SERVICING AGREEMENT
WILSHIRE CREDIT CORPORATION,
as Servicer
LASALLE BANK NATIONAL ASSOCIATION,
as Master Servicer and Securities Administrator
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS TRUST, SERIES 2006-SL2,
as Issuing Entity
CITIBANK, N.A.,
as Indenture Trustee
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.
as Depositor
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.
as Sponsor
SERVICING AGREEMENT
Dated as of July 1, 2006
ARTICLE I
DEFINITIONS
Section 1.01 Definitions
Section 1.02 Other Definitional Provisions
ARTICLE II
Representations and Warranties
Section 2.01 Representations and Warranties Regarding Wilshire and the Master
Servicer
Section 2.02 Representations and Warranties of the Issuing Entity
Section 2.03 Breaches of Representations and Warranties; Notice
ARTICLE III
Administration and Servicing of Loans
Section 3.01 Servicer to Service Mortgage Loans
Section 3.02 Servicing and Subservicing; Enforcement of the Obligations of
Servicer
Section 3.03 Rights of the Depositor and Indenture Trustee in Respect of the
Servicer
Section 3.04 Master Servicer to Act as Servicer
Section 3.05 Collection of Mortgage Loan Payments; Collection Account; Master
Servicer Collection Account; Payment Account
Section 3.06 Collection of Taxes; Assessments and Similar Items; Escrow
Accounts
Section 3.07 Access to Certain Documentation and Information Regarding the
Mortgage Loans
Section 3.08 Permitted Withdrawals from the Collection Account, the Master
Servicer Collection Account and Payment Account
Section 3.09 [Reserved]
Section 3.10 Maintenance of Hazard Insurance
Section 3.11 Enforcement on Due-On-Sale Clauses; Assumption Agreements
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds; Special Loss Mitigation
Section 3.13 Custodian to Cooperate; Release of Mortgage Files
Section 3.14 Documents, Records and Funds in Possession of Sevicer to be Held
for the Indenture
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Trustee
Section 3.15 Servicing Compensation
Section 3.16 Access to Certain Documentation
Section 3.17 Annual Statement as to Compliance
Section 3.18 Annual Independent Public Accountants' Servicing Statement;
Financial Statements
Section 3.19 [Reserved]
Section 3.20 Periodic Filings
Section 3.21 Indemnification by Securities Administrator
Section 3.22 Indemnification by Servicer
Section 3.23 Prepayment Charge Reporting Requirements
Section 3.24 Information to the Master Servicer
Section 3.25 Indemnification
Section 3.26 Nonsolicitation
Section 3.27 High Cost Mortgage Loans
Section 3.28 Special Servicing Agreement
ARTICLE IIIA
THE MASTER SERVICER
Section 3A.01 Master Servicer
Section 3A.02 Monitoring of Servicers
Section 3A.03 Power to Act Procedures;
Section 3A.04 Liabilities of the Master Servicer
Section 3A.05 Merger or Consolidation of the Master Servicer
Section 3A.06 Indemnification from the Master Servicer
Section 3A.07 Limitations on Liability of the Master Servicer and Others
Section 3A.08 Master Servicer Not to Resign
Section 3A.09 Sale and Assignment of Master Servicing
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Section 3A.10 Compensation for the Master Servicer
ARTICLE IV
Servicing Notes
Section 4.01 Advances
Section 4.02 Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls
ARTICLE V
Payment Account
Section 5.01 Payment Account
ARTICLE VI
The Servicer, the Master Servicer and the Depositor
Section 6.01 Respective Liabilities of the Master Servicer, the Servicer and
the Depositor
Section 6.02 Merger or Consolidation of the Master Servicer, the Servicer or
the Depositor
Section 6.03 Limitation on Liability of the Master Servicer, the Servicer,
the Depositor and Others
Section 6.04 Limitation on Resignation of Servicer
ARTICLE VII
Default
Section 7.01 Events of Default
Section 7.02 Master Servicer or Indenture Trustee to Act; Appointment of
Successor
Section 7.03 Notification to Securityholders
ARTICLE VIII
Miscellaneous Provisions
Section 8.01 Amendment
Section 8.02 Governing Law
Section 8.03 Notices
Section 8.04 Severability of Provisions
Section 8.05 Third-Party Beneficiaries
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Section 8.06 Counterparts
Section 8.07 Effect of Headings and Table of Contents
Section 8.08 Termination
Section 8.09 Certain Matters Affecting the Indenture Trustee and the Securities
Administrator
Section 8.10 Owner Trustee Not Liable for Mortgage Files
Section 8.11 Additional Termination Requirements
Section 8.12 Entire Agreement
EXHIBIT A MORTGAGE LOAN SCHEDULE
EXHIBIT B LIMITED POWER OF ATTORNEY
EXHIBIT C FORM OF REQUEST FOR RELEASE
EXHIBIT D FORM OF ITEM 1123 CERTIFICATION OF SERVICER
EXHIBIT E FORM OF ASSESSMENT OF COMPLIANCE
EXHIBIT F SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
EXHIBIT G ▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATES
EXHIBIT H FORM OF BACK-UP CERTIFICATION OF SECURITIES ADMINISTRATOR
EXHIBIT I FORM OF BACK-UP CERTIFICATION OF SERVICER
SCHEDULE I REPRESENTATIONS AND WARRANTIES OF WILSHIRE
SCHEDULE II REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER
SCHEDULE III ITEMS ON FORM 8-K
SCHEDULE IV ITEMS ON FORM 10-D
SCHEDULE V ITEMS ON FORM 10-K
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This is a Servicing Agreement, dated as of July 1, 2006 (this "Agreement"),
by and among Wilshire Credit Corporation, as a servicer ("Wilshire" or
"Servicer"), LaSalle Bank National Association, as master servicer (the "Master
Servicer") and as securities administrator (the "Securities Administrator"),
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Series ▇▇▇▇-▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇ ▇▇▇▇▇▇"),
▇▇▇▇▇▇▇▇, N.A., as indenture trustee (in such capacity, the "Indenture
Trustee"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor (the
"Depositor"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., as sponsor (the
"Sponsor").
WITNESSETH THAT:
WHEREAS, pursuant to the terms of the Mortgage Loan Sale and Assignment
Agreement ("MLSA"), dated as of July 1, 2006, by and between the Sponsor, as
seller, and the Depositor, as purchaser, the Sponsor has sold to the Depositor
the Mortgage Loans together with the Mortgage Files on the Closing Date and
thereafter all Additional Balances created on or after the Cut-off Date;
WHEREAS, pursuant to the Trust Agreement, dated as of August 8, 2006, by
and between the Depositor and Wilmington Trust Company, as owner trustee (the
"Owner Trustee"), the Depositor will sell the Mortgage Loans and all of its
rights under the MLSA to the Issuing Entity, together with the Mortgage Files on
the Closing Date and thereafter all Additional Balances relating thereto created
on or after the Cut-off Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuing Entity
will issue and transfer the Certificates to the Depositor;
WHEREAS, pursuant to the terms of the Indenture, the Issuing Entity will
issue and transfer the Notes to the Depositor; and
WHEREAS, pursuant to the terms of this Servicing Agreement, Wilshire will
service the related Mortgage Loans directly or through one or more Subservicers
and the Master Servicer will master servicer the Mortgage Loans serviced by
Wilshire hereunder and by Countrywide Home Loans Servicing LP ("Countrywide"
and, together with Wilshire, the "Servicers") under the Flow Servicing
Agreement, dated as of August 8, 2006 (the "Countrywide Servicing Agreement"),
by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation, as owner, MLML, as owner,
Countrywide, as servicer;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
For all purposes of this Servicing Agreement, except as otherwise expressly
provided herein or unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in the
Definitions contained in Appendix A to the Indenture, dated as of August 8, 2006
(the "Indenture"), among the Issuing Entity, the Indenture Trustee and the
Securities Administrator, which is incorporated by reference herein. All other
capitalized terms used herein shall have the meanings specified herein.
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Section 1.02 Other Definitional Provisions.
(a) All terms defined in this Servicing Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing Agreement or in
any such certificate or other document, to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Servicing Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Servicing Agreement shall refer to this Servicing Agreement as
a whole and not to any particular provision of this Servicing Agreement; Section
and Exhibit references contained in this Servicing Agreement are references to
Sections and Exhibits in or to this Servicing Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation;"
"or" shall include "and/or;" and the term "proceeds" shall have the meaning
ascribed thereto in the UCC.
(d) The definitions contained in this Servicing Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 Representations and Warranties Regarding Wilshire and the Master
Servicer.
Each of Wilshire and the Master Servicer makes the representations and
warranties set forth in Schedule I and II, respectively, to the other parties
hereto as of the Closing Date.
Section 2.02 Representations and Warranties of the Issuing Entity.
The Issuing Entity hereby represents and warrants to the other parties
hereto, as of the Closing Date that:
(i) The Issuing Entity is a statutory trust duly formed and in good
standing under the laws of the State of Delaware and has full power, authority
and legal right to execute and deliver this Servicing Agreement and to perform
its obligations under this Servicing Agreement, and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Servicing Agreement; and
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(ii) The execution and delivery by the Issuing Entity of this
Servicing Agreement and the performance by the Issuing Entity of its obligations
under this Servicing Agreement will not violate any provision of any law or
regulation governing the Issuing Entity or any order, writ, judgment or decree
of any court, arbitrator or governmental authority or agency applicable to the
Issuing Entity or any of its assets. Such execution, delivery, authentication
and performance will not conflict with, or result in a breach or violation of,
any mortgage, deed of trust, lease or other agreement or instrument to which the
Issuing Entity is bound.
Section 2.03 Breaches of Representations and Warranties; Notice.
(a) The representations and warranties of each Originator with respect to
the related Mortgage Loans in the applicable Transfer Agreement, which have been
assigned to the Indenture Trustee hereunder, were made as of the date specified
in the applicable Transfer Agreement and brought forward to the Closing Date
pursuant to the related Bring Down Letter. The representations and warranties of
each Originator with respect to the Mortgage Loans contained in the Bring Down
Letter were made as of the Closing Date. The representations and warranties of
the Sponsor with respect to the Mortgage Loans contained in the MLSA were made
as of the Closing Date. To the extent that any fact, condition or event with
respect to a Mortgage Loan constitutes a breach of (i) both representation or
warranty of the applicable Originator under the applicable Transfer Agreements
or Bring Down Letters and (ii) a representation or warranty of the Sponsor under
the MLSA, the obligations of the Sponsor under the MLSA shall be enforced
against the Originator or the Sponsor, as applicable, as set forth in the MLSA.
The Indenture Trustee is hereby directed to and does acknowledge that the
Sponsor shall have no obligation or liability with respect to any breach of a
representation or warranty made by it with respect to any related Mortgage
Loans, except as otherwise set forth in the MLSA, if (as certified to the
Indenture Trustee by the Sponsor) the fact, condition or event constituting such
breach also constitutes a breach of a representation or warranty made by the
related Originator in the related Transfer Agreement or Bring Down Letter,
without regard to whether the related Originator fulfills its contractual
obligations in respect of such representation or warranty. The Indenture Trustee
also is hereby directed to and does acknowledge that the Sponsor shall have no
obligation or liability with respect to any breach of a representation or
warranty made solely by the Originators with respect to the Mortgage Loans,
without regard to whether the related Originator fulfills its contractual
obligations in respect of such representation or warranty.
In addition to the representations and warranties of the Originators in the
Transfer Agreements that were brought forward to the Closing Date pursuant to
the related Bring Down Letter, with respect to each Mortgage Loan, each
Originator made certain additional covenants regarding such Mortgage Loan, as
set forth in the related Transfer Agreement. With respect to any breach of such
additional covenants that materially and adversely affects the interests of the
Securityholders in such Mortgage Loan, the Sponsor shall (1) use reasonable
efforts to enforce such covenant against the related Originator and (2) if the
Sponsor successfully enforces any obligation of the related Originator to
repurchase such Mortgage Loan, the Sponsor shall repurchase such Mortgage Loan
in accordance with this Section 2.03. If the Sponsor does not successfully
enforce the obligation, if any, of the Originator to repurchase a Mortgage Loan
with respect to any breach of any such additional covenants, the Sponsor shall
have not obligation or right to repurchase or cure such Mortgage Loan.
(b) Upon discovery by any of the Depositor, the Servicer, the Master
Servicer, the Securities Administrator or the Indenture Trustee of a breach of
any of such representations and warranties that adversely and materially affects
the value of the related Mortgage Loan, Prepayment Charges or the
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interests of the Securityholders, the party discovering such breach shall give
prompt written notice to the other parties. Within ninety (90) days of the
discovery of such breach of any representation or warranty, the applicable
Originator or the Sponsor, as applicable, shall either (a) cure such breach in
all material respects, (b) repurchase such Mortgage Loan or any property
acquired in respect thereof from the Issuing Entity at the Purchase Price or (c)
within the two (2) year period following the Closing Date, substitute a
Replacement Mortgage Loan for the affected Mortgage Loan. In the event of
discovery of a breach of any representation and warranty of any Originator or
the Sponsor, the Indenture Trustee's rights shall be enforced under the
applicable Transfer Agreement and the MLSA for the benefit of Securityholders.
If a breach of the representations and warranties set forth in a Transfer
Agreement hereof exists solely due to the unenforceability of a Prepayment
Charge, the Indenture Trustee (if it has had actual notice thereof), the
Sponsor, the Depositor or the other party having notice thereof shall notify the
Master Servicer and the related Servicer thereof and not seek to enforce the
repurchase remedy provided for herein unless such Mortgage Loan is not current.
In the event of a breach of the representations and warranties with respect to
the Mortgage Loans set forth in the Transfer Agreement, the Indenture Trustee
shall use reasonable efforts to enforce the right of the Issuing Entity to be
indemnified for such breach of representation and warranty. In the event that
such breach relates solely to the unenforceability of a Prepayment Charge,
amounts received in respect of such indemnity up to the amount of such
Prepayment Charge shall be distributed pursuant to Section 3.06 of the
Indenture. As provided in the MLSA, if the Sponsor substitutes for a Mortgage
Loan for which there is a breach of any representations and warranties in the
related Transfer Agreement which adversely and materially affects the value of
such Mortgage Loan and such substitute mortgage loan is not a Replacement
Mortgage Loan, under the terms of the MLSA, the Sponsor will, in exchange for
such substitute Mortgage Loan, (i) provide the applicable Purchase Price for the
affected Mortgage Loan or (ii) within two years of the Closing Date, substitute
such affected Mortgage Loan with a Replacement Mortgage Loan. Any such
substitution shall not be effected prior to the additional delivery to the
Custodian of a Request for Release substantially in the form of Exhibit C and
shall not be effected unless it is within two years of the Startup Day. The
Sponsor indemnifies and holds the Issuing Entity, the Indenture Trustee, the
Depositor, the Master Servicer, the related Servicer, the Sponsor, the related
Custodian and each Securityholder harmless against any and all taxes, claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Issuing Entity, the
Indenture Trustee, the Depositor, the Master Servicer, the Servicer, the
Custodian, the Sponsor and each Securityholder may sustain in connection with
any actions of the Sponsor relating to a repurchase of a Mortgage Loan other
than in compliance with the terms of this Section 2.03 and the MLSA, to the
extent that any such action causes (i) any federal or state tax to be imposed on
the Issuing Entity or any REMIC provided for in the Indenture, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup day" under Section
860G(d)(1) of the Code, or (ii) any REMIC created pursuant to the Indenture to
fail to qualify as a REMIC at any time that any Certificate is outstanding. In
furtherance of the foregoing, if the Originator or the Sponsor, as applicable,
is not a member of MERS and repurchases a Mortgage Loan which is registered on
the MERS System, the Originator or the Sponsor, as applicable, at its own
expense and without any right of reimbursement, shall cause MERS to execute and
deliver an assignment of the Mortgage in recordable form to transfer the
Mortgage from MERS to the Originator or the Sponsor, as applicable, and shall
cause such Mortgage to be removed from registration on the MERS System in
accordance with MERS' rules and regulations.
With respect to any Mortgage Loan repurchased by the Sponsor pursuant to
the MLSA, or by any Originator pursuant to the applicable Transfer Agreement,
the principal portion of the funds received in respect of such repurchase of a
Mortgage Loan by the Servicer or the Sponsor will be considered a Principal
Prepayment and shall be deposited in the Collection Account pursuant to Section
3.05 of this
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Agreement or the MLSA, as applicable. Upon receipt by the Indenture Trustee of
notice from the applicable Servicer of receipt by the Servicer of the full
amount of the Purchase Price for a Deleted Mortgage Loan, and upon receipt by
the Custodian of the Mortgage File for a Replacement Mortgage Loan substituted
for a Deleted Mortgage Loan and a Request for Release, the Custodian shall
release to the Sponsor or the applicable Originator, as applicable, the related
Mortgage File for the Deleted Mortgage Loan and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be necessary to vest in such party or its
designee or assignee title to any Deleted Mortgage Loan released pursuant
hereto, free and clear of all security interests, liens and other encumbrances
created by this Agreement, which instruments shall be prepared by the Depositor,
the Sponsor or the related Originator and the Indenture Trustee shall have no
further responsibility with respect to the Mortgage File relating to such
Deleted Mortgage Loan.
With respect to each Replacement Mortgage Loan to be delivered to the
applicable Custodian pursuant to the terms of this Article II in exchange for a
Deleted Mortgage Loan: (i) the applicable Originator or the Sponsor, as
applicable, must deliver to such Custodian the Mortgage File for the Replacement
Mortgage Loan containing the documents set forth in Section 3.01 of the Trust
Agreement along with a written certification certifying as to the Mortgage Loan
satisfying all requirements under the definition of Replacement Mortgage Loan
and the delivery of such Mortgage File; and (ii) the Depositor will be deemed to
have made, with respect to such Replacement Mortgage Loan, each of the
representations and warranties made by it with respect to the related Deleted
Mortgage Loan. The Custodian shall review the Mortgage File with respect to each
Replacement Mortgage Loan and certify to the Depositor that all documents
required by Section 3.01 of the Trust Agreement have been executed and received.
For any month in which the Sponsor substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Sponsor will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution and the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") plus an amount equal to any unreimbursed
costs, penalties and/or damages incurred by the Issuing Entity in connection
with any violation relating to such Deleted Mortgage Loan of any predatory or
abusive lending law shall be remitted by the Sponsor to the Securities
Administrator for deposit into the Payment Account by the Sponsor on the
Determination Date for the Payment Date relating to the Prepayment Period during
which the related Mortgage Loan became required to be purchased or replaced
hereunder.
Notwithstanding any other provision of this Agreement, the right to
repurchase or substitute Mortgage Loans pursuant to this Article II shall be
subject to the additional limitations that no substitution of a Replacement
Mortgage Loan for a Deleted Mortgage Loan or repurchase of a Mortgage Loan shall
be made unless the Indenture Trustee and the Master Servicer shall have received
an Opinion of Counsel (at the expense of the party seeking to make the
substitution or the repurchase) that, under current law, such substitution will
not (A) affect adversely the status of any REMIC established pursuant to the
Indenture as a REMIC, or of the related "regular interests" as "regular
interests" in any such REMIC, or (B) cause any such REMIC to engage in a
"prohibited transaction" or prohibited contribution pursuant to the REMIC
Provisions.
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The Master Servicer shall amend the Mortgage Loan Schedule to reflect the
removal of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Replacement Mortgage Loan or Replacement Mortgage Loans.
Upon such substitution by the Sponsor, such Replacement Mortgage Loan or
Replacement Mortgage Loans shall constitute part of the Mortgage Pool and shall
be subject in all respects to the terms of this Agreement and the applicable
MLSA, including all applicable representations and warranties thereof included
in the applicable MLSA as of the date of substitution.
(c) It is understood and agreed that the representations, warranties and
indemnification (i) set forth in this Section 2.03, (ii) of the Sponsor and the
Depositor set forth in the MLSA and assigned to the Indenture Trustee by the
Depositor hereunder and (iii) of each Originator, assigned by the Sponsor to the
Depositor pursuant to the MLSA and assigned to the Indenture Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage Loan to the Custodian and shall continue
throughout the term of this Agreement.
(d) The Depositor shall deliver a copy of the Mortgage Loan Schedule to the
Servicer and the Master Servicer on the Closing Date.
(e) Upon discovery by the Depositor, the Servicer, the Master Servicer, the
Securities Administrator or the Indenture Trustee that any Mortgage Loan does
not constitute a "qualified mortgage" within the meaning of section 860G(a)(3)
of the Code, the party discovering such fact shall promptly (and in any event
within five Business Days of discovery) give written notice thereof to the other
parties. In connection therewith, the Depositor shall, at the Depositor's
option, either (i) substitute, if the conditions in Section 2.03(b) with respect
to substitutions are satisfied, a Replacement Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within ninety (90)
days of such discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty contained in this Section 2.03. The
Indenture Trustee, upon the written direction of the Depositor, shall reconvey
to the Depositor the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty contained in this Section
2.03.
ARTICLE III
ADMINISTRATION AND SERVICING OF LOANS
Section 3.01 Servicer to Service Mortgage Loans.
