▇▇ IN ANY OTHER JURISDICTION.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the date
first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
(Owner)
By: ▇▇▇▇▇▇▇ SACHS REAL ESTATE
FUNDING CORP., its General Partner
By:____________________________________
Name:_______________________________
Title:______________________________
COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited partnership
(Servicer)
By: COUNTRYWIDE GP, INC., general
partner
By:____________________________________
Name:_______________________________
Title:______________________________
EXHIBIT 1
MONTHLY REPORTS
Trial Balance
Remittance
Delinquency
EXHIBIT 2
CUSTODIAL ACCOUNT CERTIFICATION
_______ __, 200_
The Servicer hereby certifies that it has established the account
described below as a Custodial Account pursuant to Section 2.04 of the Flow
Servicing Agreement, dated as of May 1, 2005, Fixed and Adjustable Rate Mortgage
Loans. The Custodial Account shall be a Special Deposit Account.
Title of Account: Countrywide Home Loans Servicing LP, in trust
for "▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company."
Account Number: _____________________
Address of office or branch
of the Servicer at
which Account is maintained:______________________________
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer
By:____________________________________
Name:_______________________________
Title:______________________________
Date:_______________________________
EXHIBIT 3
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 200_
To:______________________________
______________________________
______________________________
(the "Depository")
As Servicer under the Flow Servicing Agreement, dated as of May 1,
2005, Fixed and Adjustable Rate Mortgage Loans (the "Agreement"), we hereby
authorize and request you to establish an account, as a Custodial Account
pursuant to Section 2.04 of the Agreement, to be designated "Countrywide Home
Loans Servicing LP, as servicer, in trust for [Name of Owner]" All deposits in
the account shall be subject to withdrawal therefrom by order signed by the
Servicer. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter is
submitted to you in duplicate. Please execute and return one original to us.
COUNTRYWIDE HOME LOANS SERVICING LP
Servicer
By:____________________________________
Name:_______________________________
Title:______________________________
Date:_______________________________
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The Custodial Account shall be a Special Deposit
Account. The full amount deposited at any time in the account will be insured by
the Federal Deposit Insurance Corporation.
_______________________________________
Depository
By:____________________________________
Name:_______________________________
Title:______________________________
Date:_______________________________
EXHIBIT 4
ESCROW ACCOUNT CERTIFICATION
_________ ___, 200_
________________________ hereby certifies that it has established
the account described below as an Escrow Account pursuant to Section 2.06 of the
Flow Servicing Agreement, dated as of May 1, 2005, Fixed and Adjustable Rate
Residential Mortgage Loans. The Escrow Account shall be a Special Deposit
Account.
Title of Account: "Countrywide Home Loans Servicing LP, in trust
for [Name of Owner], and various Mortgagors."
Account Number: ___________________
Address of office or
branch
of the Servicer at
which Account is maintained:_________________________
____________________________________
____________________________________
____________________________________
COUNTRYWIDE HOME LOANS SERVICING LP
Servicer
By:____________________________________
Name:_______________________________
Title:______________________________
Date:_______________________________
EXHIBIT 5
ESCROW ACCOUNT LETTER AGREEMENT
_______ ___, 200_
To: _____________________________
_____________________________
_____________________________
(the "Depository")
As Servicer under the Flow Servicing Agreement, dated as of May 1,
2005, Fixed and Adjustable Rate Residential Mortgage Loans (the "Agreement"), we
hereby authorize and request you to establish an account, as an Escrow Account
pursuant to Section 2.06 of the Agreement, to be designated as "Countrywide Home
Loans Servicing LP, in trust for [Name of Owner], and various Mortgagors." All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Servicer. You may refuse any deposit which would result in violation of
the requirement that the account be fully insured as described below. This
letter is submitted to you in duplicate. Please execute and return one original
to us.
COUNTRYWIDE HOME LOANS SERVICING LP
Servicer
By:____________________________________
Name:_______________________________
Title:______________________________
Date:_______________________________
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The Escrow Account shall be a Special Deposit
Account. The full amount deposited at any time in the account will be insured by
the Federal Deposit Insurance Corporation.
-------------------------
Depository
By:____________________________________
Name:_______________________________
Title:______________________________
Date:_______________________________
EXHIBIT 6
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated
______________("Agreement"), among ▇▇▇▇▇▇▇ Sachs Mortgage Company ("Assignor"),
GS Mortgage Securities Corp. ("Assignee") and Countrywide Home Loans Servicing
LP (the "Company").
__________________For and in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. Assignment, Assumption and Conveyance
The Assignor hereby conveys, sells, grants, transfers and assigns to
the Assignee all of the right, title and interest (other than those rights
specifically retained by the Assignor pursuant to this Agreement) of the
Assignor, as purchaser, in, to and under (a) those certain Mortgage Loans listed
on the schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans"), and (b) solely insofar as it relates to the Mortgage Loans,
that certain Flow Servicing Agreement, dated as of May [__] 2005 (the "Servicing
Agreement"), by and between the Assignor (in such capacity, the "Owner") and the
Company. The Assignor hereby agrees that it will (i) deliver possession of notes
evidencing the Mortgage Loans to, or at the direction of, the Assignee or its
designee and (ii) take in a timely manner all necessary steps under all
applicable laws to convey and to perfect the conveyance of the Mortgage Loans as
required under the Pooling Agreement (as defined below).
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Servicing Agreement that are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement, (ii) any
rights and obligations of the Assignor pursuant to the Servicing Agreement
arising prior to the date hereof, (iii) the rights and obligations of the Owner
under Section 6.01(b) (relating to the Owner's right to terminate the Company),
Section 4.09 (relating to the Owner's right to receive information from the
Servicer) and Sections 13.13(i) and 13.15 (relating the Owner's obligation to
execute certain confidentiality agreements) or (iv) any rights of the Assignor
under the Commitment Letter, dated as of [_____ __], 200[_] (the "Commitment
Letter") between the Owner and the Company, which rights shall survive the
execution and delivery of this Agreement.
The Assignee hereby assumes all of the Assignor's obligations under
the Mortgage Loans and the Servicing Agreement solely insofar as such
obligations relate to the Mortgage Loans, other than the obligations set forth
in clauses (ii) and (iii) of the preceding paragraph.
The parties hereto agree that, notwithstanding anything to the
contrary contained in the Commitment Letter, with respect to the Mortgage Loans
being serviced under the Servicing Agreement: (a) the Servicing Fee Rate for the
Mortgage Loans shall be the rate set forth on the Mortgage Loan Schedule, (b)
the REO Management Fee for the Mortgage Loans shall be [__], (c) [the Other Fees
with respect to the Mortgage Loans shall include ___] and (d) the fee upon
termination of the Company as Servicer of the Mortgage Loans shall be [__]%.