For and on behalf of the Securityholders, the Servicer shall service and
administer the Mortgage Loans in accordance with the Accepted Servicing
Practices. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the Securityholders
and the Indenture Trustee, customary consents or waivers and other instruments
and documents, (ii) to consent to transfers of any Mortgaged Property and
assumptions of the Mortgage Notes and related Mortgages (but only in the manner
provided in this Agreement), (iii) to collect any Insurance Proceeds and other
Liquidation Proceeds and (iv) subject to Section 3.12(a), to effectuate
foreclosure or
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other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that, subject to Section 6.03, the Servicer shall not
take any action that is inconsistent with or prejudices the interests of the
Trust Estate or the Securityholders in any Mortgage Loan serviced by it under
this Agreement or the rights and interests of the other parties to this
Agreement except as otherwise required by this Agreement or by law.
Notwithstanding anything in this Agreement to the contrary, the Servicer shall
not make or permit any modification, waiver or amendment of any term of any
Mortgage Loan which would cause any of the REMICs provided for in the Indenture
to fail to qualify as a REMIC or result in the imposition of any tax under
Section 860G(a) or 860G(d) of the Code. The Servicer shall represent and protect
the interest of the Trust Estate in the same manner as it currently protects its
own interest in mortgage loans in its own portfolio in any claim, proceeding or
litigation regarding a Mortgage Loan, but in any case not in any manner that is
a lesser standard than that provided in the first sentence of this Section 3.01.
Without limiting the generality of the foregoing, the Servicer, in its own name
or in the name of the Depositor and the Indenture Trustee, is hereby authorized
and empowered by the Depositor and the Indenture Trustee, when the Servicer
believes it appropriate in its reasonable judgment, to execute and deliver, on
behalf of the Indenture Trustee, the Depositor, the Securityholders or any of
them, any and all instruments of satisfaction or cancellation, or of partial or
full release or discharge, subordinations and all other comparable instruments,
with respect to the Mortgage Loans, and with respect to the Mortgaged Properties
held for the benefit of the Securityholders. The Servicer shall prepare and
deliver to the Depositor, the Securities Administrator and/or the Indenture
Trustee such documents requiring execution and delivery by any or all of them as
are necessary or appropriate to enable the Servicer to service and administer
the Mortgage Loans, to the extent that the Servicer is not permitted to execute
and deliver such documents pursuant to the preceding sentence. Upon receipt of
such documents, the Depositor, the Securities Administrator and/or the Indenture
Trustee shall execute such documents and deliver them to the Servicer. For
purposes of this Section 3.01, the Indenture Trustee hereby grants to the
Servicer a limited power of attorney (in the form of Exhibit B) to execute and
file any and all documents necessary to fulfill the obligations of the Servicer
under this Section 3.01.
Upon request of the Servicer, the Indenture Trustee shall furnish the
Servicer with any powers of attorney and other documents in form as provided to
it necessary or appropriate to enable the Servicer to service and administer the
Mortgage Loans. The Indenture Trustee shall not be responsible for and the
Servicer shall indemnify the Indenture Trustee for any action taken by the
Servicer pursuant to the application of any power of attorney. Notwithstanding
anything contained herein to the contrary, the Servicer shall not without the
Indenture Trustee's written consent, hire or procure counsel to represent the
Indenture Trustee without indicating its representative capacity.
The Servicer shall not be required to make any Servicing Advance with
respect to a Mortgage Loan that is 150 days or more delinquent.
The Servicer shall deliver a list of Servicing Officers to the Master
Servicer and the Indenture Trustee by the Closing Date.
The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to ▇▇▇▇▇▇ ▇▇▇ Guide Announcement 97-02 and for each
Mortgage Loan, the Servicer agrees that it shall report one of the following
statuses each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off.
The Servicer further is authorized and empowered by the Issuing Entity and
the Indenture Trustee, on behalf of the Securityholders and the Indenture
Trustee, in its own name or in the name of the
7
Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the Issuing Entity and
the Indenture Trustee and the Securityholders or any of them, 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 Indenture Trustee and its successors and assigns. Any reasonable
expenses incurred in connection with the actions described in the preceding
sentence or as a result of MERS discontinuing or becoming unable to continue
operations in connection with the MERS System, shall be subject to withdrawal by
the Servicer from the Collection Account (provided that such expenses constitute
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii)).
With respect to any Mortgage Loan, the Servicer may consent to the
refinancing of the prior senior lien relating to such Mortgage Loan, provided
that the following requirements are met:
(a) the resulting Combined Loan-to-Value Ratio of such Mortgage Loan is no
higher than the Combined Loan-to-Value Ratio prior to such refinancing;
(b) the interest rate for the loan evidencing the refinanced senior lien is
no more than 2.0% higher than the interest rate on the loan evidencing the
existing senior lien immediately prior to the date of such refinancing; and
(c) the loan evidencing the refinanced senior lien is not subject to
negative amortization.
Section 3.02. Servicing and Subservicing; Enforcement of the Obligations of
Servicer.
(a) The Servicer may arrange for the subservicing of any Mortgage Loan by a
subservicer, which may be an affiliate, pursuant to a subservicing agreement
(each, a "Subservicing Agreement"); provided, however, that (i) such
subservicing arrangement and the terms of the related Subservicing Agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder and (ii) that such
agreement would not result in a withdrawal or downgrading by any Rating Agency
of the ratings of any Securities. Notwithstanding the provisions of any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a subservicer or reference
to actions taken through a subservicer or otherwise, the Servicer shall remain
obligated and liable to the Depositor, the Master Servicer, the Indenture
Trustee and the Securityholders for the servicing and administration of the
Mortgage Loans in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such Subservicing
Agreements or arrangements or by virtue of indemnification from the subservicer
and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Mortgage Loans. Every
Subservicing Agreement entered into by the Servicer shall contain a provision
giving any successor servicer the option to terminate such agreement, in the
event a successor servicer is appointed. All actions of the each subservicer
performed pursuant to the related Subservicing Agreement shall be performed as
an agent of the Servicer with the same force and effect as if performed directly
by the Servicer. The Servicer shall deliver to the Master Servicer copies of all
Subservicing Agreements. The Indenture Trustee, the Master Servicer and the
Securities Administrator shall have no obligations, duties or liabilities with
respect to a subservicer,
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including, without limitation, any obligation, duty or liability to monitor such
subservicer or to pay a Subservicer's fees and expenses.
(b) For purposes of this Agreement, the Servicer shall be deemed to have
received any collections, recoveries or payments with respect to the related
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Servicer.
(c) The Servicer shall not permit a Subservicer to perform any servicing
responsibilities hereunder with respect to the Mortgage Loans unless that
Subservicer, if required by Section 3.17, first agrees in writing with the
Servicer to deliver an Assessment of Compliance and an Accountant's Attestation
in such manner and at such times that permits that Servicer to comply with
Section 3.17 of this Agreement.
Section 3.03. Rights of the Depositor and the Indenture Trustee in Respect of
the Servicer.
None of the Securities Administrator, the Master Servicer, the Indenture
Trustee or the Depositor shall have any responsibility or liability for any
action or failure to act by the Servicer, and none of them is obligated to
supervise the performance of the Servicer hereunder or otherwise except, with
respect to the Master Servicer, as expressly provided herein.
Section 3.04. Master Servicer to Act as Servicer
Subject to Sections 6.04 and 7.02, in the event that a Servicer shall for
any reason no longer be the servicer hereunder or under the Countrywide
Servicing Agreement (including by reason of an Event of Default), the Master
Servicer or its designee shall, within a period of time not to exceed ninety
(90) days from the date of notice of termination or resignation, thereupon
assume all of the rights and obligations of the Servicer hereunder arising
thereafter (except that the Master Servicer shall not be (i) liable for losses
arising out of any acts or omissions of the predecessor servicer hereunder, (ii)
obligated to make Advances or Servicing Advances if it is prohibited from doing
so by applicable law, (iii) obligated to effectuate repurchases or substitutions
of Mortgage Loans hereunder, including pursuant to Section 2.03 hereof, (iv)
responsible for any expenses of the Servicer pursuant to Section 2.03 or (v)
deemed to have made any representations and warranties hereunder or under the
Countrywide Servicing Agreement, including pursuant to Section 2.01 or the first
paragraph of Section 6.02 hereof; provided, however that the Master Servicer
(subject to clause (ii) above) or its designee, in its capacity as the successor
servicer, shall, if such Servicer is Wilshire, immediately assume the terminated
or resigning Servicer's obligation to make Advances and Servicing Advances). No
such termination or resignation shall affect any obligation of the Servicer to
pay amounts owed under this Agreement and to perform its duties under this
Agreement until its successor assumes all of its rights and obligations
hereunder. If the Servicer shall for any reason no longer be a servicer
(including by reason of any Event of Default), the Master Servicer (or any other
successor servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any subservicing agreement in accordance with the terms
thereof; provided, however, that the Master Servicer (or any other successor
servicer) shall not incur any liability or have any obligations in its capacity
as servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession. To the extent any costs or expenses, including
without limitation, Servicing Transfer Costs incurred by the Master Servicer in
connection with this Section 3.04 or Section 7.02, are not paid by the Servicer
pursuant to this Agreement within thirty (30)
9
days of the date of the Master Servicer's invoice thereof, such amounts shall be
payable out of the Payment Account; provided that if the Servicer has been
terminated by reason of an Event of Default, the terminated servicer shall
reimburse the Issuing Entity for any such expense incurred by the Issuing Entity
upon receipt of a reasonably detailed invoice evidencing such expenses. If the
Master Servicer is unwilling or unable to act as servicer, the Master Servicer
shall seek to appoint a successor servicer that is eligible in accordance with
the criteria specified in this Agreement.
The Servicer shall, upon request of the Master Servicer, but at the expense
of the Servicer if the Servicer has been terminated by reason of an Event of
Default, deliver to the assuming party all documents and records relating to
each subservicing agreement and the Mortgage Loans then being serviced and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
Section 3.05. Collection of Mortgage Loan Payments; Collection Account; Master
Servicer Collection Account; Payment Account
(a) The Servicer shall make reasonable efforts in accordance with Accepted
Servicing Practices to collect all payments called for under the terms and
provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge or, if applicable, any default
interest charge, or (ii) subject to Section 3.01, extend the due dates for
payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, 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, subject to Article IV herein, the
Servicer shall make any Advances on the related Mortgage Loan during the
scheduled period in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements.
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 Section 3.01, 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 or extend the final maturity date of such Mortgage Loan), 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 in determining
which course of action permitted by this sentence it shall pursue, the Servicer
shall adhere to the standards of Section 3.01. The Servicer's analysis
supporting any forbearance and the conclusion that any forbearance meets the
standards of Section 3.01 shall be reflected in writing in the Mortgage File.
(b) The Servicer will not waive any Prepayment Charge or portion thereof
unless, (i) the enforceability thereof shall have been limited by bankruptcy,
insolvency, moratorium, receivership or other similar laws relating to
creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment, or (iii) the Servicer has not
been provided with information sufficient to enable it to collect the Prepayment
Charge, or (iv) in the Servicer's reasonable judgment as described in Section
3.01 hereof, (x) such waiver relates to a default or a reasonably foreseeable
default, (y) such waiver would
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maximize recovery of total proceeds taking into account the value of such
Prepayment Charge and related Mortgage Loan and (z) doing so is standard and
customary in servicing similar Mortgage Loans (including any waiver of a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
related to a default or a reasonably foreseeable default), or (v) the collection
of the Prepayment Charge or of a similar type of prepayment premium would be
considered "predatory" or "illegal" pursuant to written guidance published by
any applicable federal, state or local regulatory authority having jurisdiction
over such matters or has been challenged by any such authority, or (vi) there is
a certified class action in which a similar type of prepayment premium is being
challenged. Except as provided in the preceding sentence, in no event will the
Servicer waive a Prepayment Charge in connection with a refinancing of a
Mortgage Loan that is not related to a default or a reasonably foreseeable
default. If the Servicer waives or does not collect all or a portion of a
Prepayment Charge relating to a Principal Prepayment in full or in part due to
any action or omission of the Servicer, other than as provided above, the
Servicer shall deposit the amount of such Prepayment Charge (or such portion
thereof as had been waived for deposit) into its Collection Account for
distribution in accordance with the terms of this Agreement.
(c) The Servicer shall not be required to institute or join in litigation
with respect to collection of any payment (whether under a Mortgage, Mortgage
Note or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that enforcing the
provision of the Mortgage or other instrument pursuant to which such payment is
required is prohibited by applicable law.
(d) The Servicer shall establish and initially maintain, on behalf of the
Securityholders, a Collection Account, in the name of the Indenture Trustee for
the benefit of the Securityholders. The Servicer shall deposit into such
Collection Account daily, within two (2) Business Days of receipt thereof, in
immediately available funds, the following payments and collections received or
made by it on and after the Cut-off Date with respect to the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans, other than principal due on the
Mortgage Loans on or prior to the Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans net of
the Servicing Fee permitted under Section 3.15, other than (x) interest due
on the Mortgage Loans on or prior to the Cut-off Date and (y) Prepayment
Interest Excess;
(iii) all Liquidation Proceeds, other than proceeds to be applied to
the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Servicer's normal servicing procedures;
(iv) all Subsequent Recoveries;
(v) all Compensating Interest;
(vi) any amount required to be deposited by the Servicer pursuant to
Section 3.05(g) in connection with any losses on Permitted Investments;
(vii) any amounts required to be deposited by the Servicer pursuant to
Section 3.10 hereof;
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(viii) all Advances made by the Servicer pursuant to Section 4.01
hereof;
(ix) all Prepayment Charges; and
(x) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicer into its
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, late payment charges,
insufficient funds charges and payments in the nature of assumption fees (i.e.
fees related to the assumption of a Mortgage Loan upon the purchase of the
related Mortgaged Property and other similar ancillary fees (other than
Prepayment Charges) if collected, and any Prepayment Interest Excess) need not
be remitted by the Servicer. Rather, such fees and charges may be retained by
the Servicer as additional servicing compensation. In the event that the
Servicer shall remit any amount not required to be remitted and not otherwise
subject to withdrawal pursuant to Section 3.08 hereof, it may at any time
withdraw or direct the Securities Administrator, or such other institution
maintaining its Collection Account, to withdraw such amount from its Collection
Account, any provision herein to the contrary notwithstanding. The Servicer
shall maintain adequate records with respect to all withdrawals made pursuant to
this Section. All funds deposited by the Servicer in its Collection Account
shall be held in trust for the Securityholders until withdrawn in accordance
with Section 3.08. In no event shall the Securities Administrator or the Master
Servicer incur liability for withdrawals from the related Collection Account at
the direction of the Servicer.
The Servicer shall give notice to the Securities Administrator, the Master
Servicer and the Indenture Trustee of the location of the Collection Account
maintained by it when established and prior to any change thereof. Not later
than twenty (20) days after each Payment Date, the Servicer shall forward to the
Securities Administrator, the Master Servicer and the Depositor the most current
available bank statement for its Collection Account. Copies of such statement
shall be provided by the Securities Administrator to any Securityholder and to
any Person identified to the Securities Administrator as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Servicer to the Securities
Administrator.
(e) The Master Servicer shall establish and maintain, on behalf of the
Securityholders, the Master Servicer Collection Account, in the name of the
Indenture Trustee for the benefit of the Securityholders. The Master Servicer
shall, promptly upon receipt from or on behalf of the related Servicer, deposit
or cause to be deposited in the Master Servicer Collection Account and retain
therein the following:
(i) Any amounts withdrawn from a Protected Account or other permitted
account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds, Liquidation Proceeds or Subsequent
Recoveries received by or on behalf of the Master Servicer or
which were not deposited in a Collection Account or other
permitted account;
(iv) The repurchase price with respect to any Mortgage Loans
repurchased and all proceeds of any Mortgage Loans or property
acquired in connection with the optional redemption of the Trust
Estate;
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(v) Any amounts required to be deposited by the Master Servicer
pursuant to Section 3.05(g) with respect to losses on Permitted
Investments; and
(vi) Any other amounts received by or on behalf of the Master Servicer
and required to be deposited in the Master Servicer Collection
Account pursuant to this Agreement.
Any amounts received by the Master Servicer prior to 4:00 p.m. New York
City time (or such earlier deadline for investment in the Permitted Investments
designated by the Securities Administrator) which are required to be deposited
in the Master Servicer Collection Account by the Servicers may (but are not
required to be) be invested for the benefit of the Master Servicer in Permitted
Investments on the Business Day on which they were received. The requirements
for remittance by the Servicer in Section 3.08 hereof and deposit by the Master
Servicer into the Master Servicer Collection Account shall be exclusive. If the
Servicer fails to remit any funds due by the time designated herein, the
Servicer shall pay to the Master Servicer, for its own account, interest accrued
on such funds at the prime rate as set forth in The Wall Street Journal from and
including the applicable due date, to but excluding the day such funds are paid
to the Master Servicer. In the event that the Servicer shall remit any amount
not required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time withdraw such amount from the Master
Servicer Collection Account, any provision herein to the contrary
notwithstanding. All funds deposited in the Master Servicer Collection Account
shall be held by the Master Servicer in trust for the Securityholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 3.08. In no event shall the Master Servicer incur liability for
withdrawals from the Master Servicer Collection Account at the direction of a
Servicer. The Master Servicer shall give notice to each Servicer of the location
of the Master Servicer Collection Account maintained by it when established and
prior to any change thereof.
(f) The Securities Administrator shall establish and maintain, on behalf of
the Securityholders, the Payment Account, in the name of the Indenture Trustee
for the benefit of the Securityholders. The Securities Administrator shall,
promptly upon receipt, deposit or cause to be deposited in the Payment Account
and retain therein the following:
(i) the aggregate amount withdrawn by the Master Servicer from the
Master Servicer Collection Account for deposit in the Payment Account;
(ii) any amount required to be deposited by the Securities
Administrator pursuant to Section 3.05(g) in connection with any losses on
Permitted Investments; and
(iii) any amount received in connection with an Optional Redemption of
the Notes.
Any amounts received by the Securities Administrator prior to 4:00 p.m. New
York City time (or such earlier deadline for investment in the Permitted
Investments designated by the Securities Administrator) which are required to be
deposited in the Payment Account by the Master Servicer may be invested for the
benefit of the Securities Administrator in Permitted Investments on the Business
Day on which they were received. The foregoing requirements for remittance by
the Master Servicer and deposit by the Securities Administrator into the Payment
Account shall be exclusive. If the Master Servicer fails to remit any funds due
by the time designated herein, the Master Servicer shall pay to the Securities
Administrator, for its own account, interest accrued on such funds at the prime
rate as set forth in The Wall Street Journal from and including the applicable
due date, to but excluding the day such funds are
13
paid to the Securities Administrator. In the event that the Master Servicer
shall remit any amount not required to be remitted and not otherwise subject to
withdrawal pursuant to Section 3.08 hereof, it may at any time withdraw such
amount from the Payment Account, any provision herein to the contrary
notwithstanding. All funds deposited in the Payment Account shall be held by the
Securities Administrator in trust for the Securityholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08. In
no event shall the Securities Administrator incur liability for withdrawals from
the Payment Account at the direction of the Master Servicer. The Securities
Administrator shall give notice to the Master Servicer of the location of the
Payment Account maintained by it when established and prior to any change
thereof.
(g) Each institution that maintains a Collection Account, the Master
Servicer Collection Account and the Payment Account may but shall not be
required to, invest the funds in each such account, as directed by the Servicer,
the Master Servicer or the Securities Administrator, as applicable, in writing,
in Permitted Investments, which shall mature not later than (i) in the case of
the Collection Account, the Business Day preceding the related Servicer
Remittance Date (except that if such Permitted Investment is an obligation of
the institution that maintains such Collection Account or is otherwise
immediately available, then such Permitted Investment shall mature not later
than the related Servicer Remittance Date), (ii) in the case of the Master
Servicer Collection Account, the Business Day preceding the Deposit Date (except
that if such Permitted Investment is an obligation of the institution that
maintains such Master Servicer Collection Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than the
Deposit Date) and (iii) in the case of the Payment Account, the Business Day
immediately preceding the first Payment Date that follows the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains such Payment Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than such
Payment Date) and, in each case, shall not be sold or disposed of prior to its
maturity. All such Permitted Investments shall be made in the name of the
Securities Administrator for the benefit of the Securityholders. All income and
gain net of any losses realized from amounts on deposit in the related
Collection Account, and any other benefits arising from the Collection Account,
shall be for the benefit of the Servicer as servicing compensation and shall be
remitted to it monthly as provided herein. The amount of any losses incurred in
the Collection Account in respect of any such investments shall be deposited by
the Servicer in the Collection Account out of the Servicer's own funds
immediately as realized. All income and gain net of any losses realized from
amounts on deposit in the Master Servicer Collection Account, and any other
benefits arising from the Master Servicer Collection Account, shall be for the
benefit of the Master Servicer and shall be remitted to or withdrawn by it
monthly as provided herein. The amount of any losses incurred in the Master
Servicer Collection Account in respect of any such investments shall be
deposited by the Master Servicer in the Master Servicer Collection Account out
of the Master Servicer's own funds immediately as realized. All income and gain
net of any losses realized from amounts on deposit in the Payment Account shall
be for the benefit of the Securities Administrator and shall be remitted to or
withdrawn by it monthly as provided herein. The amount of any losses incurred in
the Payment Account in respect of any such investments shall be deposited by the
Securities Administrator in the Payment Account out of the Securities
Administrator's own funds immediately as realized.