2. Recognition of the Company
From and after the date hereof (the "Securitization Closing Date"),
the Company shall and does hereby recognize that the Assignee will transfer the
Mortgage Loans and assign its rights under the Servicing Agreement (solely to
the extent set forth herein) and this Agreement to _____________________, as
trustee (including its successors in interest and any successor trustees under
the Pooling Agreement, the "Trustee"), of the __________________ (the "Trust")
created pursuant to a Pooling and Servicing Agreement or Trust Agreement, dated
as of _________________ (the "Pooling Agreement"), among the Assignee, the
Trustee and ____________________, as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans and the
Servicer will be the servicer of the Mortgage Loans on or after the applicable
Transfer Date pursuant to the terms set forth in the Pooling Agreement, (ii) the
Company shall look solely to the Trust (including the Trustee and the Servicer
acting on the Trust's behalf) for performance of any obligations of the Assignor
under the Mortgage Loans and the Servicing Agreement (solely insofar as it
relates to the Mortgage Loans) (except for such obligations of the Assignor
retained by the Assignor hereunder), (iii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) shall have all the rights and
remedies available to the Assignor, insofar as they relate to the Mortgage
Loans, under the Purchase Agreement and the Servicing Agreement, including,
without limitation, the enforcement of the document delivery requirements set
forth in Section 6.03 of the Purchase Agreement, and shall be entitled to
enforce all of the obligations of the Company thereunder insofar as they relate
to the Mortgage Loans, including without limitation, the remedies for breaches
of representations and warranties set forth in Article 10 of the Servicing
Agreement (except for the rights and remedies retained by the Assignor
hereunder), (iv) all references to the Owner under the Servicing Agreement
insofar as they relate to the Mortgage Loans shall be deemed to refer to the
Trust (except to the extent of the rights and obligations retained by the
Assignor hereunder) (including the Trustee and the Servicer acting on the
Trust's behalf) and (v) the Mortgage Loans will be part of a REMIC, and the
Company shall service the Mortgage Loans and any real property acquired upon
default thereof (including, without limitation, making or permitting any
modification, waiver or amendment of any term of any Mortgage Loan) prior to the
applicable Transfer Date in accordance with the Servicing Agreement but in no
event in a manner that would (A) cause the REMIC to fail to qualify as a REMIC
or (B) result in the imposition of a tax upon the REMIC (including but not
limited to the tax on prohibited transactions as defined in Section 860F(a)(2)
of the Code, the tax on contributions to a REMIC set forth in Section 860G(d) of
the Code, and the tax on "net income from foreclosure property" as set forth in
Section 860G(c) of the Code). Neither the Company nor the Assignor shall amend
or agree to amend, modify, waiver, or otherwise alter any of the terms or
provisions of the Servicing Agreement which amendment, modification, waiver or
other alteration would in any way affect the Mortgage Loans or the Company's
performance under the Servicing Agreement with respect to the Mortgage Loans
without the prior written consent of the Trustee.
3. Representations and Warranties of the Company
The Company warrants and represents to and covenants with, the
Assignor, the Assignee and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under this Agreement and the
Servicing Agreement The execution by the Company of this Agreement is in
the ordinary course of the Company's business and will not conflict with,
or result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any material
agreement or instrument to which the Company is now a party or by which it
is bound, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Company or its property is subject. The
execution, delivery and performance by the Company of this Agreement have
been duly authorized by all necessary corporate action on part of the
Company. This Agreement has been duly executed and delivered by the
Company, and, upon the due authorization, execution and delivery by the
Assignor and the Assignee, will constitute the valid and legally binding
obligation of the Company, enforceable against the Company in accordance
with its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to be
obtained or made by the Company in connection with the execution, delivery
or performance by the Company of this Agreement or the consummation by it
of the transaction contemplated hereby;
(d) The Company shall establish a Custodial Account and an Escrow
Account under the Servicing Agreement in favor of the Trust with respect
to the Mortgage Loans separate from the Custodial Account and Escrow
Account previously established under the Servicing Agreement in favor of
the Assignor;
(e) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative agency or
other tribunal, which would draw into question the validity of this
Agreement or the Servicing Agreement, or which, either in any one instance
or in the aggregate, is likely to result in any material adverse change in
the ability of the Company to perform its obligations under this Agreement
or the Servicing Agreement, and the Company is solvent;
(f) The Company has serviced the Mortgage Loans in accordance with
the Servicing Agreement and has provided accurate "paid through" data
(assuming the correctness of all "paid through" data provided by the
Assignor to the Company at the time the Company began servicing the
Mortgage Loans) with respect to the Mortgage Loans to the Assignor;
(g) Except as reflected in the "paid through" data delivered to the
Assignor (assuming the correctness of all "paid through" data provided by
the Assignor to the Company at the time the Company began servicing the
Mortgage Loans), there is no payment default existing under any Mortgage
or any Mortgage Note as of the Securitization Closing Date; and
(h) To the Company's knowledge, there is no non-payment default
existing under any Mortgage or Mortgage Note, or any event which, with the
passage of time or with notice and the termination of any grace or cure
period, would constitute a non-payment default, breach, violation or event
which would permit acceleration as of the Securitization Closing Date.
Pursuant to Section 13.13 of the Servicing Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Article X of
the Servicing Agreement are true and correct as of the date hereof as if such
representations and warranties were made on the date hereof.
4. Representations and Warranties of the Assignor
The Assignor warrants and represents to the Assignee and the Trust
as of date hereof that:
(a) The Assignor is the sole owner of record and holder of the
Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Assignor has good,
indefeasible and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan to the Assignee free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest, and has full right and authority subject to no
interest or participation of, or agreement with, any other party, to sell
and assign each Mortgage Loan pursuant to this Agreement and following the
sale of each Mortgage Loan, the Assignee will own such Mortgage Loan free
and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest. The Assignor intends to
relinquish all rights to possess, control and monitor the Mortgage Loan;
(b) The Assignor has not waived the performance by the Mortgagor of
any action, if the Mortgagor's failure to perform such action would cause
the Mortgage Loan to be in default, nor has the Company waived any default
resulting from any action or inaction by the Mortgagor;
(c) With respect to the Mortgage Loans, any and all requirements of
any federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure laws, all applicable
predatory and abusive lending laws or unfair and deceptive practices laws
applicable to the Mortgage Loan, including, without limitation, any
provisions related to Prepayment Premiums, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations; and
(d) With respect to the Mortgage Loans, none of the Mortgage Loans
are (a) subject to the Home Ownership and Equity Protection Act of 1994 or
(b) classified as "high cost," "threshold," "covered" or "predatory" loans
under any other applicable federal, state or local law (or a similarly
classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or
fees).
5. Remedies for Breach of Representations and Warranties of the
Assignor
The Assignor hereby acknowledges and agrees that in the event of any
breach of the representations and warranties made by the Assignor set forth in
Section 4 hereof that materially and adversely affects the value of the Mortgage
Loans or the interest of the Assignee or the Trust therein, within 60 days of
the earlier of either discovery by or notice to the Assignor of such breach of a
representation or warranty, it shall cure, purchase, cause the purchase of, or
substitute for the applicable Mortgage Loan in the same manner and subject to
the conditions set forth in Section [___] of the Pooling Agreement with respect
to the Assignee's obligations to provide certain representations and warranties
for the Mortgage Loans.
6. Miscellaneous
(a) This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
(b) No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party
against whom such waiver or modification is sought to be enforced, with
the prior written consent of the Trustee.
(c) This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the
Trustee and the Servicer acting on the Trust's behalf). Any entity into
which the Assignor, Assignee or Company may be merged or consolidated
shall, without the requirement for any further writing, be deemed
Assignor, Assignee or Company, respectively, hereunder.
(d) Each of this Agreement and the Servicing Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement and the Servicing Agreement (to the extent assigned hereunder)
by the Assignor to the Assignee and by Assignee to the Trust and nothing
contained herein shall supersede or amend the terms of the Purchase
Agreement and the Servicing Agreement.
(e) This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all
such counterparts shall constitute one and the same instrument.
(f) In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement or the Servicing Agreement with
respect to the Mortgage Loans, the terms of this Agreement shall control.
(g) Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to
such terms in the Purchase Agreement or the Servicing Agreement, as
applicable.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
GS MORTGAGE SECURITIES CORP.