Section 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts
To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance
14
premiums or comparable items for the account of the Mortgagors. Nothing herein
shall require the Servicer to compel a Mortgagor to establish an Escrow Account
in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
Servicer out of related collections for any payments made pursuant to Sections
3.01 hereof (with respect to taxes and assessments and insurance premiums) and
3.10 hereof (with respect to hazard insurance), to refund to any Mortgagors any
sums as may be determined to be overages, to pay interest, if required by law or
the terms of the related Mortgage or Mortgage Note, to Mortgagors on balances in
the Escrow Account or to clear and terminate the Escrow Account at the
termination of this Agreement in accordance with Section 8.08 hereof. The Escrow
Accounts shall not be a part of the Trust Estate.
Section 3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Securityholder that is a savings
and loan association, bank or insurance company certain reports and reasonable
access to information and documentation regarding the Mortgage Loans sufficient
to permit such Securityholder to comply with applicable regulations of the OTS
or other regulatory authorities with respect to investment in the Securities;
provided, that the Servicer shall be entitled to be reimbursed by each such
Securityholder for actual expenses incurred by the Servicer in providing such
reports and access.
The Servicer may from time to time provide the Depositor or the Master
Servicer, and any Person designated by the Depositor or Master Servicer, with
reports and information regarding the Mortgage Loans, including without
limitation, information requested by the Depositor or an originator of the
Mortgage Loans for required institutional risk control. In addition, subject to
limitations of applicable privacy laws, the Servicer may make public information
regarding performance of the Mortgage Loans.
Section 3.08. Permitted Withdrawals from the Collection Account, the Master
Servicer Collection Account and Payment Account
(a) The Servicer may from time to time, make withdrawals from the
applicable Collection Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously paid to or
withheld by the Servicer), as servicing compensation in accordance with
Section 3.15, that portion of any payment of interest that equals the
Servicing Fee for the period with respect to which such interest payment
was made, and, as additional servicing compensation, those other amounts
set forth in Section 3.15;
(ii) to reimburse the Servicer (or the Master Servicer as successor
servicer) for Advances made by it (or to reimburse the advance financing
person for Advances made by it) with respect to the Mortgage Loans, such
right of reimbursement pursuant to this subclause (ii) being limited to
amounts received on particular Mortgage Loan(s) (including, for this
purpose, Liquidation Proceeds) that represent late recoveries of payments
of principal and/or interest on such particular Mortgage Loan(s) in respect
of which any such Advance was made;
15
(iii) to reimburse the Servicer for any Non-Recoverable Advance
previously made and any Non-Recoverable Servicing Advances previously made
to the extent that, in the case of Non-Recoverable Servicing Advances,
reimbursement therefor constitutes "unanticipated expenses" within the
meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(iv) to pay to the Servicer earnings on or investment income with
respect to funds in or credited to the Collection Account;
(v) to reimburse the Servicer from Insurance Proceeds for Insured
Expenses covered by the related Insurance Policy;
(vi) [reserved];
(vii) to pay the Servicer (or the Master Servicer as successor
servicer) any unpaid Servicing Fees and to reimburse it for any
unreimbursed Servicing Advances (to the extent that reimbursement for
Servicing Advances would constitute an "unanticipated expense" within the
meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)), the Servicer's
right to reimbursement of Servicing Advances pursuant to this subclause
(vii) with respect to any Mortgage Loan being limited to amounts received
on particular Mortgage Loan(s)(including, for this purpose, Liquidation
Proceeds and purchase and repurchase proceeds) that represent late
recoveries of the payments for which such advances were made pursuant to
Section 3.01 or Section 3.06;
(viii) to pay to the Depositor or Servicer, as applicable, with
respect to each Mortgage Loan or property acquired in respect thereof that
has been purchased pursuant to Section 2.03 or 3.12, all amounts received
thereon and not taken into account in determining the related Stated
Principal Balance of such repurchased Mortgage Loan;
(ix) to reimburse the Servicer, the Master Servicer, the Securities
Administrator or the Depositor for expenses incurred by any of them in
connection with the Mortgage Loans or Securities and reimbursable pursuant
to the provisions of this Agreement, the Countrywide Servicing Agreement or
the Indenture provided that reimbursement therefor would constitute
"unanticipated" expenses within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii);
(x) to reimburse the Indenture Trustee or the Master Servicer for
expenses and indemnities reasonably incurred in respect of a breach or
defect giving rise to the purchase obligation in Section 2.03 that were
incurred in the Purchase Price of the Mortgage Loans including any expenses
arising out of the enforcement of the purchase obligation; provided that
any such expenses will be reimbursable under this subclause (x) only to the
extent that such expenses would constitute "unanticipated expenses" within
the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii) if paid by
one of the REMICs provided for in the Indenture;
(xi) to pay the Servicer any unpaid Servicing Fees for any Mortgage
Loan upon such Mortgage Loan being charged off and upon termination of the
obligations of the Servicer;
(xii) to withdraw pursuant to Section 3.05 any amount deposited in the
Collection Account and not required to be deposited therein; and
16
(xiii) to clear and terminate the Collection Account upon termination
of this Agreement pursuant to Section 8.08 hereof.
In addition, the Servicer will use commercially reasonable efforts to cause
to be withdrawn from the Collection Account no later than 2:30 p.m. New York
City time, but in any case no later than 4:00 p.m. New York City time on the
related Servicer Remittance Date, the Interest Funds and the Principal Funds
(for this purpose only, neither Interest Funds nor Principal Funds shall include
a deduction for any amount reimbursable to the Master Servicer, Securities
Administrator or Indenture Trustee unless such amounts have actually been
reimbursed from such funds at the discretion of the Master Servicer), to the
extent on deposit, and such amount shall be deposited in the Master Servicer
Collection Account; provided, however, if the Master Servicer does not receive
such Interest Funds and Principal Funds by 4:00 p.m. on the related Servicer
Remittance Date, the Servicer shall pay, out of its own funds, interest on such
amount at a rate equal to the "prime rate" as published by The Wall Street
Journal at such time for each date or part thereof.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account.
The Servicer shall provide written notification to the Master Servicer on
or prior to the next succeeding Servicer Remittance Date upon making any
withdrawals from the Collection Account pursuant to subclauses (iii) and (vii)
above.
Unless otherwise specified, any amounts reimbursable to either Servicer or
the Securities Administrator from amounts on deposit in the Collection Account,
Master Servicer Collection Account or the Payment Account shall be deemed to
come from first, Interest Funds, and thereafter, Principal Funds for the related
Payment Date.
(b) (i) The Master Servicer will, from time to time on demand of the
Servicer, the Indenture Trustee, the Custodians or the Securities
Administrator, make or cause to be made such withdrawals or transfers from
the Master Servicer Collection Account as the Master Servicer has
designated for such transfer or withdrawal pursuant to the Indenture or
other Operative Documents. The Master Servicer may clear and terminate the
Master Servicer Collection Account pursuant to Section 3A.04 and remove
amounts from time to time deposited in error.
(ii) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (x) any expenses recoverable by the
Indenture Trustee, Custodians, the Master Servicer or the Securities
Administrator pursuant to this Agreement (or other Operative Documents),
including but not limited to Sections 3A.02 and 3A.07 and (y) any amounts
payable to the Master Servicer.
(iii) In addition, on or before each Deposit Date, the Master Servicer
shall deposit in the Payment Account (or remit to the Securities
Administrator for deposit therein) any Monthly Advances required to be made
by the Master Servicer with respect to the Mortgage Loans.
(iv) No later than 3:00 p.m. New York time on each Deposit Date, the
Master Servicer will transfer all Available Funds on deposit in the Master
Servicer Collection Account with respect to the related Payment Date to the
Securities Administrator for deposit in the Payment Account.
17
(v) The Master Servicer will from time to time, upon notification from
Countrywide, remit available principal collections on the Distribution Date
in an amount equal to unreimbursed draws, including HELOC Draw Advances,
due to Countrywide as of the end of the prior Due Period, pursuant to
Section 3.03 of the Countrywide Servicing Agreement.
(c) The Securities Administrator shall withdraw funds from the Payment
Account for distribution to the Securityholders in the manner specified in the
Indenture (and shall withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to this Agreement). In addition,
prior to making such distributions to the Securityholders, the Securities
Administrator may from time to time make withdrawals from the Payment Account
for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited in the
Payment Account and not required to be deposited therein;
(ii) to clear and terminate the Payment Account upon termination of
the Agreement pursuant to Section 8.08 hereof (after paying all amounts
necessary to the Indenture Trustee, the Securities Administrator, Master
Servicer or any Servicer in connection with any such termination);
(iii) to reimburse Countrywide for any unreimbursed draws due to it as
of the end of the prior Due Period, to the extent not reimbursed out of the
Master Servicer Collection Account pursuant to Section 3.08(b)(v) herein,
pursuant to Section 3.03 of the Countrywide Servicing Agreement.
(iv) to reimburse the Securities Administrator, the Custodians, the
Master Servicer or the Indenture Trustee for any fees, expenses,
disbursements and indemnification reimbursable pursuant to this Agreement,
including without limitation Sections 3.04 and 6.03 hereof and Section 6.07
in the Indenture; and
(v) to pay to the Securities Administrator earnings on or investment
income with respect to funds in or credited to the Payment Account.
Section 3.09. [Reserved]
Section 3.10. Maintenance of Hazard Insurance
The Servicer shall cause to be maintained, for each first lien Mortgage
Loan, hazard insurance with extended coverage in an amount, to the extent
permitted by applicable law, that is at least equal to the lesser of (i) the
estimated replacement value of the improvements that are part of such Mortgaged
Property which may be the last known coverage, and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such that
the proceeds of such policy shall be sufficient to prevent the related Mortgagor
and/or mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Servicer shall also cause flood insurance to be
maintained on property acquired upon foreclosure or deed in lieu of foreclosure
of any Mortgage Loan, to the extent required under the standards described
below. Pursuant to Section 3.05 hereof, any amounts collected by the Servicer
under any such policies (other than the amounts to be applied to the restoration
or repair of the related Mortgaged Property or property thus acquired or amounts
released to the Mortgagor in accordance with
18
the Servicer's normal servicing procedures) shall be deposited in its Collection
Account. Any cost incurred by the Servicer in maintaining any such insurance
shall not, for the purpose of calculating monthly distributions to the
Securityholders or remittances to the Master Servicer for their benefit, be
added to the principal balance of the Mortgage Loan, notwithstanding that the
terms of the Mortgage Loan so permit. Such costs shall be recoverable by the
Servicer out of late payments by the related Mortgagor or out of Liquidation
Proceeds to the extent and as otherwise permitted by Section 3.08 hereof. It is
understood and agreed that no earthquake or other additional insurance is to be
required of any Mortgagor or maintained on property acquired in respect of a
Mortgage other than pursuant to such applicable laws and regulations as shall at
any time be in force and as shall require such additional insurance. If a first
lien Mortgaged Property is located at the time of origination of the Mortgage
Loan in a federally designated special flood hazard area and such area is
participating in the national flood insurance program, the Servicer shall cause
flood insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the lesser of (i) the outstanding
principal balance of the related Mortgage Loan, (ii) the estimated replacement
value of the improvements that are part of such Mortgaged Property which may be
the last known coverage, or (iii) the maximum amount of such insurance available
for the related Mortgaged Property under the Flood Disaster Protection Act of
1973, as amended.
In the event that the Servicer shall obtain and maintain a blanket policy
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.10, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection 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 Servicer agrees to present, on behalf of itself, the
Master Servicer, the Depositor, the Securities Administrator and the Indenture
Trustee for the benefit of the Securityholders, claims under any such blanket
policy.
Section 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, except as set forth below, to the extent it has
knowledge of such conveyance or prospective conveyance, exercise its rights to
accelerate the maturity of the related Mortgage Loan under any "due-on-sale"
clause contained in the related Mortgage or Mortgage Note; provided, however,
that the Servicer shall not exercise any such right if the "due-on-sale" clause,
in the reasonable belief of the Servicer, is not enforceable under applicable
law; provided, further, that the Servicer shall not take any action in relation
to the enforcement of any "due-on-sale" clause that would adversely affect or
jeopardize coverage under any Required Insurance Policy. In addition to the
foregoing, the Servicer shall not be required to enforce any "due-on-sale"
clause if in the reasonable judgment of the Servicer entering into an assumption
and modification agreement with the Person to whom such property shall be
conveyed and releasing the original Mortgagor from liability would be in the
best interests of the Securityholders. An Opinion of Counsel at the expense of
the Servicer (which expense shall constitute a Servicing Advance) delivered to
the Master Servicer, Indenture Trustee and the Depositor shall conclusively
establish the reasonableness of the Servicer's belief that any "due-on-sale"
clause is not enforceable under applicable law. In such event, the Servicer
shall make reasonable efforts to enter into an assumption and modification
agreement
19
with the Person to whom such property has been or is about to be conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and, unless
prohibited by applicable law or the Mortgage, the Mortgagor remains liable
thereon. If the foregoing is not permitted under applicable law, the Servicer is
authorized to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Note. In
addition to the foregoing, the Servicer shall not be required to enforce any
"due-on-sale" clause if in the reasonable judgment of the Servicer, entering
into an assumption and modification agreement with a Person to whom such
property shall be conveyed and releasing the original Mortgagor from liability
would be in the best interests of the Securityholders. The Mortgage Loan, as
assumed, shall conform in all respects to the requirements, representations and
warranties of this Agreement. The Servicer shall notify the Master Servicer and
the Custodian that any such assumption or substitution agreement has been
completed and shall forward to the Custodian the original copy of such
assumption or substitution agreement (indicating the Mortgage File to which it
relates), which copy shall be added by the Custodian to the related Mortgage
File and which 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. The Servicer shall be responsible for recording any such
assumption or substitution agreements. In connection with any such assumption or
substitution agreement, the Monthly Payment on the related Mortgage Loan shall
not be changed but shall remain as in effect immediately prior to the assumption
or substitution, the stated maturity or outstanding principal amount of such
Mortgage Loan shall not be changed nor shall any required monthly payments of
principal or interest be deferred or forgiven. Any fee collected by the Servicer
for consenting to any such conveyance or entering into an assumption or
substitution agreement shall be retained by or paid to the Servicer as
additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds; Special Loss Mitigation
(a) The Servicer shall use reasonable efforts consistent with the servicing
standard set forth in Section 3.01 to foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of Delinquent payments. In connection with such foreclosure
or other conversion, the Servicer shall follow such practices and procedures as
it shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities and the requirements of the insurer under
any Required Insurance Policy; provided, however, that the Servicer shall not be
required to expend its own funds in connection with the restoration of any
property that shall have suffered damage due to an uninsured cause unless it
shall determine (i) that such restoration will increase the proceeds of
liquidation of the Mortgage Loan after reimbursement to itself of such expenses
and (ii) that such expenses will be recoverable to it through Liquidation
Proceeds (respecting which it shall have priority for purposes of withdrawals
from the Collection Account pursuant to Section 3.08 hereof). The Servicer shall
be responsible for all other costs and expenses incurred by it in any such
proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the proceeds of liquidation of the related Mortgaged Property, as
contemplated in Section 3.08 hereof. If the Servicer has knowledge that a
Mortgaged Property that it is contemplating acquiring in foreclosure or by
deed-in-lieu of foreclosure is located within a one-mile radius of any site with
environmental or hazardous waste risks
20
known to the Servicer, the Servicer will, prior to acquiring the Mortgaged
Property, consider such risks and only take action in accordance with Accepted
Servicing Practices.
With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Indenture Trustee or its nominee. Pursuant to its
efforts to sell such REO Property, the Servicer shall either itself or through
an agent selected by the Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Securityholders, rent the same, or any part thereof, as the
Servicer deems to be in the best interest of the Servicer and the
Securityholders for the period prior to the sale of such REO Property. The
Servicer or an Affiliate thereof may receive usual and customary real estate
referral fees for real estate brokers in connection with the listing and
disposition of REO Property. The Servicer shall prepare a statement with respect
to each REO Property that has been rented showing the aggregate rental income
received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Servicer to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Collection Account no later than the close of business on each Determination
Date. The Servicer shall perform the tax reporting and withholding related to
foreclosures, abandonments and cancellation of indebtedness income as specified
by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax
and information returns, as may be required. A copy of such statements and
reports will be delivered to the Master Servicer by the Servicer.
In the event that the Issuing Entity acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
the expiration of three years from the end of the year of its acquisition by the
Issuing Entity or, at the expense of the Issuing Entity, obtain, in accordance
with applicable procedures for obtaining an automatic extension of the grace
period, more than sixty (60) days prior to the day on which such three-year
period would otherwise expire, an extension of the three-year grace period, in
which case such property must be disposed of prior to the end of such extension,
unless the Indenture Trustee shall have been supplied with an Opinion of Counsel
(such Opinion of Counsel not to be an expense of the Master Servicer, Securities
Administrator or the Indenture Trustee), to the effect that the holding by the
Issuing Entity of such Mortgaged Property subsequent to such three-year period
or extension will not result in the imposition of taxes on "prohibited
transactions" of the Issuing Entity or any of the REMICs provided for in the
Indenture as defined in section 860F of the Code or cause any of the REMICs
provided for in the Indenture to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Issuing Entity may continue to
hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel). Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Issuing Entity shall be held, rented (or
allowed to continue to be rented) or otherwise used for the production of income
by or on behalf of the Issuing Entity in such a manner or pursuant to any terms
that would (i) cause such Mortgaged Property to fail to qualify as "foreclosure
property" within the meaning of section 860G(a)(8) of the Code or (ii) subject
the Issuing Entity or any REMIC provided for in the Indenture to the imposition
of any federal, state or local income taxes on the income earned from such
Mortgaged Property under section 860G(c) of the Code or otherwise, unless the
Servicer or the Depositor has agreed to indemnify and hold harmless the
Indenture Trustee and the Trust Estate with respect to the imposition of any
such taxes.
The Servicer agrees not to knowingly or intentionally take any action or
omit to take any action that would cause the termination of the REMIC status of
any of the REMICs provided for in the Indenture or result in the imposition of a
tax upon any of the REMICs provided for in the Indenture. In the event
21
that any REMIC provided for in the Indenture fails to qualify as a REMIC, loses
its status as a REMIC or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Servicer of its duties and obligations set
forth herein, the Servicer shall indemnify the Indenture Trustee, the Securities
Administrator, the Master Servicer and the Issuing Entity against any and all
losses resulting from such negligence; provided, however, that the Servicer
shall not be liable for any such losses attributable to the action or inaction
of the Indenture Trustee, the Master Servicer, the Securities Administrator, the
Depositor or the holder of the residual interest in such REMIC, as applicable,
nor for any such losses resulting from misinformation provided by the holder of
the residual interest in such REMIC on which the Servicer has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the holder of the residual interest in such REMIC now or hereafter existing at
law or in equity. Notwithstanding the foregoing, however, in no event shall the
Servicer have any liability (1) for any action or omission that is taken in
accordance with and in compliance with the express terms of, or which is
expressly permitted by the terms of, this Agreement, (2) for any losses other
than those arising out of a negligent performance by the Servicer of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Securityholders (in addition to payment of principal and interest on
the Securities).
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in this Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into the related Collection Account. To the extent the income
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of
any payment to the Servicer as provided above, shall be deposited in the related
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Payment Date.
The proceeds of any Liquidated Loan, as well as any recovery resulting from
a partial collection of Liquidation Proceeds, will be applied as between the
parties in the following order of priority: first, to reimburse the Servicer for
any related unreimbursed Servicing Advances and unpaid Servicing Fees, pursuant
to Section 3.08(a)(vii) or this Section 3.12; second, to reimburse the Servicer
(or Master Servicer, as applicable) for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest
(to the extent no Advance has been made for such amount) on the Mortgage Loan,
at the Net Mortgage Rate to the Due Date occurring in the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of the Mortgage Loan; and fifth, to any Prepayment Charges.
The proceeds of any net income from any REO Property will be applied as
between the parties in the following order of priority: first, to reimburse the
Servicer (or the Master Servicer, as applicable) for
22
any related unreimbursed Servicing Advances and unpaid Servicing Fees, pursuant
to Section 3.08(a)(vii) or this Section 3.12; second, to reimburse the Servicer
(or the Master Servicer, as applicable) for any unreimbursed Advances, pursuant
to Section 3.08(a)(ii) or this Section 3.12; third, as a recovery of principal;
and fourth, to accrued and unpaid interest (to the extent no Advance has been
made for such amount) on the related REO property, at the applicable Net
Mortgage Rate to the Due Date occurring in the month in which such amounts are
required to be distributed.
(b) On each Determination Date, the Servicer shall determine the respective
aggregate amounts of Excess Proceeds, if any, that occurred in the related
Prepayment Period.
(c) [Reserved]
(d) With respect to such of the Mortgage Loans as come into and continue in
default, the Servicer will decide, in its reasonable business judgment, whether
to (i) foreclose upon the Mortgaged Properties securing those Mortgage Loans
pursuant to Section 3.12(a), (ii) write off the unpaid principal balance of the
Mortgage Loans as bad debt (provided that the Servicer has determined that no
net recovery is possible through foreclosure proceedings or other liquidation of
the related Mortgaged Property), (iii) take a deed in lieu of foreclosure, (iv)
accept a short sale or short refinance; (v) arrange for a repayment plan or
refinancing, or (vi) agree to a modification of such Mortgage Loan. As to any
Mortgage Loan that becomes 120 days delinquent, the Servicer shall have obtained
or shall obtain a broker's price opinion, the cost of which will be reimbursable
as a Servicing Advance. After obtaining the broker's price opinion, the Servicer
will determine, in its reasonable business judgment, whether a net recovery is
possible through foreclosure proceedings or other liquidation of the related
Mortgage Property. If the Servicer determines that no such recovery is possible,
it must charge off the related Mortgage Loan at the time it becomes 180 days
delinquent. Once a Mortgage Loan has been charged off, the Servicer will
discontinue making Advances, the Servicer will not be entitled to future
Servicing Fees (except as provided below) with respect to such Mortgage Loan,
and the Mortgage Loan will be treated as a Liquidated Mortgage Loan. If the
Servicer determines that such net recovery is possible through foreclosure
proceedings or other liquidation of the related Mortgaged Property on a Mortgage
Loan that becomes 180 days delinquent, the Servicer need not charge off the
Mortgage Loan and may continue making Advances, the Servicer will continue to be
entitled to Servicing Fees, and the Servicer will be required to notify the
Indenture Trustee, the Master Servicer and the Securities Administrator of such
decision.