By:____________________________________
Name:_______________________________
Title:______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, a New
York limited partnership
By: ▇▇▇▇▇▇▇ SACHS REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:____________________________________
Name:_______________________________
Title:______________________________
COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited partnership
(Servicer)
By: COUNTRYWIDE GP, INC., general
partner
By:____________________________________
Name:_______________________________
Title:______________________________
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT 7
FORM OF OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of [Servicer], a federal savings bank organized under the laws
of the United States (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete
copy of the partnership agreement of the Company which is in full force
and effect on the date hereof and which has been in effect without
amendment, waiver, rescission or modification.
2. Attached hereto as Exhibit 2 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
3. Attached hereto as Exhibit 3 is a true, correct and complete copy
of the resolutions of the partnership of the Company authorizing the
Company to execute and deliver the Flow Servicing Agreement, dated as of
May 1, 2005, between the Company, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the
"Owner"), (the "Flow Servicing Agreement") and such resolutions are in
effect on the date hereof.
4. Each person listed on Exhibit 4 attached hereto who, as an
officer or representative of the Company, signed (a) the Flow Servicing
Agreement, and (b) any other document delivered or on the date hereof in
connection with any purchase described in the agreements set forth above
was, at the respective times of such signing and delivery, and is now, a
duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name on
Exhibit 4, and the signatures of such persons appearing on such documents
are their genuine signatures.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:_________________________________
By:____________________________________
Name:_______________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of [Servicer],
hereby certify that ____________ is the duly elected, qualified and acting
[Vice] President of the Company and that the signature appearing above is [her]
[his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:_________________________________
By:____________________________________
Name:_______________________________
[Seal] Title: [Vice] President
EXHIBIT 4 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
__________________________ _______________________ _________________________
__________________________ _______________________ _________________________
__________________________ _______________________ _________________________
__________________________ _______________________ _________________________
__________________________ _______________________ _________________________
__________________________ _______________________ _________________________
__________________________ _______________________ _________________________
EXHIBIT 8
MORTGAGE LOAN DOCUMENTS
The following documents shall constitute the Mortgage Loan Documents
with respect to each Mortgage Loan:
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in
the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge, if
state law so allows and the Custodian is so advised by the Owner that
state law so allows. If the Mortgage Loan was acquired by the Seller in a
merger, the endorsement must be by "[Last Endorsee], successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or originated
by the Last Endorsee while doing business under another name, the
endorsement must be by "[Last Endorsee], formerly known as [previous
name]";(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Owner cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon because
of a delay caused by the public recording office where such Mortgage has
been delivered for recordation or because such Mortgage has been lost or
because such public recording office retains the original recorded
Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of
a delay caused by the public recording office, an Officer's Certificate of
the Owner (or certified by the title company, escrow agent, or closing
attorney) stating that such Mortgage has been dispatched to the
appropriate public recording office for recordation and that the original
recorded Mortgage or a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage will be promptly delivered to the Custodian upon receipt thereof
by the Owner; or (ii) in the case of a Mortgage where a public recording
office retains the original recorded Mortgage or in the case where a
Mortgage is lost after recordation in a public recording office, a copy of
such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage;(d) the originals of all
assumption, modification, consolidation or extension agreements, if any,
with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage
must be duly recorded only if recordation is either necessary under
applicable law or commonly required by private institutional mortgage
investors in the area where the Mortgaged Property is located or on
direction of the Owner as provided in this Agreement. If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned to the Owner or
as directed by the Owner. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of
Mortgage must be made by "[Seller], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the
Owner while doing business under another name, the Assignment of Mortgage
must be by "[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Originator to the
Last Endorsee with evidence of recording thereon, or if any such
intervening assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains the
original recorded assignments of mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such intervening
assignment, together with (i) in the case of a delay caused by the public
recording office, an Officers Certificate of the Owner (or certified by
the title company, escrow agent, or closing attorney) stating that such
intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon
receipt thereof by the Seller; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment is
lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a
true and complete copy of the original recorded intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be true and
complete by the title insurance company (provided, that the original
mortgagee policy of title insurance shall be added when available);
(h) original powers of attorney, if applicable, or, if in connection
with any Mortgage Loan, the Seller cannot deliver or cause to be delivered
the original power of attorney with evidence of recording thereon, if
applicable, because of a delay caused by the public recording office, the
Seller shall deliver or cause to be delivered to the Custodian, a
photocopy of such power of attorney, together with an Officer's
Certificate of the Seller (or certified by the title company, escrow
agent, or closing attorney) stating that such power of attorney has been
dispatched to the appropriate public recording office for recordation and
that the original recorded power of attorney or a copy of such power of
attorney certified by such public recording office to be a true and
complete copy of the original recorded power of attorney will be promptly
delivered to the Custodian upon receipt thereof by the Seller; and
(i) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
The following documents, together with the Mortgage Loan Documents,
shall constitute the Mortgage File with respect to each Mortgage Loan:
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy,
ie., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence,
current and historical computerized data files, and all other processing,
underwriting and closing papers and records which are customarily
contained in a mortgage loan file and which are required to document the
Mortgage Loan or to service the Mortgage Loan.
(o) Amortization schedule, if applicable.
EXHIBIT 9
DATA DICTIONARY
Field
Loan Number
Prior Loan Number
Custodian File Number
Custodian Loan Number
Origination Date
Original Balance
First Payment Date
Original Maturity Date
Original Term
Balloon Flag
Loan Type
Amortization Type
Original Amortization Term
Interest Calculation Method
Daily Simple Interest Flag
Original Principal and Interest
Original Interest Rate
Arm Index Description
Margin
ARM Rounding Feature
Lookback Days
First Payment Reset Date
First Rate Reset Date
Initial Rate Reset Period
Rate Reset Period
Initial Payment Reset Period
Payment Reset Period
Initial Rate Adjustment Cap
Rate Adjustment Cap
Lifetime Caps
Lifetime Floor
Max Rate
Min Rate
Negative Amortization Flag
Negam Percent Cap
Payment Cap
Servicing Fee
Property Type
Property Address
Property City
Property State
Property Zip
Borrower Name
CoBorrower Name
Original FICO score
Original Credit Grade
Original Loan To Value Ratio
Original Appraised Value
Original Appraisal Date
Original Appraisal Firm
Original Purchase Price
Purchase BPO
Purchase BPO Date
Lien Position
Original Senior Lien Amount
PMI Provider
PMI Coverage Percentage
PMI Certificate ID
Occupancy Type
Purpose of Loan
Prepayment Flag
Prepayment Penalty Type
Prepayment Term
As Of Date
Loan Number
Investor Number
Investor Category
Current Maturity Date
Remaining Term
Current Principal & Interest Payment
Current Interest Rate
Next Payment Reset Date
Next Rate Reset Date
Next Due Date
Interest Paid To Date
Last Payment Date
Current Balance
Days Past Due
Delinquency Status
Status of Loan
12 Month Pay String
Time 30 Days Delinquent in Past 12 Months
Time 60 Days Delinquent in Past 12 Months
Time 90 Days Delinquent in Past 12 Months
Last Modification Date
Property Sale Date
Debt To Income Ratio
Senior Lien Amount
Recent Property Valuation
Recent Property Valuation Date
Valuation Method
Current FICO
FICO Date
Total Monthly Payment
Total Monthly Payment Principal
Total Monthly Payment Interest
Total Monthly Payment Penalties / Fee
Total Monthly Escrow Payment
Total Monthly Prepayment Amount
Payment Date
Scheduled P&I
REO Rent Collection
Monthly Escrow Advances
Monthly Corporate Advances
Monthly Non Recoverable Corporate Advances
Principal Advances
Interest Advances
Account Balances
Beginning Scheduled Balance
Ending Scheduled Balance
Escrow Balance
Escrow Advance Balance
Recoverable Corporate Advance Balance
Non Recoverable Corporate Advance Balance
Suspense Account Balance
Accrued Interest
Forced Placed Insurance Flag
Annual Forced Placed Insurance
Last Contact Date
Last Attempt Date
Bankruptcy Flag
Bankruptcy Chapter
Bankruptcy Start Date
Bankruptcy End Date
Bankruptcy Post Petition Due Date
Motion for Relief Request Date
Motion for Relief Filing Date
Motion for Relief Hearing Date
Motion for Relief Granted Date
In Demand Flag
In Demand Start Date
In Demand End Date
Foreclosure Start Date
Due Date At Referral
Foreclosure Estimated End Date
Foreclosure Sale Date
Foreclosure end date
First Legal Date
Foreclosure Resolution Flag
Foreclosure Resolution Type
Foreclosure On Hold
Foreclosure Hold Start Date
Forbearance Start Date
Forbearance Payment
Forbearance End Date
Eviction Start Date
Eviction End Date
REO Start Date
REO End Date
REO Sub Status
Eviction Date
Listed Date
Estimated Sale Date
Days In REO
Estimated Sales Price
Possession Date
Redemption End Date
Initial Listing Price
Initial Listing Date
Current List Price
Current List Date
Reason For Default
Termination Type
Balance at Termination
Scheduled Sale Date
Property Sales Price
Liquidation Date
Gross Total Proceeds
Net Total Proceeds
Principal Advanced
Interest Advanced
Corporate Advances Recovered at Termination
Escrow Advances Recovered at Termination
Commission
Seller Concession
Taxes
Repairs
Water and Sewer
Expenses Recovered at Termination
Corporate Advances at Termination
Days from Acquisition to Close
Days from Possession to Close
Charge-off amount
Severity
Severity Formula
Hazard Insurance Claim Date
Hazard Insurance Claim Due Date
Hazard Insurance Claim Amount
Hazard Insurance Claim Paid Amount
MI Insurance Claim Date
MI Insurance Claim Due Date
MI Insurance Claim Amount
MI Insurance Claim Paid Amount
The original term in months before the balloon term
Buydown Flag
IO Flag
IO Term
Number of Units
Convertible Flag
Documentation Type
Amortization Term
Credit Grade
Convertible Term
Principal at termination
Net Interest at termination
Gross Interest at termination
initial set-up fee
other fees
Curtailment Adjustment
Total Remit Amount
Interest Adjustment
Principal Adjustment
Map Panel Number
Flood Zone
Certificate Number
EXHIBIT 10
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT dated __________ (the "Agreement"),
by and between Countrywide Home Loans Servicing LP ("Countrywide"), a Texas
limited partnership, having its executive office located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the "Investor"), a
New York Limited Partnership, having its principal place of business located at
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
WITNESSETH
WHEREAS, the Investor has requested that it be furnished with
certain Confidential Information (as defined below) relating to certain mortgage
related securities issued or serviced, or to be issued or serviced, by
Countrywide, as described on Schedule A hereto (the "Securities"), and the
mortgage loans in which the Securities represent an ownership interest (the
"Mortgage Loans");
WHEREAS, the Investor is an affiliate of an owner or a beneficial
owner of one or more of the classes of the Securities not registered under the
Securities Act of 1933, as amended (the "Subject Securities") or a prospective
purchaser thereof;
WHEREAS, Countrywide is willing to provide the Confidential
Information to the Investor subject to the Investor executing and delivering
this Agreement; and
WHEREAS, this Agreement is intended to facilitate the disclosure of
information by Countrywide to the Investor without Countrywide's having an
obligation to disclose the same information publicly under Regulation FD of the
United States Securities and Exchange Commission, 17 CFR ss.243.100-103.
NOW THEREFORE, in consideration of being granted the right to
receive and review the Confidential Information, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
upon the promises and mutual covenants contained herein, the parties agree as
follows:
1. Confidential Information. The term "Confidential Information"
shall mean all written, oral or electronic information or material related to
the Securities or the Mortgage Loans as set forth on Exhibit 10 to the Flow
Servicing Agreement between Countrywide and the Investor, or similar information
related to the Securities or the Mortgage Loans, which is furnished by
Countrywide to the Investor. The term "Confidential Information" shall not
include information that: (i) is or becomes generally available to and known by
the public other than as a result of disclosure by the Investor or its
Representatives or Advisors (as defined below) in violation of this Agreement
(or in the case of Advisors, violation of their Agreement); (ii) was available
to the Investor prior to its disclosure to the Investor by or at the direction
of Countrywide; (iii) becomes available to the Investor from a source other than
Countrywide, provided that the Investor has no knowledge that such source is
prohibited from disclosing such information to the Investor by a contractual,
legal or fiduciary obligation to Countrywide or any affiliate of Countrywide; or
(iv) is independently developed by the Investor without reliance on the
Confidential Information.
2. Nondisclosure of Information. (a) As a condition to the Investor
being furnished with the Confidential Information, the Investor agrees to treat
the Confidential Information in accordance with the provisions of this Agreement
and agrees to take or abstain from taking certain actions with respect thereto
as set forth herein. The Investor agrees not to use any of the Confidential
Information for any purpose other than the purpose of evaluating the Investor's
or its affiliate's investment in, and the value of, the Subject Securities and
the underlying Mortgage Loans (including evaluating compliance with the terms of
the related pooling and servicing agreement). Except as otherwise expressly
provided herein, the Investor agrees that the Confidential Information will be
kept confidential by the Investor and its affiliates, directors, officers and
employees who have access to, obtain, or receive the Confidential Information
either directly or indirectly from the Investor under this Agreement
(collectively, its "Representatives").
(b) The Investor may disclose the Confidential Information to
its Representatives and its affiliates' Representatives and agents,
partners and representatives, including without limitation any
accountants, attorneys, and financial advisors (collectively "Advisors")
who need to know such information for the purpose of evaluating the
Investor's or its affiliate's investment in, and valuing, the Subject
Securities and the underlying Mortgage Loans, provided that any such
Representatives are informed of the confidential nature of the
Confidential Information and any such Advisors (with the exception of
counsel who have professional obligations of confidentiality and who the
Investor will direct to maintain the confidentiality of the information)
first execute a substantially similar form of confidentiality agreement as
this Agreement with Investor with respect to the Confidential Information,
which agreement shall name Countrywide as a third party beneficiary
thereto. The Investor agrees that, except as permitted herein it will not,
and will direct its Representatives not to, disclose to any person any
Confidential Information. The Investor will be responsible for any breach
of this Agreement by its affiliates' and its Representatives. In addition,
the Investor may disclose the Confidential Information to a prospective
purchaser of the Mortgage Loans or the Securities (in the case of
Securities in particular as may be necessary to comply with securities
laws, including without limitation, Regulation AB under the Securities Act
of 1933 and the Securities Exchange Act of 1934, each as amended, or any
similar successor rule or regulation), provided that such prospective
purchaser shall have executed a similar form confidentiality agreement as
this Agreement with Investor with respect to the Confidential Information.
(c) Notwithstanding anything herein to the contrary, the
Investor and Countrywide agree that they (and their employees,
representatives, and other agents) may disclose to any and all persons,
without limitation of any kind from the commencement of discussions, the
U.S. federal and state income tax treatment and tax structure of the
transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to it in relation to the tax treatment and tax
structure. For this purpose, "tax structure" is limited to facts relevant
to the U.S. federal and state income tax treatment of the transaction and
does not include information relating to the identity of the parties,
their affiliates, agents or advisors.