(e) Any Mortgage Loan that is charged off, pursuant to (d) above, may
continue to be serviced by the Servicer for the Securityholders using
specialized collection procedures (including foreclosure, if appropriate). The
Servicer will be entitled to Servicing Fees and reimbursement of expenses in
connection with such Mortgage Loans after the date of charge off, only to the
extent of funds available from any recoveries on any such Mortgage Loans. Any
such Mortgage Loans serviced in accordance with the specialized collection
procedures shall be serviced for approximately six months. Any net recoveries
received on such Mortgage Loans during such six month period will be treated as
Subsequent Recoveries. On the date which is six months after the date on which
the Servicer begins servicing such Mortgage Loans using the specialized
collection procedures, unless specific net recoveries are anticipated by the
Servicer on a particular Mortgage Loan, such charged off loan will be released
to the majority holder of the Class C Certificates and thereafter, (i) the
majority holder of the Class C Certificates, as identified with contact
information in writing to the Servicer by the Depositor, will be entitled to any
amounts subsequently received in respect of any such released loans, subject to
the Servicer's fees described below, (ii) the majority holder of the Class C
Certificates may designate any
23
servicer to service any such released loan, (iii) the majority holder of the
Class C Certificates may sell any such released loan to a third party and (iv)
to the extent the servicing of such charged off loan is not transferred from the
Servicer, the servicing of such charged off loan and the fees therefor shall be
governed by the most current servicing agreement between the Servicer and the
Sponsor.
Section 3.13. Custodian to Cooperate; 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 will promptly notify the related
Custodian by delivering a Request for Release substantially in the form of
Exhibit C. Upon receipt of a copy of such request, such Custodian shall promptly
release the related Mortgage File to the Servicer, the cost of which may be
charged to the Servicer by the Custodian, and the Servicer is authorized to
cause the removal from the registration on the MERS System of any such Mortgage
if applicable, and the Servicer, on behalf of the Indenture Trustee shall
execute and deliver the request for reconveyance, deed of reconveyance or
release or satisfaction of mortgage or such instrument releasing the lien of the
Mortgage together with the Mortgage Note with written evidence of cancellation
thereon. Expenses incurred in connection with any instrument of satisfaction or
deed of reconveyance shall be chargeable to the Mortgagor to the extent
permitted by law, and otherwise to the Trust Estate to the extent such expenses
constitute "unanticipated expenses" within the meaning of Treasury Regulations
Section 1.860G-(1)(b)(3)(ii). From time to time and as shall be appropriate for
the servicing or foreclosure of any Mortgage Loan, including for collection
under any policy of flood insurance, any fidelity bond or errors or omissions
policy, or for the purposes of effecting a partial release of any Mortgaged
Property from the lien of the Mortgage or the making of any corrections to the
Mortgage Note or the Mortgage or any of the other documents included in the
Mortgage File, the related Custodian shall, upon delivery to such Custodian of a
Request for Release in the form of Exhibit C signed by a Servicing Officer,
release the Mortgage File to the Servicer, and the cost of delivery of the
Mortgage File may be charged to the Servicer by such Custodian. Subject to the
further limitations set forth below, the Servicer shall cause the Mortgage File
or documents so released to be returned to the related Custodian when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan is
liquidated and the proceeds thereof are deposited in its Collection Account.
Each Request for Release may be delivered to the related Custodian (i) via
mail or courier, (ii) via facsimile or (iii) by such other means, including,
without limitation, electronic or computer readable medium, as the Servicer and
such Custodian shall mutually agree. The Custodian shall release the related
Mortgage File(s) within four (4) Business Days of receipt of a properly
completed Request for Release pursuant to clauses (i), (ii) or (iii) above.
Receipt of a properly completed Request for Release shall be authorization to
the Custodian to release such Mortgage Files, provided the Custodian has
determined that such Request for Release has been executed, with respect to
clauses (i) or (ii) above, or approved, with respect to clause (iii) above, by
an authorized Servicing Officer of the Servicer, and so long as the Custodian
complies with its duties and obligations under this Agreement and its Custodial
Agreement. If the Custodian is unable to release the Mortgage Files within the
period previously specified, the Custodian shall immediately notify the Servicer
indicating the reason for such delay. The Servicer shall not pay penalties or
damages due to the Custodian's negligent failure to release the related Mortgage
File or the Indenture Trustee's or its designee's negligent failure to execute
and release documents in a timely manner, and such amounts shall be Servicer
Advances.
On each day that the Servicer remits to the Custodian Requests for Releases
pursuant to clauses (ii) or (iii) above, the Servicer shall also submit to the
Custodian a summary of the total number of such
24
Requests for Releases requested on such day by the same method as described in
such clauses (ii) and (iii) above.
If the Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, the Servicer
may deliver or cause to be delivered to the Indenture Trustee for signature,
execute any court pleadings, requests for trustee's sale or other documents
necessary to effectuate such foreclosure or any legal action brought to obtain
judgment against the Mortgagor on the Mortgage Note or the Mortgage or to obtain
a deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the Mortgage or otherwise available at law or in equity.
Notwithstanding the foregoing, the Servicer shall cause possession of any
Mortgage File or of the documents therein that shall have been released by the
Custodian to be returned to the Custodian promptly after possession thereof
shall have been released by the Custodian unless (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Collection Account, and the Servicer shall have delivered to
the Custodian a Request for Release in the form of Exhibit C or (ii) the
Mortgage File or document shall have 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 and the Servicer shall have delivered to the Custodian an
Officer's Certificate of a Servicing Officer certifying as to the name and
address of the Person to which the Mortgage File or the documents therein were
delivered and the purpose or purposes of such delivery.
Section 3.14. Documents, Records and Funds in Possession of Servicer to be Held
for the Indenture Trustee.
All Mortgage Files and funds collected or held by, or under the control of,
the Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including but not
limited to, any funds on deposit in its Collection Account shall be held by the
Servicer for and on behalf of the Indenture Trustee and shall be and remain the
sole and exclusive property of the Trust Estate, subject to the applicable
provisions of this Agreement. The Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
Collection Account, the Master Servicer Collection Account or the Payment
Account or in any Escrow Account, or any funds that otherwise are or may become
due or payable to the Indenture Trustee or the Securities Administrator for the
benefit of the Securityholders, to any claim, lien, security interest, judgment,
levy, writ of attachment or other encumbrance, or assert by legal action or
otherwise any claim or right of set off against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that the
Servicer shall be entitled to set off against and deduct from any such funds any
amounts that are properly due and payable to the Servicer under this Agreement.
Section 3.15. Servicing Compensation
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from its Collection Account out of each payment
of interest on a Mortgage Loan included in the Trust Estate an amount equal to
interest at the applicable Servicing Fee Rate on the Stated Principal Balance of
the related Mortgage Loan as of the immediately preceding Payment Date.
Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property) and similar fees
payable by the Mortgagor, Prepayment Interest Excess, all income
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and gain net of any losses realized from Permitted Investments in the Collection
Account, and any other benefits arising from the Collection Account and the
Escrow Account shall be retained by the Servicer to the extent not required to
be deposited in the related Collection Account and the Escrow Account pursuant
to Sections 3.05, 3.06 or 3.12(a) hereof. 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 therefor except as
specifically provided in this Agreement. In no event shall the Indenture
Trustee, Master Servicer or the Securities Administrator be liable for any
Servicing Fee or for any differential between the Servicing Fee and the amount
necessary to induce a successor servicer to act as successor servicer under this
Agreement.
Section 3.16. Access to Certain Documentation
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, as
applicable, access to the documentation regarding the Mortgage Loans required by
applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices of the Servicer designated by it provided,
that the Servicer shall be entitled to be reimbursed by each such Securityholder
for actual expenses incurred by the Servicer in providing such reports and
access. Nothing in this Section shall limit the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section.
Section 3.17. Annual Statement as to Compliance
Not later than (a) March 12 of each calendar year (other than the calendar
year during which the Closing Date occurs) or (b) with respect to any calendar
year during which an annual report on Form 10-K is not required to be filed
pursuant to Section 3.20 on behalf of the Issuing Entity, by April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer shall deliver to the Depositor, Master Servicer and
the Securities Administrator, an Officer's Certificate in the form attached
hereto as Exhibit D stating, as to each signatory thereof, that (i) a review of
the activities of the Servicer during the preceding calendar year and of the
performance of the Servicer 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 in all material respects throughout such year or a portion thereof,
or, if there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature and
status thereof. With respect to any Subservicer that meets the criteria of Item
1108(a)(2)(i) through (iii) of Regulation AB, the Servicer shall cause each such
Subservicer to deliver the Officer's Certificate set forth in this Section 3.17
as and when required with respect to such Subservicer.
Section 3.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements
(a) Not later than (i) March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on
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Form 10-K is not required to be filed pursuant to Section 3.20 on behalf of the
Issuing Entity, by April 15 of each calendar year (or if such day is not a
Business Day, the immediately succeeding Business Day), the Servicer, at its own
expense, shall deliver to the Securities Administrator, the Master Servicer and
the Depositor an officer's assessment of its compliance with the Servicing
Criteria applicable to it (as set forth on Exhibit F) during the preceding
calendar year as required by Rules 13a-18 and 15d-18 of the Exchange Act and
Item 1122 of Regulation AB (the "Assessment of Compliance"), which assessment
shall be substantially in the form of Exhibit E hereto.
(b) Not later than (i) March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer, at its own expense, shall cause a nationally or
regionally recognized firm of independent registered public accountants (who may
also render other services to any Servicer, the Sponsor or any Affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Securities Administrator, the Master
Servicer and the Depositor that attests to and reports on the Assessment of
Compliance provided by such Servicer pursuant to Section 3.18(a) (the
"Accountant's Attestation"). Such Accountant's Attestation shall be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act.
(c) The Servicer shall cause any Subservicer and each Subcontractor
(unless, in the case of any Subcontractor, the Depositor has notified the
Servicer, the Master Servicer and the Securities Administrator in writing that
such compliance statement is not required by Regulation AB) to deliver not later
than March 12 of each calendar year (other than the calendar year during which
the Closing Date occurs) with respect to any calendar year during which the
Issuing Entity's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, to the Securities Administrator, the Master Servicer and the
Depositor an Assessment of Compliance, which assessment shall be substantially
in the form of Exhibit E hereto. The Servicer shall cause any Subservicer (other
than the calendar year during which the Closing Date occurs) with respect to any
calendar year during which the Issuing Entity's annual report on Form 10-K is
not required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, by April 15 of each calendar year (or, in each
case, if such day is not a Business Day, the immediately succeeding Business
Day) to deliver to the Securities Administrator, the Master Servicer and the
Depositor an Assessment of Compliance, which assessment shall be substantially
in the form of Exhibit E hereto.
(d) Not later than March 12 of each calendar year (other than the calendar
year during which the Closing Date occurs) with respect to any calendar year
during which the Issuing Entity's annual report on Form 10-K is required to be
filed in accordance with the Exchange Act and the rules and regulations of the
Commission, the Servicer shall cause each Subservicer and each Subcontractor
(unless, in the case of any Subcontractor, the Depositor has notified the Master
Servicer, Securities Administrator and Servicer in writing that such compliance
statement is not required by Regulation AB) to deliver to the Master Servicer,
the Securities Administrator and the Depositor an Accountant's Attestation by a
registered public accounting firm that attests to, and reports on, the
Assessment of Compliance pursuant to Section 3.18(c) above. Other than the
calendar year during which the Closing Date occurs, with respect to any calendar
year during which the Issuing Entity's annual report on Form 10-K is not
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, not later than April 15 of each calendar year
(or, in each case, if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer shall cause each Subservicer to deliver to the
Securities Administrator,
27
Master Servicer and the Depositor an Accountant's Attestation by a registered
public accounting firm that attests to, and reports on, the Assessment of
Compliance pursuant to Section 3.18(c) above.
(e) Not later than (i) March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, by April 15 of
each calendar year (or if such day is not a Business Day, the immediately
succeeding Business Day), the Master Servicer, at its own expense, shall deliver
to the Securities Administrator and the Depositor an Assessment of Compliance
with the Servicing Criteria applicable to it (as set forth in Exhibit F) during
the preceding calendar year as required by Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB (the "Assessment of Compliance"),
which assessment shall be substantially in the form of Exhibit E hereto.
(f) Not later than (i) March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Master Servicer, at its own expense, shall cause a nationally
or regionally recognized firm of independent registered public accountants (who
may also render other services to any Servicer, the Sponsor or any Affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish an Accountant's Attestation to the Securities
Administrator and the Depositor that attests to and reports on the Assessment of
Compliance provided by the Master Servicer pursuant to Section 3.18(e). Such
Accountant's Attestation shall be in accordance with Rules 1-02(a)(3) and
2-02(g) of Regulation S-X under the Securities Act and the Exchange Act.
(g) The Master Servicer shall cause any Subservicer and each Subcontractor
engaged by it (unless, in the case of any Subcontractor, the Depositor has
notified the Master Servicer and the Securities Administrator in writing that
such compliance statement is not required by Regulation AB) not later than March
12 of each calendar year (other than the calendar year during which the Closing
Date occurs) with respect to any calendar year during which the Issuing Entity's
annual report on Form 10-K is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, to deliver to the
Securities Administrator and the Depositor an Assessment of Compliance, which
assessment shall be substantially in the form of Exhibit E hereto. The Master
Servicer shall cause any such engaged Subservicer (other than the calendar year
during which the Closing Date occurs) with respect to any calendar year during
which the Issuing Entity's annual report on Form 10-K is not required to be
filed in accordance with the Exchange Act and the rules and regulations of the
Commission, to deliver by April 15 of each calendar year (or, in each case, if
such day is not a Business Day, the immediately succeeding Business Day) to the
Securities Administrator, the Master Servicer and the Depositor an Assessment of
Compliance, which assessment shall be substantially in the form of Exhibit E
hereto.
(h) Not later than March 12 of each calendar year (other than the calendar
year during which the Closing Date occurs) with respect to any calendar year
during which the Issuing Entity's annual report on Form 10-K is required to be
filed in accordance with the Exchange Act and the rules and regulations of the
Commission, the Master Servicer shall cause each Subservicer and each
Subcontractor (unless, in the case of any Subcontractor, the Depositor has
notified the Securities Administrator and Master Servicer in writing that such
compliance statement is not required by Regulation AB) to deliver to the Master
Servicer, the Securities Administrator and the Depositor an Accountant's
Attestation by a registered public accounting firm that attests to, and reports
on, the Assessment of Compliance pursuant to Section
28
3.18(g) above. Other than the calendar year during which the Closing Date
occurs, with respect to any calendar year during which the Issuing Entity's
annual report on Form 10-K is not required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, by April 15 of
each calendar year (or, in each case, if such day is not a Business Day, the
immediately succeeding Business Day), the Master Servicer shall cause each such
engaged Subservicer to deliver to the Master Servicer, the Securities
Administrator and the Depositor an Accountant's Attestation by a registered
public accounting firm that attests to, and reports on, the Assessment of
Compliance pursuant to Section 3.18(g) above.
(i) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, 15
calendar days before the date on which the Issuing Entity's annual report on
Form 10-K with respect to the transactions contemplated by this Agreement is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission (or, in each case, if such day is not a Business
Day, the immediately preceding Business Day), the Securities Administrator shall
deliver to the Depositor and the Master Servicer an Assessment of Compliance
with regard to the Servicing Criteria applicable to the Securities Administrator
(as set forth in Exhibit F) during the preceding calendar year, which assessment
shall be substantially in the form of Exhibit E hereto.
(j) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, 15
calendar days before the date on which the Issuing Entity's annual report on
Form 10-K with respect to the transactions contemplated by this Agreement is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission (or, in each case, if such day is not a Business
Day, the immediately preceding Business Day), the Securities Administrator shall
deliver to the Depositor and the Master Servicer an Accountant's Attestation by
a registered public accounting firm that attests to, and reports on, the
Assessment of Compliance pursuant to Section 3.18(i) above
(k) Copies of such Assessments of Compliance and Accountant's Attestations
filed by the Securities Administrator shall be available on the Securities
Administrator's website (▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇) to any Securityholder, provided such
statement is delivered to the Securities Administrator. The initial Assessments
of Compliance and Accountant's Attestations required pursuant to this Section
3.18 shall be delivered to the Securities Administrator, the Master Servicer and
the Depositor, as applicable, by each party no later than March 12, 2007, or as
otherwise expressly provided herein.
(l) Each of the parties hereto acknowledges and agrees that the purpose of
this Section 3.18 is to facilitate compliance by the Sponsor and the Depositor
with the provisions of Regulation AB, as such may be amended or clarified from
time to time. Therefore, each of the parties agrees that the parties'
obligations hereunder will be supplemented and modified as necessary to be
consistent with any such amendments, interpretive advice or guidance, convention
or consensus among active participants in the asset-backed securities markets,
advice of counsel, or otherwise in respect of the requirements of Regulation AB
and the parties shall comply with requests made by the Sponsor or the Depositor
for delivery of additional or different information as the Sponsor or the
Depositor may determine in good faith is necessary to comply with the provisions
of Regulation AB, provided that such information is available to such party
without unreasonable effort or expense and within such timeframe as may be
reasonably requested. Any such supplementation or modification shall be made in
accordance with Section 8.01 without the consent of the Securityholders, and may
result in a change in the reports filed by the Securities Administrator on
behalf of the Issuing Entity under the Exchange Act.
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Section 3.19. [Reserved]
Section 3.20. Periodic Filings
As set forth on Schedule III hereto, for so long as the Issuing Entity is
subject to the Exchange Act reporting requirements, no later than the end of
business on the second Business Day after the occurrence of an event requiring
disclosure on Form 8K (a "reportable event"), (i) the Depositor, the Indenture
Trustee, the Sponsor, the Servicer (and in the case of Countrywide, the
Depositor shall cause such Servicer) or the Master Servicer shall have timely
notified the Securities Administrator of an item reportable on a Form 8-K
(unless such item is specific to the Securities Administrator, in which case the
Securities Administrator will be deemed to have notice), (ii) the Depositor, the
Servicer, the Master Servicer and the Indenture Trustee shall have delivered to
the Securities Administrator, all information, data, and exhibits required to be
provided or filed with such Form 8-K in a word format agreed upon by the
Indenture Trustee, the Securities Administrator and Depositor, Sponsor or Master
Servicer, as applicable, and (iii) the Depositor, Servicers or the Securities
Administrator, to the extent the reportable item pertains to such party, shall
notify the Master Servicer thereof by telephone. The Securities Administrator
shall not be responsible for determining what information is required to be
filed on a Form 8-K in connection with the transactions contemplated by this
Agreement (unless such information is specific to the Securities Administrator,
in which case the Securities Administrator will be responsible for consulting
with the Depositor or Master Servicer in making such a determination) or what
events shall cause a Form 8-K to be required to be filed (unless such event is
specific to the Securities Administrator, in which case the Securities
Administrator will be responsible for consulting with the Depositor or Master
Servicer before causing such Form 8-K to be filed) and shall not be liable for
any late filing of a Form 8-K in the event that it does not receive all
information, data and exhibits required to be provided or filed on or prior to
the second Business Day prior to the applicable filing deadline and with respect
to signatures, by noon, New York City time, on the fourth Business Day after the
reportable event. After preparing the Form 8-K on behalf of the Depositor, the
Securities Administrator shall, if required, forward electronically a draft copy
of the Form 8-K to the Depositor and Master Servicer for review. No later than
one and one-half Business Days after receiving a final copy of the Form 8-K from
the Securities Administrator, a duly authorized representative of the Master
Servicer shall sign the Form 8-K and return an electronic or fax copy of such
signed Form 8-K (with an original executed hard copy to follow by overnight
mail) to the Securities Administrator and the Securities Administrator shall
file such Form 8-K; provided that the Depositor has notified the Securities
Administrator and Master Servicer that it approves of the form and substance of
such Form 8-K. If a Form 8-K cannot be filed on time or if a previously filed
Form 8-K needs to be amended, the Securities Administrator will follow the
procedures set forth in this Agreement. After filing with the Commission, the
Securities Administrator will, pursuant to this Agreement, make available on its
internet website a final executed copy of each Form 8-K. The Securities
Administrator will have no obligation to prepare, execute or file such Form 8-K
or any liability with respect to any failure to properly prepare, execute or
file such Form 8-K resulting from the Securities Administrator's inability or
failure to obtain or receive any information needed to prepare, arrange for
execution or file such Form 8-K within the time frames required by this
paragraph, not resulting from its own negligence, bad faith or willful
misconduct.
Within fifteen (15) days after each Payment Date, the Securities
Administrator shall, on behalf of the Issuing Entity and in accordance with
industry standards, file with the Commission via the Electronic Data Gathering
and Retrieval System (▇▇▇▇▇), a Form 10-D with (1) a copy of the report to the
Securityholders for such Payment Date as an exhibit thereto. Any other
information provided to the Securities Administrator by a Servicer, the Master
Servicer or Depositor to be included in Form 10-D
30
shall be determined and prepared by and at the direction of the Depositor
pursuant to the following paragraph and the Securities Administrator will have
no duty or liability for any failure hereunder to determine or prepare any
additional information on Form 10-D ("Additional Form 10-D Disclosure") as set
forth in the next paragraph.
As set forth in Schedule IV hereto, within five (5) calendar days after the
related Payment Date (i) the parties hereto, as applicable, will be required
(and in the case of Countrywide, the Depositor will require Countrywide) to
provide to the Depositor and the Master Servicer, to the extent known to such
party, any Additional Form 10-D Disclosure (including any breaches of pool asset
representations and warranties or transaction covenants of which the party has
written notice and which has not been included on the monthly distribution
report for the period), if applicable, and (ii) the Depositor, to the extent it
deems necessary, shall forward to the Securities Administrator in
▇▇▇▇▇-compatible form (with a copy to the Master Servicer), or in such other
form as otherwise agreed upon by the Securities Administrator and the Depositor,
the form and substance of the Additional Form 10-D Disclosure by the eighth
calendar day after the Payment Date. The Depositor will be responsible for any
reasonable fees and expenses incurred by the Securities Administrator in
connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this paragraph.
After preparing the Form 10-D at the direction of the Depositor, the
Securities Administrator will forward electronically a draft copy of the Form
10-D to the Depositor (with a copy to the Master Servicer) for review by the
ninth calendar day after the Payment Date. No later than two (2) Business Days
after receipt of a final copy after the related Payment Date, unless the Master
Servicer receives a notice from the Securities Administrator as described below
or a notice from the Depositor that it has discovered a material deficiency or
irregularity with respect to such Form 10-D, a duly authorized representative of
the Master Servicer shall sign the Form 10-D and return an electronic or fax
copy of such Form 10-D (with an original executed hard copy to follow by
overnight mail) to the Securities Administrator and the Securities Administrator
shall file such Form 10-D within two (2) Business Days. Unless the Master
Servicer shall have received notice from the Securities Administrator to the
contrary, the Securities Administrator will be deemed to have represented to the
Master Servicer that the Monthly Statement has been properly prepared by the
Securities Administrator and the Master Servicer may rely upon the accuracy
thereof in it execution of the Form 10-D. If a Form 10-D cannot be filed on time
(because of notice from the Securities Administrator per the previous sentence
or otherwise) or if a previously filed Form 10-D needs to be amended, the
Securities Administrator will follow the procedures set forth in this Agreement.
After filing with the Commission, the Securities Administrator will make
available on its internet website a final executed copy of each Form 10-D. The
Securities Administrator and Master Servicer will have no liability with respect
to any failure to properly prepare, execute or file such Form 10-D resulting
from the Securities Administrator's inability or failure to obtain or receive
any information needed to prepare, arrange for execution or file such Form 10-D
on a timely basis.
Prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇ (▇▇▇, if applicable, prior to the 90th calendar day
after the end of the fiscal year for the Issuing Entity), the Securities
Administrator shall, on behalf of the Issuing Entity and in accordance with
industry standards, prepare and file with the Commission via ▇▇▇▇▇ a Form 10 -K
with respect to the Issuing Entity. Such Form 10-K shall include the following
items, in each case to the extent they have been delivered to the Securities
Administrator within the applicable time frames set forth in this Agreement, the
Countrywide Servicing Agreement and each Custodial Agreement, (i) an annual
compliance statement for each Servicer, Master Servicer, Securities
Administrator, and each Subservicer, and Subcontractor, if and as applicable,
pursuant to Section 3.17 of this Agreement or the Countrywide Servicing
Agreement, (ii)(A) the annual reports on Assessment of Compliance with Servicing
Criteria for the Master Servicer, Securities Administrator, each Servicer,
Subservicer, Subcontractor and each Custodian (unless the Depositor has
determined that such compliance statement is
31
not required by Regulation AB), as described in Section 3.18 of this Agreement
or the Countrywide Servicing Agreement or in the applicable Custodial Agreement,
and (B) if any Servicer's report on Assessment of Compliance with Servicing
Criteria described in Section 3.18 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if any
report on Assessment of Compliance with Servicing Criteria described in Section
3.18 of this Agreement or the Countrywide Servicing Agreement is not included as
an exhibit to such Form 10-K, disclosure that such report is not included and an
explanation why such report is not included, (iii)(A) the registered public
accounting firm attestation report for the Master Servicer, Securities
Administrator, each Servicer, each Subservicer, each Subcontractor and each
Custodian, as described in Section 3.18 of this Agreement or the Countrywide
Servicing Agreement or in the applicable Custodial Agreement, and (B) if any
registered public accounting firm attestation report described in the Section
3.18 of the Agreement identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any such registered
public accounting firm attestation report is not included as an exhibit to such
Form 10-K, disclosure that such report is not included and an explanation why
such report is not included, and (iv) a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certificate in the form
attached hereto as Exhibit G, executed by the senior officer in charge of
securitizations of the Master Servicer. Any disclosure or information in
addition to (i) through (iv) above that is required to be included on Form 10-K
("Additional Form 10-K Disclosure") shall be determined and prepared by and at
the direction of the Depositor pursuant to the following paragraph and neither
the Master Servicer nor the Securities Administrator will have a duty or
liability for any failure hereunder to determine or prepare any Additional Form
10-K Disclosure, except as set forth in the next paragraph.
As set forth in Schedule V hereto, no later than March 12 of each year that
the Issuing Entity is subject to the Exchange Act reporting requirements,
commencing in 2007, (i) certain parties to the transaction shall be required
(and with respect to Countrywide, the Depositor shall cause such Servicer) to
provide to the Depositor, the Securities Administrator and the Master Servicer,
to the extent known, any Additional Form 10-K Disclosure, if applicable, and
(ii) the Depositor shall, to the extent it deems necessary, forward to the
Securities Administrator in ▇▇▇▇▇-compatible form, or in such other form as
otherwise agreed upon by the Securities Administrator and the Depositor, the
form and substance of the Additional Form 10-K Disclosure by March 15. The
Depositor will be responsible for any reasonable fees and expenses incurred by
the Securities Administrator in connection with including any Additional Form
10-K Disclosure on Form 10-K pursuant to this paragraph.
After preparing the Form 10-K, the Securities Administrator shall forward
electronically a draft copy of the Form 10-K to the Depositor for review. Upon
the request of the Master Servicer, the Depositor shall confirm that it has
reviewed the Form 10-K, that it has been properly prepared and that the Master
Servicer may rely on the accuracy thereof (other than with respect to any
portion of the Form 10-K or any exhibit thereto provided by the Master Servicer
(other than any portion thereof with respect to which the Master Servicer has
relied on the Securities Administrator)). No later than 5:00pm EST on the third
Business Day following receipt of a final copy of the Form 10-K and if
requested, the above-described confirmation from the Depositor, a duly
authorized representative of the Master Servicer shall sign the Form 10-K and
return an electronic or fax copy of such signed Form 10-K (with an original
executed hard copy to follow by overnight mail) to the Securities Administrator
and the Securities Administrator shall file such Form 10-K by March 30th. If a
Form 10-K cannot be filed on time or if a previously filed Form 10-K needs to be
amended, the Securities Administrator will follow the procedures set forth in
the Agreement. After filing with the Commission, the Securities Administrator
will, pursuant to the Agreement, make available on its internet website a final
executed copy of each Form 10-K. the Securities Administrator shall have no
liability with respect to any failure to properly prepare, execute or
32
file such Form 10-K resulting from the Securities Administrator's inability or
failure to obtain or receive any information needed to prepare, arrange for
execution or file such Form 10-K on a timely basis.
Each Form 10-K shall include a certification (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certificate") which shall be in the form attached hereto as Exhibit G. The
Master Servicer will cause its senior officer in charge of securitization to
execute the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certificate required pursuant to Rule 13a -14 under
the Securities Exchange Act of 1934, as amended, and to deliver the original
executed ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certificate to the Securities Administrator by March 20
of each year in which the Issuing Entity is subject to the reporting
requirements of the Exchange Act. In connection therewith, each of the
Securities Administrator, each Servicer, Subservicer and Subcontractor shall
sign an Officer's Certificate (in the form attached hereto as Exhibit H and
Exhibit I, respectively) for the benefit of the Master Servicer and its
officers, directors and Affiliates regarding certain aspects of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certificate. To the extent any information or exhibits required
to be included in the Form 10-K are not timely received by the Securities
Administrator prior to March 30, the Securities Administrator shall, on behalf
of the Issuing Entity, file a Form 12B-25 and one or more amended Form 10-Ks, to
the extent such amendments are accepted by the Exchange Act, to include such
missing information or exhibits promptly after receipt thereof by the Securities
Administrator.
Promptly following the first date legally permissible under applicable
regulations and interpretations of the Commission, the Securities Administrator
shall, on behalf of the Issuing Entity and in accordance with industry
standards, file with the Commission via ▇▇▇▇▇ a Form 15 Suspension Notification
with respect to the Issuing Entity, if applicable.
The Depositor, Master Servicer and Servicer (and the Depositor shall cause
Countrywide) each agree to furnish promptly to the Securities Administrator,
from time to time upon request, such further information, reports, and financial
statements within its control related to this Agreement and the Mortgage Loans
as is reasonably necessary to prepare and file all necessary reports with the
Commission. The Securities Administrator shall have no responsibility to file
any items with the Commission other than those specified in this section and the
Master Servicer shall execute any and all Form 8-Ks and 10-Ks required
hereunder.
If the Commission issues additional interpretative guidance or promulgates
additional rules or regulations with respect to Regulation AB or otherwise, or
if other changes in applicable law occur, that would require the reporting
arrangements, or the allocation of responsibilities with respect thereto,
described in this Section 3.20, to be conducted differently than as described,
the Depositor, the Master Servicer, the Servicer, and the Securities
Administrator will reasonably cooperate to amend the provisions of this Section
3.20 in order to comply with such amended reporting requirements and such
amendment of this Section 3.20. Any such amendment shall be made in accordance
with Section 10.01 without the consent of the Securityholders and may result in
a change in the reports filed by the Securities Administrator on behalf of the
Issuing Entity under the Exchange Act. Notwithstanding the foregoing, the
Depositor, the Master Servicer, the Servicer and the Securities Administrator
shall not be obligated to enter into any amendment pursuant to this Section 3.20
that adversely affects its obligations and immunities under this Agreement.
The Depositor, Servicer, the Master Servicer and the Securities
Administrator agree to use their good faith efforts to cooperate in complying
with the requirements of this Section 3.20.
Section 3.21. Indemnification by Securities Administrator
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The Securities Administrator shall indemnify and hold harmless the
Depositor, the Master Servicer, the Issuing Entity and their respective
officers, directors, agents and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Securities Administrator or any of its officers, directors, agents or
Affiliates of its obligations under Sections 3.18 and 3.20, any material
misstatement or omission in any documents prepared thereunder (to the extent the
Securities Administrator is responsible for providing information or calculating
amounts included in such information), the failure of the Securities
Administrator to deliver when required any Assessment of Compliance or
Accountant's Attestation required of it pursuant to Section 3.18, or any
material misstatement or omission contained in any Assessment of Compliance or
Accountant's Attestation provided on its behalf pursuant to Section 3.18, or the
negligence, bad faith or willful misconduct of the Securities Administrator in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the indemnified parties, then the Securities
Administrator agrees that it shall contribute to the amount paid or payable by
the indemnified parties as a result of the losses, claims, damages or
liabilities of the indemnified parties in such proportion as is appropriate to
reflect the relative fault of the Securities Administrator on the one hand and
of the indemnified parties on the other.
Section 3.22. Indemnification by Servicer
For certain Sections herein, the Servicer shall indemnify and hold harmless
the Indenture Trustee, the Depositor, the Master Servicer, the Securities
Administrator, the Issuing Entity and their respective officers, directors,
agents and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments and other costs
and expenses arising out of or based upon a breach by the Servicer or any of its
officers, directors, agents or Affiliates of its obligations under Sections
3.17, 3.18 and 3.20, any material misstatement or omission in any documents
prepared thereunder (to the extent the Servicer is responsible for providing
information or calculating amounts included in such information), the failure of
such Servicer or any related Sub-Servicer or Subcontractor to deliver or cause
to be delivered when required any Assessment of Compliance or Accountant's
Attestation required of it pursuant to Section 3.18 or Annual Statement as to
Compliance required pursuant to Section 3.17, as applicable, or any material
misstatement or omission contained in any Assessment of Compliance, Accountant's
Attestation or Annual Statement as to Compliance provided on its behalf pursuant
to Section 3.18 or 3.17, as applicable, 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
indemnified parties, then the Servicer agrees that it shall contribute to the
amount paid or payable by the indemnified parties as a result of the losses,
claims, damages or liabilities of the indemnified parties in such proportion as
is appropriate to reflect the relative fault of the Servicer on the one hand and
the indemnified parties on the other.
Section 3.23. Prepayment Charge Reporting Requirements
Promptly after each Payment Date, the Servicer shall provide to the
Depositor and the Master Servicer the following information with regard to each
Mortgage Loan that has prepaid during the related Prepayment Period:
(i) loan number;
(ii) current Mortgage Rate;
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(iii) current principal balance;
(iv) original principal balance;
(v) Prepayment Charge amount due; and
(vi) Prepayment Charge amount collected.
Section 3.24. Information to the Master Servicer
Two Business Days after the 14th day of each month, but not later than the
18th day of each month, the Servicer shall furnish to the Master Servicer in
electronic format (1) a report (the "Remittance Report") containing such data
and information as to permit the Securities Administrator to prepare the
statement to Securityholders (the "Monthly Statement") and make the required
payments for the related Payment Date and such other information as shall be
mutually agreed between the Servicer and the Master Servicer and (ii) a
delinquency report in such form or forms as the Master Servicer and the Servicer
may from time to time agree for the period ending on the last Business Day of
the preceding month (and with respect to prepayments in full, for the period
ending on the 14th day of the month in which such report is to be furnished).
The Securities Administrator will prepare the Monthly Statement based solely
upon the information received from the Master Servicer.
Section 3.25. Indemnification
The Servicer shall indemnify the Sponsor, the Issuing Entity, the Indenture
Trustee (in its individual capacity and in its capacity as trustee), the
Depositor, the Master Servicer, the Securities Administrator and their officers,
directors, employees and agents and hold each of them harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that any of such parties may sustain in any way related to the failure
of the Servicer to perform its duties and service the related Mortgage Loans in
compliance with the terms of this Agreement by reason of negligence, willful
misfeasance or bad faith in the performance of its duties or by reason of
reckless disregard of obligations and duties hereunder. The Servicer immediately
shall notify the Sponsor, the Indenture Trustee, the Depositor, the Master
Servicer, the Securities Administrator or any other relevant party if a claim is
made by a third party with respect to such party and this Agreement or the
related Mortgage Loans and, if subject to this indemnification obligation,
assume (with the prior written consent of the indemnified party, which consent
shall not be unreasonably withheld or delayed) 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 any of such parties in respect of such claim. The Servicer shall provide
the Depositor, the Master Servicer, the Securities Administrator and the
Indenture Trustee with a written report of all expenses and advances incurred by
the Servicer pursuant to this Section 3.25, and the Servicer shall promptly
reimburse itself from the assets of the Trust Estate in the Collection Account
for all amounts advanced by it pursuant to the preceding sentence except when
the claim in any way relates to the gross negligence, bad faith or willful
misconduct of the Servicer. The provisions of this paragraph shall survive the
termination of this Agreement and the payment of the outstanding Certificates.
Section 3.26. Nonsolicitation
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The Servicer hereby covenants that neither it nor any Affiliate of the
Servicer will directly solicit any Mortgagor hereunder to refinance the related
Mortgage Loan. For the purposes of the foregoing, neither the Servicer nor any
Affiliate of the Servicer shall be deemed to directly solicit any Mortgagor (i)
if the Servicer received a request for verification of mortgage, a request for
demand for payoff, a mortgagor initiated written or verbal communication
indicating a desire to prepay or refinance the related Mortgage Loan or the
Mortgagor initiates a title search, or if the Servicer responds to a request
from a Mortgagor regarding a refinancing or if the Mortgagor receives marketing
materials which are generally disseminated or (ii) in connection with a
refinancing of a delinquent Mortgage Loan or if the Mortgage Loan is Delinquent
and the Servicer refers a Mortgagor to a Person for refinancing or provides a
Mortgagor's contact information to such Person. It is understood that the
promotions undertaken by the Servicer or its Affiliates or agents which are
directed to the general public at large, or certain segments thereof, shall not
constitute solicitation as that term is used in this Section 3.26.
Section 3.27. High Cost Mortgage Loans
In the event that the Servicer reasonably determines that a Mortgage Loan
may be a "high cost mortgage loan", "high cost home", "covered", "high cost",
"high risk home", "predatory" or similarly classified loan under any applicable
state, federal or local law, the Servicer may notify the Master Servicer, the
Securities Administrator, the Depositor, the Sponsor and the Indenture Trustee
thereof; the Servicer may terminate its servicing thereof; and such
determination shall be deemed to materially and adversely affect the interests
of the Securityholders in such Mortgage Loan and the Originator, or the Sponsor,
in event the Originator does not do so, will repurchase the Mortgage Loan within
a 30-day period from the date of the notice in the manner described in Section
2.03(e).
Section 3.28. Special Servicing Agreements
The Servicer may enter into a special servicing advisory agreement with (i)
a holder of (a) the Class R Certificate, (b) the Class C Certificate, and (c)
one or more other Class of subordinated securities issued by the Issuing Entity
and/or (ii) an advisor designated by any of the foregoing. Pursuant to such
agreement, the Servicer may provide such holder or advisor, in its capacity as
special servicing advisor, with loan-level information with respect to the
Mortgage Loans, and such person may advise the Servicer with respect to efforts
to maximize recoveries with regard to the Mortgage Loans, including, without
limitation, the commencement of foreclosure proceedings or other actions. The
Master Servicer shall have no obligation to monitor or otherwise have any
responsibilities with respect to such advisory agreements.
ARTICLE IIIA
THE MASTER SERVICER
Section 3A.01. Master Servicer.
The Master Servicer shall supervise, monitor and oversee the obligation of
the Servicers to service and administer their respective Mortgage Loans in
accordance with the terms of the applicable Servicing Agreement and shall have
full power and authority to do any and all things which it may deem necessary or
desirable in connection with such master servicing and administration. In
performing its obligations hereunder, the Master Servicer shall act in a manner
consistent with Accepted Master Servicing Practices. Furthermore, the Master
Servicer shall oversee and consult with each Servicer as necessary from
time-to-time to carry out the Master Servicer's obligations hereunder, shall
receive,
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review and evaluate certain reports, information and other data provided to the
Master Servicer by each Servicer and shall enforce each Servicer's obligation to
perform and observe the covenants, obligations and conditions to be performed or
observed by such Servicer under the applicable Servicing Agreement. The Master
Servicer shall independently and separately monitor each Servicer's servicing
activities with respect to each related Mortgage Loan, reconcile the results of
such monitoring with such information provided in the previous sentence on a
monthly basis and coordinate corrective adjustments to the Servicers' and Master
Servicer's records, and based on such reconciled and corrected information, the
Master Servicer shall provide such information to the Securities Administrator
as shall be necessary in order for it to prepare the statements specified in
Section 6.06 of the Indenture, and prepare any other information and statements
required to be forwarded by the Master Servicer hereunder. The Master Servicer
shall reconcile the results of its monitoring with the actual remittances of the
Servicers to the Master Servicer Collection Account pursuant to the applicable
Servicing Agreements. Except during any time where the Master Servicer is acting
as servicer hereunder, neither the Master Servicer nor the Securities
Administrator shall have any responsibility for reviewing or reconciling the
Collection Account or for any expenses or other consequences resulting from any
failure of such Collection Account to be so reconciled. The Master Servicer
shall be entitled to conclusively rely on the Mortgage Loan data provided by the
Servicers and the Depositor and shall have no liability for any errors in such
Mortgage Loan data.
If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as master servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
Section 3A.02. Monitoring of Servicers.
(a) The Master Servicer shall be responsible for reporting to the Indenture
Trustee, the Securities Administrator and the Depositor any material
non-compliance by each Servicer with its duties under the related Servicing
Agreement. In the review of each Servicer's activities, the Master Servicer may
rely upon an officer's certificate of the Servicer with regard to such
Servicer's compliance with the terms of its Servicing Agreement. In the event
that the Master Servicer, in its judgment, determines that a Servicer should be
terminated in accordance with its Servicing Agreement, or that a notice should
be sent pursuant to such Servicing Agreement with respect to the occurrence of
an event that, unless cured, would constitute grounds for such termination, the
Master Servicer shall notify the Depositor, the Securities Administrator and the
Indenture Trustee thereof and the Master Servicer shall issue such notice or
take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Indenture Trustee and the
Securityholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or, if the
Master Servicer is unwilling or unable to act as a Servicer, the Master Servicer
shall cause the Indenture Trustee to enter in to a new Servicing Agreement with
a successor servicer selected by the Master Servicer (with the consent of the
Depositor) that is eligible in accordance with the criteria specified in this
Agreement; provided, however, it is understood and acknowledged by the parties
hereto that there will be a period of transition (not to exceed 90 days) before
the actual servicing functions can be fully transferred to such successor
servicer. In either event, such enforcement, including, without limitation, the
legal prosecution of claims, termination of the Servicing Agreements and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Master Servicer, in its good faith
business judgment, would
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require were it the owner of the related Mortgage Loans. The Master Servicer
shall pay the costs of such enforcement at its own expense subject to its right
of reimbursement and Section 3A.02(c), provided that the Master Servicer shall
not be required to prosecute or defend any legal action except to the extent
that the Master Servicer shall have received reasonable indemnity for its costs
and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of a Servicer as a result of an event of default by
such Servicer and (ii) all costs and expenses associated with the complete
transfer of servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor servicer to correct any errors or insufficiencies in
the servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account pursuant to Section 3.08.