3. Compelled Disclosure. If the Investor or any of its
Representatives are requested or required to disclose any Confidential
Information as a matter of law, regulation, legal process or by regulatory
authority, the Investor will promptly notify Countrywide (so long as legally
permitted to provide such notification) in order to permit Countrywide to seek a
protective order to take other appropriate action. The Investor also will
reasonably cooperate in Countrywide's efforts, at Countrywide's expense, to
obtain a protective order or other reasonable assurance that confidential
treatment will be accorded to the Confidential Information. If, in the absence
of a protective order or receipt of a waiver hereunder, the Investor or any of
its Representatives is so compelled to disclose any portion of the Confidential
Information, the Investor may disclose to the party compelling disclosure only
the part of such Confidential Information that is so required, based on
consultation and advice of its counsel, to be disclosed.
4. Purchase of Securities; Disclosure Related to Resale of
Securities. The Investor hereby acknowledges that it may receive material
non-public information under this Agreement and that it is aware and understands
that United States securities laws prohibit any person with material, non-public
information about an issuer from purchasing or selling securities of such issuer
or, subject to certain limited exceptions, from communicating such information
to any other person. The Investor further agrees to use any Confidential
Information in compliance with all applicable laws and regulations promulgated
by the United States Securities and Exchange Commission.
5. Debtor Contact. The Investor agrees not to knowingly, as a result
of knowledge obtained from the Confidential Information, communicate (except for
the communications made in the ordinary course of business unrelated to the
subject matter hereof) with any borrower, debtor, guarantor, appraiser under any
Mortgage Loan or any such borrower's, debtor's or guarantor's accountant or
attorney, or any other person or party having an interest in any of the Mortgage
Loans, including any tenant, managing or leasing agent, whose name is obtained
from the Confidential Information, in each case with respect to its investment
in the Subject Securities and/or the underlying Mortgage Loans without the prior
written consent of Countrywide, which consent can be arbitrarily withheld;
provided, however, to the extent the Investor or any of its affiliates is
servicing such Mortgage Loan, Countrywide shall be deemed to have given consent
to any such communication subject to the terms and conditions contained in any
agreement (to which Investor or any of its affiliates, as applicable, is a
party) governing the terms of such servicing.
6. Not an Offer to Buy or Sell Securities. The Investor acknowledges
and agrees that the Confidential Information does not constitute an offer to buy
or sell or a solicitation of an offer to buy or sell any security or instrument
or to participate in any trading strategy.
7. Entire Agreement. This Agreement represents the entire agreement
between the Investor and Countrywide relating to the treatment of the
Confidential Information hereupon or hereafter reviewed or inspected by the
Investor. This Agreement supersedes all other agreements relating to the
Confidential Information that have previously been executed by the Investor in
favor of Countrywide.
8. General Provisions. No failure or delay in exercising any right
hereunder will operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right. The parties acknowledge and agree that, in the event of any
breach of this Agreement, Countrywide might be irreparably harmed and unable to
be made whole by monetary damages. It is accordingly agreed that Countrywide, in
addition to any other remedy to which it may be entitled in law or equity, will
be entitled to seek an injunction to remedy breaches of this Agreement and/or to
compel specific performance of this Agreement. This Agreement (a) may not be
assigned by Countrywide or the Investor without the prior written consent of the
other party; (b) cannot be amended, nor can any of its provisions be waived,
except by a writing signed by Countrywide and the Investor; and (c) will be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors and assigns. The Investor consents to personal jurisdiction in
any action brought in any federal or state court within the State of New York
located in the County of New York having subject matter jurisdiction in the
matter for purposes of any action arising out of this Agreement. This Agreement
will be governed by and construed in accordance with the laws of the State of
New York, without giving effect to the principles of conflict of laws thereof.
9. Purpose of Review. The Investor represents and warrants that it
is reviewing the Confidential Information in connection with evaluating the
Investor's or an affiliate's investment in, and the value of, the Subject
Securities and the underlying Mortgage Loans (including evaluating compliance
with the terms of the related pooling and servicing agreement); provided,
however, this shall not prohibit the Investor's future purchase of any other
instrument or security.
10. Indemnification. The Investor agrees to indemnify and hold
harmless Countrywide, its officers, directors and each person, if any, who
controls Countrywide within the meaning of either Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (each, an
"Indemnified Party"), from and against any and all losses, penalties, fines,
forfeitures, judgments, claims, damages, expenses, and any related costs
(including, without limitation, attorney's fees and costs) and liabilities
incurred by or on behalf of any Indemnified Party related to, based upon or
arising out of any breach of any provision of this Agreement by the Investor or
any of its Representatives. The parties hereto agree that neither party will
claim punitive, consequential, indirect or special damages against the other
party under this Agreement.
Promptly after receipt by the Investor under the immediately previous paragraph
of notice of the commencement of any action, Countrywide shall, if a claim in
respect thereof is to be made against the Investor under such subsection, notify
the Investor in writing of the commencement thereof. In case any such action
shall be brought against Countrywide and it shall notify the Investor of the
commencement thereof, the Investor shall be entitled to participate therein and,
to the extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to Countrywide, and, after notice from the Investor to
Countrywide of its election so to assume the defense thereof, the Investor shall
not be liable to Countrywide under the immediately previous paragraph for any
legal expenses of other counsel or any other expenses, in each case subsequently
incurred by Countrywide, in connection with the defense thereof other than
reasonable costs of investigation.
Notwithstanding the foregoing, Countrywide shall have the right to employ
separate counsel, the reasonable fees and expenses of such counsel to be paid by
Investor, in any action and to participate in the defense thereof if the named
parties to any such action (including any impleaded parties) include both the
Investor and Countrywide, and Countrywide shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Investor and that joint
representation may be inappropriate under professional standards, in which case
the Investor shall not have the right to assume the defense of such action on
behalf of Countrywide, it being understood, however, that the Investor shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys for Countrywide (including
controlling persons), and any such firm shall be designated in writing by
Countrywide.
11. Non-public Personal Information. The Investor understands that
the Confidential Information may contain "nonpublic personal information" as
that term is defined in Section 6809(4) of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act (the
"Act") and the Investor agrees to maintain such nonpublic personal information
that it receives hereunder in accordance with the Act and other applicable
federal and state privacy laws.
12. Ongoing Provision of Confidential Information. This Agreement
shall apply to any and all Confidential Information provided by Countrywide to
the Investor at any time on or after the date hereof relating to the Securities
or the Mortgage Loans. In the event of any transfer of the Securities by the
Investor, this Agreement shall not result in any obligation on the part of
Countrywide to provide any similar information to any transferee. The
obligations of the Investor pursuant to the terms of this Agreement shall
terminate three years from the date hereof.
13. Prohibition on Sale Transfer of Information. The Investor hereby
covenants that it shall not transfer or make available any Confidential
Information directly or indirectly to any third parties (except as permitted
herein or to service providers, rating agencies, agents and subcontractors
solely in their capacity as such and to Representatives, Advisors and
prospective purchasers as set forth in Section 2(b) above), without the express
prior written consent of Countrywide.
14. Tax Disclaimer. Notwithstanding anything herein to the contrary,
Investor (and each employee, representative or agent of Investor) may disclose
to any and all persons, without limitation of any kind, the tax treatment and
tax structure of the potential investment and all materials of any kind
(including tax opinions or other tax analyses) that are provided to such party
relating to such tax treatment and tax structure. However, any information
relating to the U.S. federal income tax treatment or tax structure shall remain
subject to the confidentiality provisions hereof (and the foregoing sentence
shall not apply) to the extent reasonably necessary to enable any person to
comply with applicable securities laws. For this purpose, "tax treatment" means
U.S. federal income tax treatment, and "tax structure" is limited to any facts
relevant to the U.S. federal income tax treatment of the potential investment
but shall not include information regarding the identity of the parties thereto.