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.
(e) If the Master Servicer acts as successor to a Servicer, it will not
assume liability for the acts or omissions or the representations and warranties
of such Servicer, if any, that it replaces.
Section 3A.03. Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and shall have
full power and authority, subject to the REMIC Provisions and the provisions of
Article X in the Indenture, to do any and all things that it may deem necessary
or desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Securityholders and the Indenture Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable; provided, however, that the Master Servicer
shall not (and, consistent with its responsibilities under Section 3A.02, shall
not knowingly take any action to permit any Servicer to) knowingly or
intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any REMIC created pursuant to the
Indenture to fail to qualify as a REMIC or result in the imposition of a tax
upon the Issuing Entity (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (but not at the expense of
the Master Servicer) to the effect that the contemplated action will not cause
any REMIC created pursuant to the Indenture to fail to qualify as a REMIC or
result in the imposition of a tax upon any REMIC created pursuant to the
Indenture. The Indenture Trustee shall furnish the Master Servicer, upon written
request
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from a Servicing Officer, with any limited powers of attorney (in form
acceptable to the Indenture Trustee) empowering the Master Servicer or any
Servicer to execute and deliver instruments of satisfaction or cancellation, or
of partial or full release or discharge, and to foreclose upon or otherwise
liquidate Mortgaged Property, and to appeal, prosecute or defend in any court
action relating to the Mortgage Loans or the Mortgaged Property, in accordance
with the applicable Servicing Agreement and this Agreement, and the Indenture
Trustee shall execute and deliver such other documents, as the Master Servicer
may request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Indenture Trustee shall have
no liability for misuse of any such powers of attorney by the Master Servicer or
any Servicer). If the Master Servicer or the Indenture Trustee has been advised
that it is likely that the laws of the state in which action is to be taken
prohibit such action if taken in the name of the Indenture Trustee or that the
Indenture Trustee would be adversely affected under the "doing business" or tax
laws of such state if such action is taken in its name, the Master Servicer
shall join with the Indenture Trustee in the appointment of a co-trustee
pursuant to Section 6.10 of the Indenture. In the performance of its duties
hereunder, the Master Servicer shall be an independent contractor and shall not,
except in those instances where it is taking action in the name of the Indenture
Trustee, be deemed to be the agent of the Indenture Trustee.
Section 3A.04. Liabilities of the Master Servicer.
The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the Master
Servicer, as the case may be, herein.
Section 3A.05 Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its existence,
rights and franchises as a corporation under the laws of the state of its
incorporation, and will obtain and preserve its qualification to do business as
a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Notes or any of the Mortgage Loans and to perform its duties under this
Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 3A.06 Indemnification from the Master Servicer.
For certain Sections herein, the Master Servicer shall indemnify and hold
harmless the Indenture Trustee, the Depositor, the Securities Administrator, the
Issuing Entity and their respective officers, directors, agents and Affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments and other costs and expenses arising out
of or based upon a breach by the Master Servicer or any of its officers,
directors, agents or Affiliates of its obligations under Sections 3.18 and 3.20,
any material misstatement or omission in any documents prepared thereunder (to
the extent the Master Servicer is responsible for providing information or
calculating amounts included in such information), the failure of the Master
Servicer or any related Sub-Servicer or Subcontractor to deliver or cause to be
delivered when required any Assessment of Compliance or
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Accountant's Attestation required of it pursuant to Section 3.18, or any
material misstatement or omission contained in any Assessment of Compliance,
Accountant's Attestation or Annual Statement as to Compliance provided on its
behalf pursuant to Section 3.18, as applicable, or the negligence, bad faith or
willful misconduct of the Master Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the indemnified parties, then the Master Servicer agrees that it shall
contribute to the amount paid or payable by the indemnified parties as a result
of the losses, claims, damages or liabilities of the indemnified parties in such
proportion as is appropriate to reflect the relative fault of the Master
Servicer on the one hand and the indemnified parties on the other.
Section 3A.07 Limitations on Liability of the Master Servicer and Others.
Subject to the obligation of the Master Servicer to indemnify the Indemnified
Persons pursuant to Section 3A.06:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indenture Trustee, the Depositor, each Servicer, the Securities Administrator,
the Issuing Entity and their respective officers, directors, agents and
Affiliates or the Securityholders for taking any action or for refraining from
taking any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Master
Servicer or any such Person against any breach of warranties or representations
made herein or any liability which would otherwise be imposed by reason of such
Person's willful misfeasance, bad faith or negligence in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.
(c) The Master Servicer and any director, officer, employee or agent of the
Master Servicer shall be indemnified by the Issuing Entity and held harmless
thereby against any loss, liability or expense (including reasonable legal fees
and disbursements of counsel) incurred on their part that may be sustained in
connection with, arising out of, or related to, any claim or legal action
(including any pending or threatened claim or legal action) relating to this
Agreement, any Operative Document or the Securities, other than (i) any such
loss, liability or expense related to the Master Servicer's failure to perform
its duties in compliance with this Agreement (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement), or (ii)
any such loss, liability or expense incurred by reason of the Master Servicer's
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion,
undertake any such action which it may deem necessary or desirable with respect
to this Agreement or the Countrywide Servicing Agreement and the rights and
duties of the parties hereto and the interests of the Securityholders hereunder
and thereunder. In such event, the legal expenses and costs of such action and
any liability resulting therefrom shall be expenses, costs and liabilities of
the Issuing Entity, and the Master Servicer shall be entitled to be reimbursed
therefor out of the Master Servicer Collection Account as provided by Section
3.08. Nothing in this Subsection 3A.07(d) shall affect the Master Servicer's
obligation to supervise, or to take such actions as are necessary to ensure, the
servicing and administration of the Mortgage Loans pursuant to Section 3A.01.
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(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Issuing Entity might incur as a
result of such course of action by reason of the condition of the Mortgaged
Properties but shall give notice to the Indenture Trustee if it has notice of
such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of
any Servicer.
Section 3A.08. Master Servicer Not to Resign.
Except as provided in Section 3A.09, the Master Servicer shall not resign
from the obligations and duties hereby imposed on it except upon a determination
that any such duties hereunder are no longer permissible under applicable law
and such impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Indenture Trustee. No such resignation by the
Master Servicer shall become effective until the Sponsor or the Indenture
Trustee or a successor to the Master Servicer reasonably satisfactory to the
Indenture Trustee shall have assumed the responsibilities, duties, liabilities
and obligations of the Master Servicer in accordance with Article VII hereof.
The Indenture Trustee shall notify the Rating Agencies of the resignation of the
Master Servicer.
If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as master servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
Section 3A.09. Sale and Assignment of Master Servicing.
The Master Servicer may sell and assign its rights and delegate its duties
and obligations in its entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; (b) shall have a net worth
of not less than $10,000,000 (unless otherwise approved by each Rating Agency
pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the
Indenture Trustee (as evidenced in a writing signed by the Indenture Trustee);
and (d) shall execute and deliver to the Indenture Trustee an agreement, in form
and substance reasonably satisfactory to the Indenture Trustee, which contains
an assumption by such Person of the due and punctual performance and observance
of each covenant and condition to be performed or observed by it as master
servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Notes in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master Servicer and the Indenture Trustee; and
(iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Indenture Trustee an Officer's Certificate and an Opinion of
Independent Counsel, each stating that all conditions precedent to such action
under this Agreement have been completed and such action is permitted by and
complies with the terms of this Agreement. No such assignment or delegation
shall affect any liability of the Master Servicer arising prior to the effective
date thereof.
Section 3A.10. Compensation for the Master Servicer.
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The Master Servicer will be entitled to all income and gain realized from
any investment of funds in the Master Servicer Collection Account, pursuant to
Sections 3.05 and 3.08 herein, for the performance of its activities hereunder.
The Master Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.
ARTICLE IV
SERVICING NOTES
Section 4.01. Advances.
(a) Subject to the conditions of this Article IV, the Servicer, as required
below, shall make an Advance and deposit such Advance in its Collection Account.
The Servicer shall use commercially reasonable efforts to remit each such
Advance no later than 2:30 p.m. EST, but in any case no later than 4:00 p.m.
EST, on the Servicer Advance Date in immediately available funds. The Servicer
shall be obligated to make any such Advance only to the extent that such advance
would not be a Non-Recoverable Advance. If the Servicer shall have determined
that it has made a Non-Recoverable Advance or that a proposed Advance or a
lesser portion of such Advance would constitute a Non-Recoverable Advance, the
Servicer shall deliver (i) to the Master Servicer for the benefit of the
Securityholders, funds constituting the remaining portion of such Advance, if
applicable, and (ii) to the Depositor, each Rating Agency, the Master Sevicer
and the Securities Administrator an Officer's Certificate setting forth the
basis for such determination. The Servicer may, in its sole discretion, make an
Advance with respect to the principal portion of the final Scheduled Payment on
a Balloon Loan, but the Servicer is under no obligation to do so; provided,
however, that nothing in this sentence shall affect the Servicer's obligation
under this Section 4.01 to Advance the interest portion of the final Scheduled
Payment with respect to a Balloon Loan as if such Balloon Loan were a fully
amortizing Mortgage Loan. If a Mortgagor does not pay its final Scheduled
Payment on a Balloon Loan when due, the Servicer shall Advance (unless it
determines in its good faith judgment that such amounts would constitute a
Non-Recoverable Advance) a full month of interest (net of the Servicing Fee) on
the Stated Principal Balance thereof each month until its Stated Principal
Balance is reduced to zero.
In lieu of making all or a portion of such Advance from its own funds, the
Servicer may (i) cause to be made an appropriate entry in its records relating
to its Collection Account that any amount held for future distribution has been
used by the Servicer in discharge of its obligation to make any such Advance and
(ii) transfer such funds from the Collection Account to the Master Servicer
Collection Account. In addition, the Servicer shall have the right to reimburse
itself for any such Advance from amounts held from time to time in the
Collection Account to the extent such amounts are not then required to be
distributed. Any funds so applied and transferred pursuant to the previous two
sentences shall be replaced by the Servicer by deposit in the Collection Account
no later than the close of business on the Servicer Advance Date on which such
funds are required to be distributed pursuant to this Agreement. The Servicer
shall be entitled to be reimbursed from the Collection Account for all Advances
of its own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Mortgage Loan shall continue
until the earlier of (i) such Mortgage Loan is paid in full, (ii) the related
Mortgaged Property or related REO Property has been liquidated or until the
purchase or repurchase thereof (or substitution therefor) from the Issuing
Entity pursuant to any applicable provision of this Agreement, except as
otherwise provided in this Section 4.01, (iii) the Servicer determines in its
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good faith judgment that such amounts would constitute a Non-Recoverable Advance
as provided in the preceding paragraph or (iv) the date on which such Mortgage
Loan becomes 150 days delinquent as set forth below.
(b) Notwithstanding anything in this Agreement to the contrary (including,
but not limited to, Sections 3.01 and 4.01(a) hereof), no Advance or Servicing
Advance shall be required to be made hereunder by the Servicer (including for
the avoidance of doubt, the Master Servicer as successor servicer) if such
Advance or Servicing Advance would, if made, constitute a Non-Recoverable
Advance or a Non-Recoverable Servicing Advance. The determination by the
Servicer that it has made a Non-Recoverable Advance or a Non-Recoverable
Servicing Advance or that any proposed Advance or Servicing Advance, if made,
would constitute a Non-Recoverable Advance or a Non-Recoverable Servicing
Advance, respectively, shall be evidenced by an Officer's Certificate of the
Servicer delivered to the Depositor, the Master Servicer and the Securities
Administrator. In addition, the Servicer shall not be required to advance any
Relief Act Reductions or make any advance with respect to the HELOCs.
Notwithstanding the foregoing, the Servicer shall not be required to make
any Advances for any Mortgage Loan after such Mortgage Loan becomes 150 days
delinquent. The Servicer shall identify such delinquent Mortgage Loans in the
Remittance Report referenced in Section 3.24. In addition, the Servicer shall
provide, at the time of delivery of such Remittance Report, the Master Servicer
and the Securities Administrator with an Officer's Certificate listing such
delinquent Mortgage Loans and certifying that such loans are 150 days or more
delinquent.
Section 4.02. Reduction of Servicing Compensation in Connection with Prepayment
Interest Shortfalls
In the event that any Mortgage Loan (other than a HELOC) is the subject of
a Prepayment Interest Shortfall, the Servicer shall, from amounts in respect of
the Servicing Fee for such Payment Date, deposit into the Collection Account, as
a reduction of the Servicing Fee for such Payment Date, no later than the
Servicer Advance Date immediately preceding such Payment Date, an amount up to
the Prepayment Interest Shortfall. In case of such deposit, the Servicer shall
not be entitled to any recovery or reimbursement from the Depositor, the
Indenture Trustee, the Master Servicer, the Securities Administrator, the
Issuing Entity or the Securityholders. With respect to any Payment Date, to the
extent that the Prepayment Interest Shortfall exceeds Compensating Interest
(such excess, a "Non-Supported Interest Shortfall"), such Non-Supported Interest
Shortfall shall reduce the Current Interest with respect to each Class of
Securities, pro rata based upon the amount of interest each such Class would
otherwise be entitled to receive on such Payment Date.
ARTICLE V
PAYMENT ACCOUNT
Section 5.01. Payment Account.
The Securities Administrator shall establish and maintain a Payment Account
titled "Citibank, N.A., as Indenture Trustee, for the benefit of the
Securityholders and the Certificate Paying Agent pursuant to the Indenture,
dated as of the Closing Date, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2006-SL2, LaSalle Bank National Association and Citibank, N.A." The
Payment Account shall be an Eligible Account. On each Payment Date, amounts on
deposit in the Payment Account will be distributed by the Securities
Administrator in accordance with the relevant Section in the Indenture.
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ARTICLE VI
THE SERVICER, THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01. Respective Liabilities of the Master Servicer, the Servicer and
the Depositor.
The Master Servicer, the Servicer and the Depositor shall each 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 Master Servicer, the Servicer or
the Depositor
Except as provided in the next paragraph, the Master Servicer, the Servicer
and the Depositor will each keep in full effect its existence, rights and
franchises as a corporation or banking association 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 Master Servicer, the Servicer or the Depositor
may be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Master Servicer, the Servicer or the Depositor shall
be a party, or any Person succeeding to the business of the Master Servicer, the
Servicer or the Depositor, shall be the successor of the Master Servicer, the
Servicer or 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 (except for the
execution of an assumption agreement where such succession is not effected by
operation of law); provided, however, that the successor or surviving Person to
the Servicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Section 6.03. Limitation on Liability of the Master Servicer, the Servicer, the
Depositor and Others
None of the Master Servicer, the Servicer, the Depositor or any of the
directors, officers, employees or agents of the Master Servicer, the Servicer or
the Depositor shall be under any liability to the Issuing Entity or the
Securityholders 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,
the Servicer, the Depositor or any such Person against any breach of
representations or warranties made by it herein or protect the Master Servicer,
the Servicer, the Depositor or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Master Servicer, the Servicer or the Depositor and any
director, officer, employee or agent of the Master Servicer, the Servicer or 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 Master Servicer, the Servicer or the Depositor and any director,
officer, employee or agent of the Master Servicer, the Servicer or the Depositor
shall be indemnified by the Issuing Entity and held harmless against any loss,
liability or expense, incurred in connection with the performance of their
duties under this Agreement or incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this
44
Agreement or the Securities, other than any loss, liability or expense (i)
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder or (ii) which does not constitute an
"unanticipated expense" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii). None of the Master Servicer, the Servicer or the Depositor
shall be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its respective duties hereunder and that in its
opinion may involve it in any expense or liability; provided, however, that any
either of the Master Servicer, the Servicer or the Depositor in its discretion
may 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 Indenture Trustee and the Securityholders 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 Issuing Entity, and
the Master Servicer, the Servicer and the Depositor shall be entitled to be
reimbursed therefor out of the Collection Account as provided by Section 3.08
hereof.
Notwithstanding anything herein to the contrary, in preparing or furnishing
any information, reports or certifications pursuant to this Agreement, the
Master Servicer shall be entitled to rely conclusively on the accuracy of the
information or data provided to it by any other party to the Agreement or the
Servicer under the Countrywide Servicing Agreement and shall have no liability
for any errors therein.
Section 6.04 Limitation on Resignation of Servicer.
Subject to the provisions of Section 7.01, the second paragraph of Section
7.02, the second paragraph of Section 6.02 and the following paragraph of this
Section 6.04, the Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law and such impermissibility cannot be
cured. Any such determination permitting the resignation of the Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Master
Servicer. No such resignation by the Servicer shall become effective until the
Master Servicer or a successor servicer reasonably acceptable to the Master
Servicer is appointed and has assumed the Servicer's responsibilities, duties,
liabilities and obligations hereunder. Any such resignation shall not relieve
the Servicer of any of the obligations specified in Section 7.01 and 7.02 as
obligations that survive the resignation or termination of the Servicer.
Notwithstanding anything to the contrary in the previous paragraph of this
Section 6.04, the Securities Administrator and the Indenture Trustee hereby
specifically (i) consent to the pledge and assignment by the Servicer of all the
Servicer's right, title and interest in, to and under this Agreement to the
Servicing Rights Pledgee, if any, for the benefit of certain lenders, and (ii)
agree that upon delivery to the Indenture Trustee by the Servicing Rights
Pledgee of a letter signed by the Servicer whereby the Servicer shall resign as
Servicer under this Agreement, notwithstanding anything to the contrary which
may be set forth in Section 3.04 above, the Master Servicer shall appoint the
Servicing Rights Pledgee or its designee as successor servicer, provided that
the Servicer's resignation will not be effective unless, at the time of such
appointment, the Servicing Rights Pledgee or its designee (i) meets the
requirements of a successor servicer under Section 7.03 of this Agreement
(including being acceptable to the Rating Agencies), provided, that the consent
and approval of the Securities Administrator, the Indenture Trustee shall be
deemed to have been given to the Servicing Rights Pledgee or its designee, and
the Servicing Rights Pledgee and its designee are hereby agreed to be acceptable
to the Securities Administrator, the Indenture Trustee and (ii) agrees to be
subject to the terms of this Agreement. If, pursuant to any provision hereof,
the duties of the Servicer are transferred to a successor servicer, the entire
amount of the
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Servicing Fee and other compensation payable to the Servicer pursuant hereto
shall thereafter be payable to such successor servicer.
Section 6.05. Errors and Omissions Insurance; Fidelity Bonds
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac for such Servicers
performing servicing for mortgage loans purchased by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
The Servicer shall provide the Master Servicer and the Indenture Trustee, upon
request and reasonable notice, with copies of such policies and fidelity bond or
a certification from the insurance provider evidencing such policies and
fidelity bond. The Servicer may be deemed to have complied with this provision
if an Affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Servicer. In the event that any such
policy or bond ceases to be in effect, the Servicer shall use its reasonable
best efforts to obtain a comparable replacement policy or bond from an insurer
or issuer meeting the requirements set forth above as of the date of such
replacement. Any such policy or fidelity bond shall by its terms not be
cancelable without thirty days' prior written notice to the Master Servicer and
the Indenture Trustee.
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
(a) "Servicing Default," wherever used herein, means any one of the
following events:
(i) any failure by the Servicer to make any Advance, to deposit in the
Collection Account or remit to the Master Servicer any payment (excluding a
payment required to be made under Section 4.01 hereof) required to be made
under the terms of this Agreement, which failure shall continue unremedied
for three (3) Business Days and, with respect to a payment required to be
made under Section 4.01 hereof, for one (1) Business Day, after the date on
which written notice of such failure shall have been given to the Servicer,
the Master Servicer the Indenture Trustee and the Depositor by the
Indenture Trustee, the Master Servicer or the Depositor, or to the
Servicer, the Indenture Trustee, the Depositor and the Master Servicer by
the Holders of Securities evidencing greater than 50% of the Voting Rights
evidenced by the Securities; or
(ii) any failure by the Servicer to observe or perform in any material
respect any other of the covenants or agreements on the part of the
Servicer contained in this Agreement (other than clause (vi) below) or any
representation or warranty shall prove to be untrue, which failure or
breach shall continue unremedied for a period of 60 days after the date on
which written notice of such failure shall have been given to the Servicer,
the Master Servicer, the Indenture Trustee and the Depositor by the Master
Servicer, the Indenture Trustee or the Depositor, or to the Servicer, the
Master Servicer, the Indenture Trustee and the Depositor by the Holders of
Securities evidencing greater than 50% of the Voting Rights evidenced by
the Securities; or
46
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
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
consecutive days; or
(iv) consent by the Servicer to the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings of or relating to the Servicer or
all or substantially all of the property of the Servicer; or
(v) admission by the Servicer in writing of its inability to pay its
debts generally as they become due, file a petition to take advantage of,
or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) any failure by the Servicer to duly perform, within the required
time period, its obligations under Sections 3.17, 3.18 and 3.20 of this
Agreement, which failure continues unremedied for a period of ten (10) 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 Indenture
Trustee or any other party to this Agreement.
If a Servicing Default shall occur with respect to Wilshire or a
termination event shall occur under the Countrywide Servicing Agreement with
respect to Countrywide, then, and in each and every such case, so long as such
Servicing Default shall not have been remedied within the applicable grace
period, the Indenture Trustee may, or at the direction of the Holders of
Securities evidencing greater than 50% of the Voting Rights evidenced by the
Securities 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 this Agreement or the Countrywide Servicing Agreement, as
applicable, and in and to the related Mortgage Loans and the proceeds thereof,
other than its rights as a Securityholder hereunder. On or after the receipt by
the applicable Servicer of such written notice, all authority and power of the
Servicer hereunder, whether with respect to the related Mortgage Loans or
otherwise, shall pass to and be vested in the Master Servicer. To the extent the
Servicing Default resulted from the failure of the Servicer to make a required
Advance, the Master Servicer shall thereupon make any Advance described in
Section 4.01 hereof subject to Section 3.04 hereof. The Indenture Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
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. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Servicer to pay
amounts owed pursuant to Article VI. The Servicer agrees to cooperate with the
Master Servicer in effecting the termination of the Servicer's responsibilities
and rights hereunder, including, without limitation, the transfer to the Master
Servicer of all cash amounts which shall at the time be credited to the
Collection Account, or thereafter be received with respect to the Mortgage
Loans. The Servicer and the Master Servicer shall promptly notify the Rating
Agencies of the occurrence of a Servicing Default, such notice to be provided in
any event within two Business Days of such occurrence.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due
47
prior to the notice terminating the Servicer's rights and obligations as
Servicer hereunder and received after such notice, that portion thereof to which
the Servicer would have been entitled pursuant to Sections 3.08(a) (i) through
(ix) and (xi), and any other amounts payable to the Servicer hereunder the
entitlement to which arose prior to the termination of its activities hereunder.
Notwithstanding anything herein to the contrary, upon termination of the
Servicer hereunder, any liabilities of the Servicer which accrued prior to such
termination shall survive such termination.
(b) "Master Servicer Event of Default," wherever used herein, means any one
of the following events:
(i) any failure by the Master Servicer to make any Advance, to deposit
in the Master Servicer Collection Account or remit to the Securities
Administrator any payment required to be made under the terms of this
Agreement, which failure shall continue unremedied for three (3) Business
Days after the date on which written notice of such failure shall have been
given to the Master Servicer by the Indenture Trustee or the Depositor, or
to the Indenture Trustee, the Depositor and the Master Servicer by the
Holders of Securities evidencing greater than 50% of the Voting Rights
evidenced by the Securities; or
(ii) any failure by the Master Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Master Servicer contained in this Agreement or any representation or
warranty shall prove to be untrue, which failure or breach shall continue
unremedied for a period of sixty (60) days after the date on which written
notice of such failure shall have been given to the Master Servicer by the
Indenture Trustee or the Depositor, or to the Master Servicer, the
Indenture Trustee and the Depositor by the Holders of Securities evidencing
greater than 50% of the Voting Rights evidenced by the Securities; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
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) consecutive days; or
(iv) consent by the Master Servicer to the appointment of a receiver
or liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings of or relating to the Master
Servicer or all or substantially all of the property of the Master
Servicer; or
(v) admission by the Master Servicer in writing of its inability to
pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable insolvency
or reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) any failure by the Master Servicer to duly perform, within the
required time period, its obligations under Sections 3.17, 3.18 and 3.20 of
this Agreement, which failure continues unremedied for a period of ten (10)
days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer by the
Indenture Trustee or any other party to this Agreement.
If a Master Servicer Event of Default shall occur with respect to the
Master Servicer, then, and in each and every such case, so long as such Master
Servicer Event of Default shall not have been remedied
48
within the applicable grace period, the Indenture Trustee may, or at the
direction of the Holders of Securities evidencing greater than 50% of the Voting
Rights evidenced by the Securities shall, by notice in writing to the Master
Servicer (with a copy to each Rating Agency), terminate all of the rights and
obligations of the Master Servicer under this Agreement and in and to the
related Mortgage Loans and the proceeds thereof, other than its rights as a
Securityholder hereunder. On or after the receipt by the Master Servicer of such
written notice, all authority and power of the Master Servicer hereunder,
whether with respect to the related Mortgage Loans or otherwise, shall pass to
and be vested in the Indenture Trustee. To the extent the Master Servicer Event
of Default resulted from the failure of the Master Servicer to make a required
Advance, the Indenture Trustee (solely in its capacity as successor master
servicer) shall thereupon make any Advance described in Section 4.01 hereof
subject to Section 3A.01 hereof. The Indenture Trustee (solely in its capacity
as successor master servicer) is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Master Servicer to pay amounts owed pursuant to Article VIII. The Master
Servicer agrees to cooperate with the Indenture Trustee in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Indenture Trustee of all cash
amounts which shall at the time be credited to the Master Servicer Collection
Account, or thereafter be received with respect to the Mortgage Loans. The
Master Servicer and the Indenture Trustee shall promptly notify the Rating
Agencies of the occurrence of a Master Servicer Event of Default, such notice to
be provided in any event within two Business Days of such occurrence.
Notwithstanding any termination of the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan that was due prior to the
notice terminating the Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
the Master Servicer would have been entitled pursuant to Sections 3.08(b), and
any other amounts payable to the Master Servicer hereunder the entitlement to
which arose prior to the termination of its activities hereunder.
Notwithstanding anything herein to the contrary, upon termination of the Master
Servicer hereunder, any liabilities of the Master Servicer which accrued prior
to such termination shall survive such termination.
Section 7.02 Master Servicer or Indenture Trustee to Act; Appointment of
Successor.
(a) On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof (or with respect to Countrywide, under Section
6.01 of the Countrywide Servicing Agreement), the Master Servicer shall, to the
extent provided in Section 3.04, be the successor to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof and applicable law including the obligation to make advances pursuant to
Section 4.01. As compensation therefor, subject to the last paragraph of Section
7.01, the Master Servicer shall be entitled to all fees, compensation and
reimbursement for costs and expenses that the Servicer would have been entitled
to hereunder if the Servicer had continued to act hereunder. Notwithstanding the
foregoing, if the Master Servicer has become the successor to the Servicer in
accordance with Section 7.01 hereof, the Master Servicer may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
Advances pursuant to Section 4.01 hereof or if it is
49
otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution
provided the appointment of such successor does not adversely affect the then
current rating of the Securities by each Rating Agency as the successor to the
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder. Any successor Servicer shall be
an institution that is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved seller/servicer in
good standing, that has a net worth of at least $15,000,000, and that is willing
to service the Mortgage Loans and executes and delivers to the Depositor and the
Master Servicer an agreement accepting such delegation and assignment, that
contains an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer (other than
liabilities of the Servicer under Section 6.03 hereof incurred prior to
termination of the Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; and provided further that each
Rating Agency acknowledges that its rating of the Securities in effect
immediately prior to such assignment and delegation will not be qualified or
reduced as a result of such assignment and delegation. No appointment of a
successor to the Servicer hereunder shall be effective until the Master Servicer
shall have consented thereto and written notice of such proposed appointment
shall have been provided by the Master Servicer to each Securityholder. The
Master Servicer shall not resign as servicer until a successor servicer has been
appointed and has accepted such appointment. Pending appointment of a successor
to the Servicer hereunder, the Master Servicer, unless the Master Servicer is
prohibited by law from so acting, shall, subject to Section 3.04 hereof, 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 and such successor
shall agree; provided, however, that no such compensation shall be in excess of
that permitted the Servicer hereunder. 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 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 Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.
(b) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Indenture Trustee shall, to the
extent provided in Section 3A.01, be the successor to the Master Servicer in its
capacity as master servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof and applicable law including the obligation to make advances
pursuant to Section 4.01. As compensation therefor, subject to the last
paragraph of Section 7.01, the Indenture Trustee shall be entitled to all fees,
compensation and reimbursement for costs and expenses that the Master Servicer
would have been entitled to hereunder if the Master Servicer had continued to
act hereunder. Notwithstanding the foregoing, if the Indenture Trustee has
become the successor to the Master Servicer in accordance with Section 7.01
hereof, the Indenture Trustee may, if it shall be unwilling to so act, or shall,
if it is prohibited by applicable law from making Advances pursuant to Section
4.01 hereof or if it is otherwise unable to so act, appoint, or petition a court
of competent jurisdiction to appoint, any established mortgage loan servicing
institution provided the appointment of such successor does not adversely affect
the then current rating of the Securities by each Rating Agency as the successor
to the Master Servicer hereunder in the assumption of all or any part
50
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Any successor Master Servicer shall be an institution that is a ▇▇▇▇▇▇ ▇▇▇ and
▇▇▇▇▇▇▇ Mac approved seller/servicer in good standing, that has a net worth of
at least $15,000,000, and that is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Indenture Trustee an agreement
accepting such delegation and assignment, that contains an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Master Servicer (other than liabilities of the Master
Servicer under Sections 6.03 and 3A.07 hereof incurred prior to termination of
the Master Servicer under Section 7.01), with like effect as if originally named
as a party to this Agreement; and provided further that each Rating Agency
acknowledges that its rating of the Securities in effect immediately prior to
such assignment and delegation will not be qualified or reduced as a result of
such assignment and delegation. No appointment of a successor to the Master
Servicer hereunder shall be effective until the Indenture Trustee shall have
consented thereto and written notice of such proposed appointment shall have
been provided by the Indenture Trustee to each Securityholder. The Indenture
Trustee shall not resign as master servicer until a successor master servicer
has been appointed and has accepted such appointment. Pending appointment of a
successor to the Master Servicer hereunder, the Indenture Trustee, unless the
Indenture Trustee is prohibited by law from so acting, shall, subject to Section
3A.01 hereof, act in such capacity as hereinabove provided. In connection with
such appointment and assumption, the Indenture Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Master Servicer hereunder.
The Indenture Trustee and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession. Neither
the Indenture Trustee nor any other successor master 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 Master Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
Section 7.03. Notification to Securityholders.
Upon any termination of or appointment of a successor to the Master
Servicer or a Servicer pursuant to this Article VII and Sections 3A.08 or 6.04,
respectively, the Securities Administrator shall give prompt written notice
thereof to the Securityholders, the Issuing Entity and each Rating Agency or, as
applicable, the Master Servicer shall give prompt written notice thereof to the
Securities Administrator.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Amendment.
This Servicing Agreement may be amended from time to time by the parties
hereto, provided that any amendment be accompanied by a tax opinion to the
effect that neither such amendment nor any action permitted by such amendment
and not otherwise permitted by this Servicing Agreement will cause any REMIC
created pursuant to the Indenture to fail to qualify as a REMIC or give rise to
the imposition of a tax on "prohibited transactions" of a REMIC. Promptly after
the execution by the Servicer, the Depositor, the Issuing Entity, the Master
Servicer, the Securities Administrator and the Indenture Trustee of any
amendment of this Servicing Agreement pursuant to this Section 8.01, the
Securities Administrator shall provide the Rating Agencies with written copies
thereof. Any failure of the Securities Administrator
51
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such amendment.
The Issuing Entity shall not enter into any amendment to this Agreement
that could have a materially adverse effect on the Swap Counterparty without
first obtaining the consent of the Swap Counterparty, as applicable.
Section 8.02. Governing Law.
THIS SERVICING 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.
Section 8.03. 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
certified mail, return receipt requested, to (a) in the case of Wilshire,
Wilshire Credit Corporation, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, (b) in the case of ▇▇▇▇▇'▇ Investors Service,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (c) in the case of
Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - 41st Floor, New York, New York 10041, (d)
in the case of Fitch Ratings, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
(e) in the case of the Issuing Entity, in care of Wilmington Trust Company, as
set forth in the Trust Agreement, (f) in the case of the Securities
Administrator or the Master Servicer, LaSalle Bank National Association, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: Global
Securities and Trust Services--MLMI 2006-SL2, (g) in the case of the Indenture
Trustee, Citibank, N.A., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇, Attention: Structured Finance Agency and Trust - MLMI 2006-SL2, (h) in
the case of the Depositor, at ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, 4 World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: MLMI 2006-SL2; (i) in the case of the Underwriter, at ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Investors, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 4 World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MLMI 2006-SL2; (j) in the case of
the Sponsor, at ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 4 World
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MLMI
2006-SL2; or, as to each party, at such other address as shall be designated by
such party in a written notice to each other party. Any notice required or
permitted to be mailed to a Securityholder shall be given by first class mail,
postage prepaid, at the address of such Securityholder as shown in the Register.
Any notice so mailed within the time prescribed in this Servicing Agreement
shall be conclusively presumed to have been duly given, whether or not the
Securityholder receives such notice. Any notice or other document required to be
delivered or mailed by the Securities Administrator to any Rating Agency shall
be given on a reasonable efforts basis and only as a matter of courtesy and
accommodation and the Securities Administrator shall have no liability for
failure to delivery such notice or document to any Rating Agency.
Section 8.04. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Servicing 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 Servicing
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Servicing Agreement or of the Securities or the rights of the
Securityholders thereof.
Section 8.05. Third-Party Beneficiaries.
52
This Servicing Agreement will inure to the benefit of and be binding upon
the parties hereto, the Securityholders, the Owner Trustee, the Swap
Counterparty and their respective successors and permitted assigns. Except as
otherwise provided in this Servicing Agreement, no other Person will have any
right or obligation hereunder.
Section 8.06. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 8.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 8.08. Termination.
The respective obligations and responsibilities of the Servicer, the Master
Servicer, the Securities Administrator, the Issuing Entity and the Indenture
Trustee created hereby shall terminate upon the last action required to be taken
by the Issuing Entity pursuant to the Trust Agreement and by the Securities
Administrator pursuant to the Indenture following the later of the date on or
before which the Indenture or Trust Agreement is terminated.
Section 8.09. Certain Matters Affecting the Indenture Trustee and the Securities
Administrator.
For all purposes of this Servicing Agreement, in the performance of any of
its duties or in the exercise of any of its powers hereunder, the Indenture
Trustee and the Securities Administrator shall be subject to and entitled to the
benefits of Article VI of the Indenture.
Section 8.10. Owner Trustee Not Liable for Mortgage Files.
The recitals contained herein shall not be taken as the statements of the
Owner Trustee, and the Owner Trustee assumes no responsibility for the
correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Servicing Agreement, of any Operative Document
or of the Securities (other than the signatures of the Owner Trustee on the
Securities) or the Notes, or of any Mortgage Files. The Owner Trustee shall at
no time have any responsibility or liability with respect to the sufficiency of
the Trust Estate or its ability to generate the payments to be distributed to
Securityholders under the Trust Agreement or the Noteholders under the
Indenture, including, the compliance by the Depositor or the Sponsor with any
warranty or representation made under any Operative Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Paying Agent, the Certificate Registrar or the Securities Administrator
taken in the name of the Owner Trustee.
It is expressly understood and agreed by the parties hereto that with
respect to the execution of this Servicing Agreement by Wilmington Trust Company
for the Issuing Entity (a) this Servicing Agreement is executed and delivered by
Wilmington Trust Company, not individually or personally, but solely as Owner
Trustee, in the exercise of the powers and authority conferred and vested in it,
pursuant to the Trust Agreement, (b) each of the representations, undertakings
and agreements herein made on the part of the Issuing Entity is made and
intended not as personal representations, undertakings and
53
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Issuing Entity, (c) nothing herein contained shall be
construed as creating any liability on Wilmington Trust Company, individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any person claiming by, through or under the parties hereto, and (d)
under no circumstances shall Wilmington Trust Company be personally liable for
the payment of any indebtedness or expenses of the Issuing Entity or be liable
for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Issuing Entity under this Servicing Agreement
or any other related documents.
Section 8.11. Additional Termination Requirements.
(a) Notwithstanding any other terms of this Agreement, prior to termination
of the Trust Estate, the Servicer may prepare a reconciliation of all Advances
and Servicing Advances made by it for which it has not been reimbursed and a
reasonable estimate of all additional Servicing Advances and other costs for
which it would be entitled to be reimbursed if the Trust Estate were not being
terminated, including without limitation, any Servicing Advances and other costs
arising under Section 6.03, and the Servicer may recover these Advances,
Servicing Advances and estimated Servicing Advances and other costs from the
Collection Account (to the extent that such recovery of Servicing Advances,
estimated Servicing Advances and other costs constitutes "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)).
(b) Notwithstanding any other terms of this Agreement, unless the Servicer
previously has notified the Indenture Trustee that it has entered into a
servicing agreement for the servicing after the termination date of the Trust
Estate assets, at least twenty (20) days prior to any termination of the Trust
Estate, the Depositor shall notify the Servicer in writing to transfer the
assets of the Trust Estate as of the termination date to the person specified in
the notice, or if such person is not then known, to continue servicing the
assets until the date that is twenty (20) days after the termination date and on
the termination date, the Depositor shall notify the Servicer of the person to
whom the assets should be transferred on that date. In the latter event the
Servicer shall be entitled to recover its servicing fee and any advances made
for the interim servicing period from the collections on the assets which have
been purchased from the Trust Estate and the new owner of the assets, and the
agreements for the new owner to obtain ownership of the assets of the Trust
Estate shall so provide.
Section 8.12. Entire Agreement.
This Servicing Agreement shall constitute the entire agreement between the
parties with respect to the matters contained herein and shall supersede any
prior written or oral agreements relating thereto.
54
IN WITNESS WHEREOF, Wilshire, the Master Servicer, the Securities Administrator,
the Indenture Trustee, the Depositor, the Sponsor and the Issuing Entity have
caused this Servicing Agreement to be duly executed by their respective officers
or representatives all as of the day and year first above written.
WILSHIRE CREDIT CORPORATION, as Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
LASALLE BANK NATIONAL ASSOCIATION,
as Master Servicer and as Securities
Administrator
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS TRUST,
SERIES 2006-SL2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CITIBANK, N.A., not in its individual
capacity, but solely as Indenture
Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
55
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.,
as Depositor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.,
as Sponsor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
56
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[TO BE PROVIDED UPON REQUEST]
A-1
EXHIBIT B
LIMITED POWER OF ATTORNEY
[TO BE PROVIDED UPON REQUEST]
B-1
EXHIBIT C
FORM OF REQUEST FOR RELEASE
To: [LaSalle Bank National Association,
as Custodian
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 60007]
[▇▇▇▇▇ Fargo Bank, N.A.,
as Custodian
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇]
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Securities, Series 2006-SL2
In connection with the administration of the Mortgage Loans held by
you, as Custodian, pursuant to the Indenture, dated as of August 8, 2006, among
Citibank, N.A., as Indenture Trustee, LaSalle Bank National Association, as
Securities Administrator and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Series
2006-SL2, as Trust (the "Indenture"), we request the release, and hereby
acknowledge receipt, of the Mortgage File for the Mortgage Loan described below,
for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
____ 1. Mortgage Paid in Full
____ 2. Foreclosure
____ 3. Substitution
____ 4. Other Liquidation (Repurchases, etc.)
____ 5. Nonliquidation
Address to which the Custodian should deliver the Mortgage File:
By:
------------------------------------
(authorized signer)
Address:
-------------------------------
Date:
----------------------------------
C-1
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Custodian, please acknowledge your receipt by signing in the
space indicated below, and returning this form.
Please acknowledge the execution of the above request by your signature and date
below:
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
[WELL FARGO BANK, N.A.,
as Custodian]
By:
---------------------------------
Signature Date
-----------------------------------
Documents returned to Custodian:
By:
---------------------------------
Signature Date
-----------------------------------
C-2
EXHIBIT D
FORM OF ITEM 1123 CERTIFICATION OF SERVICER
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2006-SL2
Re: Servicing Agreement (the "Agreement"), dated as of July 1, 2006 among
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor, Wilshire Credit
Corporation, as servicer, and LaSalle Bank National Association, as master
servicer and securities administrator, Citibank, N.A., as indenture trustee,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., as sponsor, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors Trust, Series 2006-SL2, as issuing entity, relating to ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed Securities,
Series 2006-SL2
I, [identify name of certifying individual], [title of certifying individual] of
Wilshire Credit Corporation (the "Servicer"), hereby certify that:
(1) A review of the activities of the Servicer during the preceding
calendar year and of the performance of the Servicer under the Agreement has
been made under my supervision; and
(2) To the best of my knowledge, based on such review, the Servicer
has fulfilled all its obligations under the Agreement in all material respects
throughout such year or a portion thereof[, or, if there has been a failure to
fulfill any such obligation in any material respect, I have specified below each
such failure known to me and the nature and status thereof].
Date:
------------------------------
Wilshire Credit Corporation,
as Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
D-11
EXHIBIT E
FORM OF ASSESSMENT OF COMPLIANCE
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc. [Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
4 World Financial Center, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇]
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
LaSalle Bank National Association ▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - Standard & Poor's, a division of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
Investors Trust, Series ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇-▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[SERVICERS AS ADDRESSEES BY CUSTODIAN Fitch Ratings
ONLY] One State Street Plaza
[Wilshire Credit Corporation ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇]
Re: Servicing Agreement (the "Agreement"), dated as of July 1, 2006 among
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor, Wilshire Credit
Corporation, as servicer, and LaSalle Bank National Association, as
master servicer and securities administrator, Citibank, N.A., as
indenture trustee, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., as sponsor,
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Series 2006-SL2, as issuing
entity, relating to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage
Loan Asset-Backed Securities, Series 2006-SL2
For the calendar year ending December 31, [2006] or portion thereof,
[LaSalle Bank National Association, as Master Servicer] [Wilshire Credit
Corporation, as Servicer] [LaSalle Bank National Association, as Securities
Administrator] [LaSalle Bank National Association, as Custodian] [▇▇▇▇▇ Fargo
Bank, National Association, as Custodian] for the Issuing Entity, has complied
in all material respects with the relevant Servicing Criteria in Exhibit F of
the Agreement.