15. Offering of Securities. Notwithstanding any of the foregoing, in
connection with any offering of securities by Countrywide or an affiliate (the
"Issuer"), in which Investor or an affiliate (the "GS Entity") is involved as
underwriter, dealer, agent or other similar participant, nothing in this letter
agreement shall (i) prevent either the Issuer or the GS Entity from complying
with all applicable disclosure laws, regulations and principles in connection
with such offering or sale of securities, (ii) restrict the ability of the GS
Entity to consider information for due diligence purposes or to share
information with other underwriters participating in such offering or sale of
securities, (iii) prevent the GS Entity from retaining documents or other
information in connection with due diligence or (iv) prevent the GS Entity from
using any such documents or other information in investigating or defending
itself against claims made or threatened by purchasers, regulatory authorities
or others in connection with such an offering or sale of securities.
[Signature Page Follows]
IN WITNESS WHEREOF, this Agreement has been executed as of the
____day of ______________.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
By:____________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited partnership
(Servicer)
By: COUNTRYWIDE GP, INC., general
partner
By:____________________________________
Name:
Title:
SCHEDULE A
For Deal: ___________________________________________
EXHIBIT 11
FORM OF ANNUAL CERTIFICATION
[_______________] (the "Trust"), Mortgage Pass-Through Certificates,
Series [_____], issued pursuant to the Pooling and Servicing Agreement, dated as
of [_____], 200[_] (the "Pooling and Servicing Agreement"), among [_____], as
depositor (the "Depositor"), [_____], as trustee (the "Trustee"), [_____], as
servicer (the "Servicer"), and [_____], as responsible party
I, [identify the certifying individual], certify to the Depositor
and the Trustee, and their officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. The servicing information required to be provided to the Trustee
by the Servicer under the Pooling and Servicing Agreement has been so
provided;
2. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon my
knowledge and the annual compliance review required under the Pooling and
Servicing Agreement, and except as disclosed in the annual compliance
statement required to be delivered to the Trustee in accordance with the
terms of the Pooling and Servicing Agreement (which has been so delivered
to the Trustee), the Servicer has fulfilled its obligations under the
Pooling and Servicing Agreement; and
3. [If the Securitization Transfer occurs in 2005.] All significant
deficiencies relating to the Servicer's compliance with the minimum
servicing standards for purposes of the report provided by an independent
public accountant, after conducting a review conducted in compliance with
the Uniform Single Attestation Program for Mortgage Bankers or similar
procedure, as set forth in the Pooling and Servicing Agreement, have been
disclosed to such accountant and are included in such reports.
4. [If the Securitization Transfer occurs in 2006 or thereafter.]
The report on assessment of compliance with servicing criteria required to
be delivered by us under the Pooling and Servicing Agreement has been
delivered to the Trustee and complied with the requirements thereunder and
any material instance of non-compliance with the Servicing Criteria has
been disclosed on such report.
Date:__________________________________
__________________________________
[Signature]
[Title]
EXHIBIT 12
FORM OF POWER OF ATTORNEY
FORM OF LIMITED POWER OF ATTORNEY
LIMITED POWER OF ATTORNEY
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY, a New York limited partnership,
organized under the laws of the United States and having its principal place of
business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as Owner (hereinafter
called "Owner") hereby appoints Countrywide Home Loans Servicing LP (hereinafter
called "Countrywide"), as its true and lawful attorney-in-fact to act in the
name, place and stead of Owner solely for the purposes set forth below.
The said attorney-in-fact is hereby authorized and empowered, solely
with respect to the Mortgage Loans and REO Properties, as defined in, and
subject to the terms of, that certain Flow Servicing Agreement, between
Countrywide and Owner, dated as of May 1, 2005 (the "Servicing Agreement"), as
follows:
1. To execute, acknowledge, seal and deliver deed of trust/mortgage
note endorsements, lost note affidavits, assignments of deed of trust/mortgage
and other recorded documents, satisfactions/releases/reconveyances of deed of
trust/mortgage, subordinations and modifications, tax authority notifications
and declarations, deeds, bills of sale, and other instruments of sale,
conveyance, and transfer, appropriately completed, with all ordinary or
necessary endorsements, acknowledgments, affidavits, and supporting documents as
may be necessary or appropriate to effect its execution, delivery, conveyance,
recordation or filing.
2. To execute and deliver insurance filings and claims, affidavits
of debt, substitutions of trustee, substitutions of counsel, non-military
affidavits, notices of rescission, foreclosure deeds, transfer tax affidavits,
affidavits of merit, verifications of complaints, notices to quit, bankruptcy
declarations for the purpose of filing motions to lift stays, and other
documents or notice filings on behalf of Owner in connection with insurance,
foreclosure, bankruptcy and eviction actions.
3. To endorse any checks or other instruments received by
Countrywide and made payable to Owner.
4. To pursue any deficiency, debt or other obligation, secured or
unsecured, including but not limited to those arising from foreclosure or other
sale, promissory note or check. This power also authorizes Countrywide to
collect, negotiate or otherwise settle any deficiency claim, including interest
and attorney's fees.
5. To do any other act or complete any other document that arises in
the normal course of servicing of all Mortgage Loans and REO Properties, as
defined in, and subject to the terms of the Servicing Agreement.
This Limited Power of Attorney shall expire on _____ __, 200_.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
Dated:________________________, 200___.
Witness: ____________________________ By:_________________________________
Name:
Title:
___________________________________
Name:
___________________________________
Name
EXHIBIT 14
Subprime Default and REO Servicing Standards
o Right Party Contact Rate of twenty-seven and a half percent (27.50%) per
month. Termination standard is twenty-two and a half percent (22.50%),
after Servicer has failed to respond to the notice provisions contained in
the Flow Servicing Agreement
o Servicer shall meet the foreclosure timeline requirements as set forth
in the FNMA guidelines
Time Zones
----------
All accounts should be called until 9:00 p.m. in each time zone Monday through
Thursday.
Collection Call Statistics
--------------------------
With respect to only loans owned by GS ("GS Loans"), Servicer shall report
monthly to GS to the extent permitted by applicable law the following dialer
statistical information broken out by delinquency bucket and on a loan level
basis:
o Number of attempts made; ACD, predictive and non-predictive ;
o Number of right party contacts ;
o Number of commitments obtained; and
o Number of performing commitments.
The reports provided by Servicer to Owner will stratify the collection work
efforts and/or results in such a manner as to reasonably assure Owner that
Servicer is in material compliance with the agreed upon service levels.
Skip Tracing Statistics
-----------------------
A minimum of 50% of the accounts referred to skip tracing should result in a
good phone number for the borrower.
Broken Repayment Plans or Broken Promise to Pay
-----------------------------------------------
Follow-up with the Mortgagor within seventy-two (72) hours of the repayment plan
being broken.
FICO's
------
Updated FICO scores must be ordered, at GS's sole cost and expense, on all GS
Loans on a quarterly basis and reported to GS on the following month end tape.