E-1
All capitalized terms used herein but not defined herein shall have
the meanings assigned to them in the Agreement.
Date:
-------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-2
EXHIBIT F
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS unless otherwise noted)
DEFINITIONS KEY: _______________
PRIMARY SERVICER - transaction party having borrower contact X - obligation
SECURITIES ADMINISTRATOR - fiduciary of the transaction and safe keeper of
certain pool assets
WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN THEIR MANAGEMENT ASSERTION THAT THEY ARE ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN THEY ARE RESPONSIBLE FOR IN THE RELATED TRANSACTION
AGREEMENTS.
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
GENERAL SERVICING
CONSIDERATIONS
1122(d)(1)(i) Policies and procedures X X X
are instituted to
monitor any performance
or other triggers and
events of default in
accordance with the
transaction agreements.
1122(d)(1)(ii) If any material IF APPLICABLE FOR IF APPLICABLE IF APPLICABLE IF APPLICABLE
servicing activities A TRANSACTION FOR A FOR A FOR A
are outsourced to third PARTICIPANT TRANSACTION TRANSACTION TRANSACTION
parties, policies and PARTICIPANT PARTICIPANT PARTICIPANT
F-1
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
procedures are
instituted to monitor
the third party's
performance and
compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the N/A N/A N/A N/A
transaction agreements
to maintain a back-up
servicer for the Pool
Assets are maintained.
1122(d)(1)(iv) A fidelity bond and X X
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.
CASH COLLECTION AND
ADMINISTRATION
1122(d)(2)(i) Payments on pool assets X X X
are deposited into the
appropriate custodial
bank
F-2
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
accounts and related
bank clearing accounts
no more than two
business days following
receipt, or such other
number of days
specified in the
transaction agreements.
1122(d)(2)(ii) Disbursements made via X X X Servicer disburses
wire transfer on behalf funds to Master
of an obligor or to an Servicer who
investor are made only disbursed to
by authorized Securities
personnel. Administrator.
Securities
Administrator
disburses funds to
Securityholders.
1122(d)(2)(iii) Advances of funds or X X
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
F-3
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
agreements.
1122(d)(2)(iv) The related accounts X X X
for the transaction,
such as cash reserve
accounts or accounts
established as a form
of over
collateralization, are
separately maintained
(e.g., with respect to
commingling of cash) as
set forth in the
transaction agreements.
1122(d)(2)(v) Each custodial account X X
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)
F-4
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
of the Securities
Exchange Act.
1122(d)(2)(vi) Unissued checks are X
safeguarded so as to
prevent unauthorized
access.
1122(d)(2)(vii) Reconciliations are X X X
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
F-5
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
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.
INVESTOR REMITTANCES
AND REPORTING
1122(d)(3)(i) Reports to investors, X X X
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
F-6
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
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
Pool Assets serviced by
the Servicer.
1122(d)(3)(ii) Amounts due to X X X Each Servicer
investors are allocated remits cash and
and remitted in loan level data to
accordance with Master Servicer
timeframes, based on timelines
distribution priority established in the
and other terms set Servicing
forth in the Agreement (or any
transaction agreements. other applicable
agreement). Master
Servicer remits
cash and loan
level data to
Securities
Administrator
based on timelines
F-7
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
established in the
Servicing
Agreement. The
Securities
Administrator is
responsible for
the allocation of
funds to
Securityholders
using the
appropriate
distribution
priority as
established by the
Indenture.
1122(d)(3)(iii) Disbursements made to X Securities
an investor are posted Administrator
within two business disburses funds to
days to the Servicer's Securityholder.
investor records, or
such other number of
days specified in the
transaction agreements.
1122(d)(3)(iv) Amounts remitted to X X X Each Servicer
investors per the remits funds and
investor reports agree provides certain
with cancelled checks, investor reports
or other form of to the Master
payment, or custodial Servicer within
bank statements. guidelines and
timeframes
established in
F-8
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
Servicing
Agreement. Master
Servicer remits
funds and provides
certain investor
reports to
Securities
Administrator
within guidelines
and timeframes
established in
Servicing
Agreement.
Securities
Administrator
disburses funds to
Securityholders.
POOL ASSET
ADMINISTRATION
1122(d)(4)(i) Collateral or security X X
on pool assets is
maintained as required
by the transaction
agreements or related
pool asset documents.
1122(d)(4)(ii) Pool assets and X X If Securities
related documents are Administrator is
safeguarded as required acting as
by the transaction Custodian.
F-9
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
agreements
1122(d)(4)(iii) Any additions, removals X X
or substitutions to the
asset pool are made,
reviewed and approved
in accordance with any
conditions or
requirements in the
transaction agreements.
1122(d)(4)(iv) Payments on pool X
assets, including any
payoffs, made in
accordance with the
related pool asset
documents are posted to
the Servicer's obligor
records maintained no
more than two business
days after receipt, or
such other number of
days specified in the
transaction agreements,
and allocated to
principal, interest or
other items (e.g.,
escrow) in accordance
with the related pool
asset documents.
1122(d)(4)(v) The Servicer's records X
regarding
F-10
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
the pool assets agree
with the Servicer's
records with respect to
an obligor's unpaid
principal balance.
1122(d)(4)(vi) Changes with respect to X
the terms or status of
an obligor's pool
assets (e.g., loan
modifications or
re-agings) are made,
reviewed and approved
by authorized personnel
in accordance with the
transaction agreements
and related pool asset
documents.
1122(d)(4)(vii) Loss mitigation or X
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
F-11
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
requirements
established by the
transaction agreements.
1122(d)(4)(viii) Records documenting X
collection efforts are
maintained during the
period a pool asset 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
pool assets including,
for example, phone
calls, letters and
payment rescheduling
plans in cases where
delinquency is deemed
temporary (e.g.,
illness or
unemployment).
1122(d)(4)(ix) Adjustments to X
F-12
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
interest rates or rates
of return for pool
assets with variable
rates are computed
based on the related
pool asset documents.
1122(d)(4)(x) Regarding any funds X
held in trust for an
obligor (such as escrow
accounts): (A) such
funds are analyzed, in
accordance with the
obligor's pool asset
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 pool asset
documents and state
laws; and (C) such
funds are returned to
the obligor within 30
calendar days of full
repayment of the
related pool assets, or
such
F-13
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
other number of days
specified in the
transaction agreements.
1122(d)(4)(xi) Payments made on behalf X
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.
1122(d)(4)(xii) Any late payment X
penalties in connection
with any payment to be
made on behalf of an
obligor are paid from
the Servicer's funds
and not charged
F-14
▇▇▇▇▇ FARGO
BANK OR
WILSHIRE CREDIT LASALLE BANK, LASALLE BANK
REGULATION ▇▇ ▇▇▇▇▇▇▇ BANK CORPORATION AS APPLICABLE (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA (MASTER SERVICER) (SERVICER) (CUSTODIAN) ADMINISTRATOR) INFORMATION
------------- ------------------ ----------------- --------------- ------------- -------------- -----------
to the obligor, unless
the late payment was
due to the obligor's
error or omission.
1122(d)(4)(xiii) Disbursements made on X
behalf of an obligor
are posted within two
business days to the
obligor's records
maintained by the
servicer, or such other
number of days
specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, X X
charge-offs and
uncollectible accounts
are recognized and
recorded in accordance
with the transaction
agreements.
1122(d)(4)(xv) Any external X
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.
F-15
EXHIBIT G
▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATES
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
LaSalle Bank National Assocation,
as Securities Administrator
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Securities, Series 2006-SL2
I, [identify the certifying individual], certify that:
1. I have reviewed the report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form
10-K of [identify the issuing entity] (the "Exchange Act periodic reports");
2. Based on my knowledge, the Exchange Act periodic reports, taken as a
whole, do 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 with respect
to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
4. [I am responsible for reviewing the activities performed by the
servicer(s) and based on my knowledge and the compliance review(s) conducted in
preparing the servicer compliance statement(s) required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic
reports, the servicer(s) [has/have] fulfilled [its/their] obligations under the
servicing agreement(s); and]
5. All of the reports on assessment of compliance with servicing criteria
for ABS and their related attestation reports on assessment of compliance with
servicing criteria for asset-backed securities required to be included in this
report in accordance with Item 1122 of Regulation AB and Exchange Act Rules
13a-18 and 15d-18 have been included as an exhibit to this report, except as
otherwise disclosed in this report. Any material instances of noncompliance
described in such reports have been disclosed in this report on Form 10-K.
G-1
[In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties [name of
servicer, sub-servicer, co-servicer, depositor or securities administrator].]
Date:
-------------------------------
----------------------------------------
[Signature]
----------------------------------------
[Title]
G-2
EXHIBIT H
FORM OF BACK-UP CERTIFICATION OF SECURITIES ADMINISTRATOR
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Servicing Agreement (the "Agreement"), dated as of July 1, 2006 among
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor, Wilshire Credit
Corporation, as servicer, and LaSalle Bank National Association, as master
servicer and securities administrator, Citibank, N.A., as indenture trustee,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., as sponsor, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors Trust, Series 2006-SL2, as issuing entity, relating to ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed Securities,
Series 2006-SL2
The Securities Administrator hereby certifies to the Depositor and
their 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 for the fiscal year
[2006] (the "Annual Report"), and all reports on Form 8-K (if any) and on Form
10-D required to be filed in respect of the period covered by the Annual Report
(collectively with the Annual Report, the "Reports"), of the Issuing Entity;
(2) To the best of my knowledge, and assuming the accuracy of the
statements required to be made or data required to be delivered by the
Servicers, Master Servicer and Depositor (to the extent that such statements or
data were received by the Securities Administrator and are relevant to the
statements made by the Securities Administrator in this Back-Up Certification),
the information in the Reports relating to the Securities Administrator, 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 with respect
to the period covered by the Annual Report;
(3) To the best of my knowledge, and assuming the accuracy of the
statements required to be made or data required to be delivered by the Servicer
and Depositor (to the extent that such statements or data were received by the
Securities Administrator and are relevant to the statements made by the
Securities Administrator in this Back-Up Certification), the distribution and
any other information required to be provided by the Securities Administrator
(other than information provided by or on behalf of the Servicers, the Master
Servicer, the Depositor or other third party) to the Depositor and each Servicer
under the Agreement for inclusion in the Reports is included in the Reports; and
(4) The report on assessment of compliance with servicing criteria for
asset-backed securities of the Securities Administrator and its related
attestation report on assessment of compliance with servicing criteria required
to be included in the Annual Report in accordance with Item 1122 of Regulation
AB and Exchange Act Rules 13a-18 and 15d-18 has been included as an exhibit to
the Annual
H-1
Report. Any material instances of non-compliance are described in such report
and have been disclosed in the Annual Report.
LaSalle Bank National Association,
as Securities Administrator
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
H-2
EXHIBIT I
FORM OF BACK UP CERTIFICATION OF SERVICER
[DATE]
[STILL NEEDS TO BE UPDATED]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2006-SL2
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Securities, Series ▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇ Bank National Association (the "Master Servicer") certifies to
the Depositor and the Securities Administrator, and their officers, directors
and affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
(1) I am responsible for reviewing the activities performed by the
Servicer under the Servicing Agreement and I have reviewed, or persons under my
supervision have reviewed, the servicer compliance statement of the Servicer and
the compliance statements of each Sub-Servicer, if any, engaged by the Servicer
provided to the Depositor, the Master Servicer and the Securities Administrator
for the Trust Estate's fiscal year [___] in accordance with Item 1123 of
Regulation AB (each a "Compliance Statement"), the report on assessment of the
Servicer's compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria") and reports on assessment of compliance
with servicing criteria for asset-backed securities of the Servicer and of each
Sub-Servicer [or Subcontractor], if any, engaged or utilized by the Servicer
provided to the Depositor, the Master Servicer and the Securities Administrator
for the Issuing Entity's fiscal year [___] in accordance with Rules 13a-18 and
15d-18 under Securities Exchange Act of 1934, as amended (the "Exchange Act")
and Item 1122 of Regulation AB (each a "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with Rules
13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB
related to each Servicing Assessment (each a "Attestation Report"), and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans by the Servicer during 200[_] that were
delivered or caused to be delivered by the Servicer pursuant to the Agreement
(collectively, the "Servicing Information");
(2) Based on my knowledge, and assuming the accuracy of the
information provided to the Servicer in connection with the transfer of
servicing of the Mortgage Loans to the Servicer and in connection with the
performance of the Servicer's duties under the Servicing Agreement, the
Servicing Information, 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 the light of the circumstances under which such
I-1
statements were made, not misleading with respect to the period of time covered
by the Servicing Information;
(3) Based on my knowledge, the servicing information required to be
provided to the Master Servicer and the Securities Administrator by the Servicer
pursuant to the Servicing Agreement has been provided to the Securities
Administrator;
(4) Based on my knowledge and the compliance review conducted in
preparing each Compliance Statement of
the Servicer and, if applicable, reviewing each Compliance Statement
of each Sub-Servicer, if any, engaged by the Servicer, and except as disclosed
in such Compliance Statement[(s)], the Servicer [(directly and through its
Sub-Servicers, if any)] has fulfilled its obligations under the Servicing
Agreement in all material respects.
(5) Each Servicing Assessment of the Servicer and of each Sub-Servicer
[or Subcontractor], if any, engaged or utilized by the Servicer and its related
Attestation Report required to be included in the Annual Report in accordance
with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 has
been provided to the Depositor, the Master Servicer and the Securities
Administrator. Any material instances of non-compliance are described in any
such Servicing Assessment or Attestation Report.
Date:
-------------------------------
[Servicer]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
I-2
SCHEDULE I
REPRESENTATIONS AND WARRANTIES OF WILSHIRE
(i) The Servicer is duly organized and is validly existing as a corporation
in good standing under the laws of the State of Nevada and is duly authorized
and qualified to transact any and all business contemplated by this Servicing
Agreement to be conducted by the Servicer 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 ensure its ability to enforce
each Mortgage Loan, to service the Mortgage Loans in accordance with the terms
of this Servicing Agreement and to perform any of its other obligations under
this Servicing Agreement in accordance with the terms hereof.
(ii) The Servicer has the corporate power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Servicing Agreement and has
duly authorized by all necessary corporate action on the part of the Servicer
the execution, delivery and performance of this Servicing Agreement; and this
Servicing Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and binding
obligation of the Servicer, enforceable against the Servicer in accordance with
its terms, except that (a) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally and (b) 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.
(iii) The execution and delivery of this Servicing Agreement by the
Servicer, the servicing of the Mortgage Loans under this Servicing Agreement,
the consummation of any other of the transactions contemplated by this Servicing
Agreement, and the fulfillment of or compliance with the terms hereof are in the
ordinary course of business of the Servicer and will not (A) result in a
material breach of any term or provision of the charter or by-laws of the
Servicer or (B) 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 the Servicer is a party or by
which it may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer 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 the Servicer's ability to perform or meet any of
its obligations under this Servicing Agreement.
(iv) The Servicer is an approved servicer of mortgage loans for ▇▇▇▇▇▇ Mae
and is an approved servicer of mortgage loans for ▇▇▇▇▇▇▇ Mac.
(v) No litigation is pending or, to the best of the Servicer's knowledge,
threatened, against the Servicer that would materially and adversely affect the
execution, delivery or enforceability of this Servicing Agreement or the ability
of the Servicer to service the Mortgage
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Loans or to perform any of its other obligations under this Servicing Agreement
in accordance with the terms hereof.
(vi) 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
Servicing Agreement or the consummation of the transactions contemplated hereby,
or if any such consent, approval, authorization or order is required, the
Servicer has obtained the same.
(vii) The Servicer has fully furnished and will fully furnish (for the
period it serviced the Mortgage Loans), 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 on a monthly basis.
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SCHEDULE II
REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER
(i) It is a national banking association duly formed, validly existing
and in good standing under the laws of the United States of America and is duly
authorized and qualified to transact any and all business contemplated by this
Servicing Agreement to be conducted by the Master Servicer and the Securities
Administrator, to the extent necessary to ensure its ability to master service
the Mortgage Loans in accordance with the terms of this Servicing Agreement and
to perform any of its other obligations under this Servicing Agreement in
accordance with the terms hereof.
(ii) It has the full corporate power and authority to execute, deliver
and perform, and to enter into and consummate the transactions contemplated by
this Servicing Agreement and has duly authorized by all necessary corporate
action on its part the execution, delivery and performance of this Servicing
Agreement; and this Servicing Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms, except that (a) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally and (b) 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.
(iii) The execution and delivery of this Servicing Agreement by it,
the consummation of any other of the transactions contemplated by this Servicing
Agreement, and the fulfillment of or compliance with the terms hereof are in its
ordinary course of business and will not (A) result in a material breach of any
term or provision of its charter or by-laws or (B) 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 it is a party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to it of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it; and it 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
its ability to perform or meet any of its obligations under this Servicing
Agreement.
(iv) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect the execution,
delivery or enforceability of this Servicing Agreement or its ability to perform
any of its other obligations under this Servicing Agreement in accordance with
the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery and
performance of, or compliance with, this Servicing Agreement or the consummation
of the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, it has obtained the same.
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SCHEDULE III
Item on Form 8-K Party Responsible
---------------- -----------------
*Item 1.01- Entry into a Material The parties to this Agreement entering
Definitive Agreement into the material definitive agreement
(excluding the Indenture Trustee)
*Item 1.02- Termination of a Material The parties to this Agreement
Definitive Agreement terminating the material definitive
agreement (excluding the Indenture
Trustee)
Item 1.03- Bankruptcy or Receivership Depositor
Item 2.04- Triggering Events that Depositor
Accelerate or Increase a Direct
Financial Obligation or an Obligation
under an Off-Balance Sheet
Arrangement
*Item 3.03- Material Modification to Securities Administrator
Rights of Security Holders
Item 5.03- Amendments of Articles of Depositor
Incorporation or Bylaws; Change of
Fiscal Year
Item 6.01- ABS Informational and Depositor
Computational Material
*Item 6.02- Change of Servicer or Servicer, Master Servicer, Securities
Trustee Administrator
*Item 6.03- Change in Credit Depositor/Securities Administrator
Enhancement or External Support
*Item 6.04- Failure to Make a Securities Administrator
Required Distribution
Item 6.05- Securities Act Updating Depositor
Disclosure
Item 7.01- Reg FD Disclosure Depositor
Item 8.01 Depositor
Item 9.01 Depositor
SCHEDULE IV
Item on Form 10-D Party Responsible
----------------- -----------------
Item 1: Distribution and Pool Securities Administrator, Master
Performance Servicer and
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Information Plus any information Servicer (with respect to underlying
required by 1121 which is NOT Mortgage Loan data)
included on the monthly statement to
Certificateholders
Depositor, Master Servicer and
Securities Administrator (to the extent
required by Regulation AB)
Item 2: Legal Proceedings per Item All parties to the Servicing Agreement
1117 of Regulation AB (as to themselves), the
Depositor/Securities
Administrator/Servicer/Master Servicer
(to the extent known) as to the Issuing
Entity, the Sponsor, 1106(b) originator,
any 1100(d)(1) party
Item 3: Sale of Securities and Use Depositor
of Proceeds
Item 4: Defaults Upon Senior Securities Administrator
Securities
Item 5: Submission of Matters to a Securities Administrator
Vote of Security Holders
Item 6: Significant Obligors of Depositor/Sponsor/Mortgage Loan
Pool Assets Seller/ Servicer
Item 7: Significant Enhancement Depositor/Sponsor
Provider Information
Item 8: Other Information All parties to the Servicing Agreement
(as to themselves) responsible for
disclosure items on Form 8-K (as
indicated on Schedule III)
Item 9: Exhibits Securities Administrator (with respect
to the Monthly Statements) and Depositor
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SCHEDULE V
Item on Form 10-K Party Responsible
----------------- -----------------
Item 1B: Unresolved Staff Comments Depositor
*Item 9B: Other Information Securities Administrator and any other
party responsible for disclosure items
on Form 8-K (as indicated on Schedule
III)
*Item 15: Exhibits, Financial Securities Administrator/Master
Statement Schedules Servicer/Servicer/subservicers.
Depositor
*Additional Item: All parties to the Servicing Agreement
Disclosure per Item 1117 of (as to themselves), the
Regulation AB Depositor/Securities
Administrator/Servicer/Master Servicer
(to the extent known) as to the Issuing
Entity, the Sponsor, 1106(b) originator,
any 1100(d)(1) party
*Additional Item: All parties to the Servicing Agreement,
Disclosure per Item 1119 of the sponsor, originator, significant
Regulation AB obligor, enhancement or support provider
Additional Item: Depositor/Sponsor/Mortgage Loan
Disclosure per Item 1112(b) of Seller/Servicer/Master Servicer
Regulation AB
Additional Item: Depositor/Sponsor
Disclosure per Items 1114(b) and
1115(b) of Regulation AB
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