VALUATIONS
----------
BPO should be ordered on the day in which a loan becomes sixty-five (65) days
delinquent if such loan is not cash flowing through a forbearance plan or
bankruptcy plan. Servicer should receive the requested BPO within twenty-one
(21) days of such BPO order with the understanding that such BPOs may be
received at any time depending on the totality of the circumstances; provided,
however, the Servicer shall provide GS with notice and weekly updates of any
developments with respect to any BPO which is not received by the Servicer
within twenty-one (21) days of such BPO order. Reconciliation should be
performed on a BPO within five (5) business days of receipt thereof. Servicer
system should reflect reconciled value upon receipt of the BPO. The reconciled
value should then be reported to GS with the next month end data tape.
BANKRUPTCY
----------
All bankruptcy actions will be managed according to FNMA guidelines including,
without limitation, bankruptcy set-up, filing proofs of claims, monitoring
plans, referring loans to an attorney, filing motions for relief, and/or
releasing bankruptcies back to foreclosure/normal servicing.
All loans owned by GS should be run though ▇▇▇▇▇ or a similar system once every
thirty (30) days.
FORECLOSURE
-----------
Servicer shall follow FNMA timelines for all GS loans in foreclosure. Allowable
delays shall include bankruptcy filings, litigation, loss mitigation which
results in cash being applied to the loan. Assignment delays should be no longer
than thirty (30) days. Title issues should be no longer than sixty (60) days.
Any delays that shall exceed these estimated timelines should be reported to GS
on a monthly basis. GS loans will not be referred to foreclosure until the
reconciled value has been received and evaluated.
Servicer shall maintain a foreclosure resolution rate of fifty percent (50%).
EXHIBIT 15
REO Servicing Standards
Purpose: The purpose of these standards is to serve as a guideline for
valuations, reporting and overall management of Goldman REO Assets.
Property Valuations:
o BPO - As soon as the REO property in possession, by our attached
definition an interior BPO should be ordered by the servicer. The
BPO should state a Value as-is and a Repaired Value. It should
include interior photos, photos of outbuildings, and deferred
maintenance. Upon completion an original copy of the BPO is to be
forwarded to the REO Department of ▇▇▇▇▇▇▇ Sachs either in PDF
format or overnight hard copy. Sale and listing information on the
BPO should be in a grid format acceptable to ▇▇▇▇▇▇▇ ▇▇▇▇▇.
o APPRAISAL - (Only on new REO acquisitions) As soon as the property
is re-keyed and trashed out the servicer will at Goldman request,
order a full interior appraisal on form 1004 from an Appraiser
acceptable to ▇▇▇▇▇▇▇ ▇▇▇▇▇. The appraiser should be given the
access instructions by the servicer. The full appraisal will include
interior photos, photos of all outbuildings and deferred
maintenance. Required is "The Supplemental REO Addendum Form" giving
3 listing comps, itemization of needed repairs, and as-is and
as-repaired value. Upon completion an original copy of the Appraisal
is to be forwarded or made available to the REO Department of
▇▇▇▇▇▇▇ ▇▇▇▇▇ either in PDF format or overnight hard copy.
o OTHER - Any and all subsequent BPO's, CMA's Appraisals, AVM's or
other evaluations ordered during the course of the REO term are to
be made available in the same manner.
Vendors:
o From time to time, ▇▇▇▇▇▇▇ Sachs will provide the Servicer with a
published list of Appraisers, Appraisal Vendors, Realtors, Brokers
and other service providers with whom they prefer not to do
business. The Servicer will make commercially reasonable efforts to
refrain from using anyone named on such a list and ▇▇▇▇▇▇▇ ▇▇▇▇▇
reserves the right to refuse any product or service and payment for
that product or service provided by such listed Appraisers,
Appraisal Vendors, Realtors, Brokers and other service providers -
if, and only if, such product or service does not comply with
reasonable standards as determined by generally accepted mortgage
servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such mortgage loan in the
jurisdiction where the related mortgaged property is located.
Possession:
o RE-KEYING - The property should be Re-keyed as soon as it is in our
possession both to keep prior occupants out and allow access to new
service providers and ▇▇▇▇▇▇▇ Sachs personnel. ▇▇▇▇▇▇▇ ▇▇▇▇▇
suggests that the door be re-keyed to a master key code (key code to
be furnished to REO personnel at ▇▇▇▇▇▇▇ Sachs) and the new keys be
placed in a combo lock box. The servicer will keep REO personnel at
▇▇▇▇▇▇▇ ▇▇▇▇▇ informed with proper access information.
o TRASH OUT - Defined as but not limited to; grass cut, shrubs and
trees trimmed, all debris cleared from interior and exterior,
appliances emptied, cleaned and secured, all trash removed from
premises, windows and doors secured, any fire or safety hazard
removed. The property should be trashed out before the full
appraisal is ordered and the "For Sale" sign is placed on the
property.
o CASH FOR KEYS - The maximum allowable payment to either an owner or
tenant to vacate the property without ▇▇▇▇▇▇▇ Sachs' prior consent
should be one thousand five hundred dollars ($1,500). If the
servicer intends to pay either an owner or tenant to vacate the
property an amount in excess of one thousand five hundred dollars
($1,500), the servicer should make commercially reasonable efforts
to obtain ▇▇▇▇▇▇▇ ▇▇▇▇▇' prior consent. Every advance should be cost
justified and that data available to ▇▇▇▇▇▇▇ Sachs upon request. The
exact amount of the advance should be proportional to the benefit
and made to avoid a lengthily eviction process. Payments should be
made only after the property is actually vacated and inspected by
designated agents of the servicer. The servicer will report each
month on all cash for keys transactions.
o INSURANCE CLAIMS- The servicer will report on a monthly basis all
Insurance claims filed, claims denied and claims aged over ninety
(90) days during the reporting period.
On the Market:
o LISTING -
o All properties are expected to be listed within thirty (30)
days of possession.
o Properties not listed within thirty (30) days will require an
exceptions report at month end.
o All listings should be in the local MLS.
o Listing Agreements should not be for more than six (6) months.
o All listing agreements are subject to cancellation at any time
without penalty of liability to ▇▇▇▇▇▇▇ ▇▇▇▇▇
o SIGNAGE -
o All listed properties are to have a sign that is conspicuous
and readable from the street which clearly indicates the
property is available for sale and contact information for
prospective buyers.
o From the date of acquisition through the date of listing , the
broker/agent/servicer is to reasonably inspect the property
until a sale sign is posted.
EXHIBIT 16
FORM OF COMMITMENT LETTER
[OWNER]
[DATE]
Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ SV-3A
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Portfolio Services
Re: Flow Servicing Agreement dated May __ , 2005 (the
"Servicing Agreement"), between ▇▇▇▇▇▇▇ Sachs Mortgage Company
("Owner") and Countrywide Home Loans Servicing LP, as servicer
("Countrywide").
Gentlemen and Ladies:
This letter (this "Commitment Letter") and the Term Sheet attached
hereto as Exhibit A, identifies certain mortgage loans (the "Added Mortgage
Loans") which Owner proposes to add and make subject to the Servicing Agreement
and the business terms under which Servicer agrees to service the Added Mortgage
Loans.
Upon the mutual execution of this Commitment Letter, the Added
Mortgage Loans shall be deemed to have been made subject to the terms and
conditions of the Servicing Agreement. The transfer and servicing of the Added
Mortgage Loans shall, unless otherwise agreed, occur on the dates specified
herein.
All exhibits hereto are incorporated herein in their entirety. In
the event there exists any inconsistency between the Servicing Agreement and
this Commitment Letter, the latter shall be controlling notwithstanding anything
contained in the Servicing Agreement to the contrary. All capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Servicing Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, this Agreement has been executed as of the
____day of ______________.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,
as Owner
By:____________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited partnership, as
Servicer
By: COUNTRYWIDE GP, INC., general
partner
By:____________________________________
Name:
Title:
EXHIBIT R
REPRESENTATIONS AND WARRANTIES AGREEMENT, DATED AS OF OCTOBER 28, 2005,
BETWEEN ▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY AND GS MORTGAGE SECURITIES CORP.
EXECUTION COPY
REPRESENTATIONS AND WARRANTIES AGREEMENT
This REPRESENTATIONS AND WARRANTIES AGREEMENT (the "Agreement"),
dated as of October 28, 2005 (the "Closing Date"), is between ▇▇▇▇▇▇▇ ▇▇▇▇▇
MORTGAGE COMPANY ("GSMC") and GS MORTGAGE SECURITIES CORP. (the "Depositor").
WHEREAS, GSMC acquired certain mortgage loans (the "Conduit Mortgage
Loans") set forth on the mortgage loan schedule attached hereto as Exhibit I
(the "Mortgage Loan Schedule") from various mortgage loan sellers pursuant to
certain master loan purchase agreements (each, a "Purchase Agreement"), in each
case between GSMC, as purchaser and the related mortgage loan seller;
WHEREAS, pursuant to an Assignment, Assumption and Recognition
Agreement, dated as of October 28, 2005 (the "AAR"), among the Depositor, GSMC
and Countrywide Home Loans Servicing LP, GSMC will convey, transfer, sell,
grant, and assign the Mortgage Loans to the Depositor;
WHEREAS, pursuant to a Master Servicing and Trust Agreement, dated
as of October 1, 2005 (the "Trust Agreement"), among GS Mortgage Securities
Corp., as depositor, HSBC Bank USA, National Association, as trustee (the
"Trustee"), ▇▇▇▇▇ Fargo Bank, N.A., as master servicer, as securities
administrator and as a custodian, and Deutsche Bank National Trust Company and
▇.▇. ▇▇▇▇▇▇ Trust Company, National Association, as custodians, the Depositor
will transfer the Mortgage Loans to the Trustee;
NOW THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Representations and Warranties of GSMC. To GSMC's knowledge, all
of the representations and warranties as to the Conduit Mortgage Loans, as set
forth in the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company Sellers Guide, dated as of August
30, 2004 (the "Seller's Guide"), are true and correct in all respects as of the
date hereof as if made on the date hereof. With respect to those representations
and warranties which are made to the best of GSMC's knowledge, if it is
discovered by GSMC that the substance of such representation and warranty is
inaccurate, notwithstanding GSMC's lack of knowledge with respect to the
substance of such representation and warranty, such inaccuracy shall be deemed a
breach of the applicable representation and warranty.
It is understood and agreed that the representations and warranties
set forth in this Section 1 shall survive delivery of the Mortgage Loan
Documents to the Depositor or its designee and shall inure to the benefit of the
Depositor and its assigns notwithstanding any restrictive or qualified
endorsement or assignment. Upon the discovery by GSMC or the Depositor and its
assigns of a breach of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other parties to
this Agreement, and in no event later than two (2) Business Days from the date
of such discovery. It is understood and agreed that the obligations of GSMC set
forth in Section 2 to repurchase or, in limited circumstances, substitute a
Mortgage Loan constitute the sole remedies available to the Depositor and its
assigns on their behalf respecting a breach of the representations and
warranties contained in this Section 1.
2. Repurchase of Mortgage Loans. Upon discovery or notice of any
breach by GSMC of any representation, warranty or covenant under this Agreement
that materially and adversely affects the value of any Mortgage Loan or the
interest of the Depositor therein (it being understood that any such defect or
breach shall be deemed to have materially and adversely affected the value of
the related Mortgage Loan or the interest of the Depositor therein if the
Depositor incurs a loss as a result of such defect or breach), the Depositor
promptly shall request that GSMC cure such breach and, if GSMC does not cure
such breach in all material respects within 60 days from the date on which it is
notified of the breach, the Depositor may enforce GSMC's obligation hereunder to
repurchase such Mortgage Loan from the Depositor at an amount equal to the
stated principal balance for such Mortgage Loan plus all accrued and unpaid
interest from the last date on which interest was paid through the last day of
the month of the date of such repurchase plus any advances for taxes or
insurance made by the servicer, plus any costs and damages incurred in
connection with any violation by any Mortgage Loan of any predatory or abusive
lending law, plus any fees or costs incurred in asserting its right to cause
GSMC to repurchase such Mortgage Loan or, in limited circumstances (as set forth
below), substitute for such mortgage loan a Substitute Mortgage Loan (as defined
below) provided that any substitution shall be effected not later than two years
after the date hereof.
In the event of a repurchase or substitution of any Mortgage Loan by
GSMC, the Depositor shall promptly deliver to GSMC or its designee the related
Mortgage File.
Except as specifically set forth herein, the Depositor shall have no
responsibility to enforce any provision of this Agreement, to oversee compliance
hereof or to take notice of any breach or default thereof.
For purposes of this Section, "Deleted Mortgage Loan" and
"Substitute Mortgage Loan" shall be defined as set forth below.
"Deleted Mortgage Loan": A Mortgage Loan which is to be, pursuant to
this Section 2, replaced or to be replaced by GSMC with a Substitute Mortgage
Loan and Substitution Adjustment Amount, if any.
"Substitute Mortgage Loan": A mortgage loan substituted by GSMC for
a Deleted Mortgage Loan which must, on the date of such substitution, (i) have
an outstanding principal balance, after deduction of all scheduled payments due
in the month of substitution (or in the case of a substitution of more than one
mortgage loan for a Deleted Mortgage Loan, an aggregate principal balance), not
in excess of the Stated Principal Balance of the Deleted Mortgage Loan; (ii) be
accruing interest at a rate no lower than and not more than 2% per annum higher
than that of the Deleted Mortgage Loan; (iii) have a remaining term to maturity
not greater than and not more than one year less than that of the Deleted
Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan (i.e.,
fixed rate); and (v) comply with each representation and warranty set forth in
Section 2 of the Seller's Guide.
"Substitution Adjustment Amount" means with respect to any Mortgage
Loan, the amount remitted by GSMC on the applicable Distribution Date which is
the difference between the outstanding principal balance of a Substitute
Mortgage Loan as of the date of the substitution and the outstanding principal
balance of the Deleted Mortgage Loan as of the date of the substitution.
3. Governing Law.
THIS ASSIGNMENT AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF).
EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
ASSIGNMENT AGREEMENT, OR ANY OTHER DOCUMENTS AND INSTRUMENTS EXECUTED IN
CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN), OR ACTIONS OF SUCH PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS ASSIGNMENT AGREEMENT.
4. Counterparts. This Assignment Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
instrument.
5. Definitions. Any capitalized term used but not defined in this
Agreement has the meaning assigned thereto in the Purchase Agreement or the
Trust Agreement, as applicable.
6. Third Party Beneficiary. The parties agree that the Trustee and
the Class AF-3W Certificate Insurer are intended to be, and shall have the
rights of, a third party beneficiary of this Agreement.
7. Amendments. This Agreement may be amended from time to time by
the parties hereto with the Class AF-3W Certificate Insurer's consent (which
consent shall not be unreasonably withheld); provided that this Agreement may be
amended without the Class AF-3W Certificate Insurer's consent if no Class AF-3W
Certificate is Outstanding.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement the day and year first above written.
▇▇▇▇▇▇▇ SACHS MORTGAGE
COMPANY
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Real Estate Funding
Corp., its General Partner
By: __________________________________
Name:
Title:
GS MORTGAGE SECURITIES CORP.
By: __________________________________
Name:
Title:
EXHIBIT I
Mortgage Loan Schedule