Exhibit 10.1
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BEAR ▇▇▇▇▇▇▇ ASSET BACKED SECURITIES I LLC,
as Depositor,
[Name of Seller and Master Servicer],
as Seller and Master Servicer
[Name of Issuing Trust]
as Issuer,
and
[Name of Indenture Trustee]
as Indenture Trustee
SALE AND SERVICING AGREEMENT
Dated as of __________ 1, 200__
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
Section 1.01. Definitions...............................................................................1
Section 1.02. Interpretive Provisions...................................................................1
Section 1.03. Interest Calculations.....................................................................2
ARTICLE II CONVEYANCE OF MORTGAGE LOANS
Section 2.01. Conveyance of Mortgage Loans..............................................................2
Section 2.02. Treatment of Transfer.....................................................................3
Section 2.03. Mortgage File.............................................................................3
Section 2.04. Representations and Warranties of the Master Servicer.....................................4
Section 2.05. Representations and Warranties of the Issuer..............................................5
Section 2.06. Representations and Warranties of the Depositor...........................................5
Section 2.07. Representations and Warranties Regarding the Mortgage Loans...............................7
Section 2.08. Enforcement of Representations and Warranties............................................16
Section 2.09. Future Advances..........................................................................17
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Appointment of the Master Servicer.......................................................17
Section 3.02. Subservicing Agreements Between the Master Servicer and Subservicers.....................19
Section 3.03. Collection of Mortgage Loan Payments.....................................................21
Section 3.04. Permitted Withdrawals from the Collection Account........................................22
Section 3.05. Maintenance of Insurance.................................................................23
Section 3.06. Fidelity Bond; Errors and Omissions Policy...............................................24
Section 3.07. Enforcement of Due-on-Sale Clauses; Assumption Agreements................................24
Section 3.08. Realization upon Defaulted Mortgage Loans................................................25
Section 3.09. Indenture Trustee to Cooperate; Release of Mortgage Files; Trust Estates;
Related Documents........................................................................27
Section 3.10. Servicing Fee; Payment of Certain Expenses by Master Servicer............................29
Section 3.11. Access to Certain Documentation and Information Regarding the Mortgage Loans.............29
Section 3.12. [Reserved.]..............................................................................30
Section 3.13. Recordation of Assignments...............................................................30
Section 3.14. Annual Statement as to Compliance........................................................30
Section 3.15. Annual Independent Public Accountants' Servicing Report..................................30
Section 3.16. ▇▇▇▇▇▇▇▇-▇▇▇▇▇...........................................................................31
Section 3.17. Indemnification; Third-Party Claims......................................................31
Section 3.18. Maintenance of Existence and Licenses; Merger or Consolidation of the Master
Servicer.................................................................................31
Section 3.19. Excluded Amounts.........................................................................32
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ARTICLE IV REPORT TO NOTEHOLDERS
Section 4.01. Report to Noteholders....................................................................32
ARTICLE V THE ACCOUNTS
Section 5.01. Accounts.................................................................................34
Section 5.02. Collection Account.......................................................................34
Section 5.03. Trustee Collection Account...............................................................36
ARTICLE VI THE MASTER SERVICER
Section 6.01. Liability of the Master Servicer.........................................................37
Section 6.02. Merger or Consolidation or Assumption of the Obligations of the Master Servicer..........37
Section 6.03. Limitation on Liability of the Master Servicer and Others................................37
Section 6.04. Master Servicer Not to Resign............................................................38
Section 6.05. Delegation of Duties.....................................................................38
Section 6.06. Indenture Trustee Fees and Expenses; Indemnification.....................................38
Section 6.07. Indemnification of Owner Trustee by Master Servicer......................................40
ARTICLE VII DEFAULT
Section 7.01. Default..................................................................................40
Section 7.02. Indenture Trustee to Act; Appointment of Successor.......................................42
Section 7.03. Notification to Securityholders..........................................................43
ARTICLE VIII MISCELLANEOUS PROVISIONS
Section 8.01. Amendment................................................................................43
Section 8.02. Governing Law............................................................................44
Section 8.03. Notices..................................................................................44
Section 8.04. Severability of Provisions...............................................................44
Section 8.05. Third-Party Beneficiaries................................................................44
Section 8.06. Counterparts.............................................................................44
Section 8.07. Effect of Headings and Table of Contents.................................................45
Section 8.08. Termination; Clean-Up Call...............................................................45
Section 8.09. Certain Matters Affecting the Indenture Trustee..........................................46
Section 8.10. Owner Trustee Not Liable for Mortgage Documents or Related Documents.....................46
Section 8.11. Limitation of Liability of Owner Trustee.................................................46
Section 8.12. Tax Treatment of Servicing Fee and Other Amounts.........................................46
Exhibits
Exhibit A - Mortgage Loan Purchase and Servicing Agreement
Exhibit B - Mortgage Loan Schedule
Exhibit C - Limited Power of Attorney
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Exhibit D - Request for Release of Documents
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Final Certification of Trustee
Exhibit G Form of Certification to be Provided by the
Master Servicer with Form 10-K
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This SALE AND SERVICING AGREEMENT (the "Agreement"), dated as of ______
1, 200__, is among Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, as depositor
(the "Depositor"), [Name of Seller and Master Servicer], as seller (the
"Seller") and as master servicer (the "Master Servicer"), [Name of Issuing
Trust], as issuer (the "Issuer") and [Name of Indenture Trustee], as indenture
trustee (the "Indenture Trustee").
WITNESSETH:
WHEREAS, pursuant to the terms of a Mortgage Loan Purchase and Servicing
Agreement, dated as of ________ __, 200__, attached as Exhibit A hereto,
Seller sold the Mortgage Loans to the Depositor, together with the applicable
Mortgage Documents and Related Documents on _______ __, 200__, and thereafter,
until the end of the Managed Amortization Period, Seller will sell to the
Issuer all Additional Balances relating thereto created after the Cut-Off
Date;
WHEREAS, the Depositor will sell the Mortgage Loans and assign all of its
rights under the Mortgage Loan Purchase and Servicing Agreement to the Issuer,
together with the applicable Mortgage Documents and Related Documents, on the
Closing Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer will
issue the Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue
the Notes; and
WHEREAS, pursuant to the terms of this Agreement, the Master Servicer
will service the Mortgage Loans directly or through one or more Subservicers.
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 Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in Appendix A to the indenture dated as of _____ 1,
200__ (the "Indenture"), between the Issuer and the Indenture Trustee, which
is incorporated by reference herein. All other capitalized terms used herein
shall have the meanings specified herein.
Section 1.02. Interpretive Provisions. Unless the context otherwise
requires, (i) a term has the meaning assigned to it; (ii) an accounting term
not otherwise defined has the meaning assigned to it in accordance with
generally accepted accounting principles as in effect from time to time; (iii)
"or" includes "and/or"; (iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural include
the singular; (vi) the term "proceeds" has the meaning ascribed thereto in the
UCC; (vii) any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection
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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; and (viii) references to a Person are also to such
Person's permitted successors and assigns.
Section 1.03. Interest Calculations. [All calculations of interest
hereunder that are made in respect of any HELOC originated by the Master
Servicer shall be made on an average daily balance basis using a 365/366 day
year.] [All calculations of interest hereunder that are made in respect of any
HLTV or any HEL shall be made either on a daily basis using a 365/366-day year
or on the basis of a 360-day year assumed to consist of twelve 30-day months,
except upon loan payoff, when interest is calculated on an actual 365/366 day
basis.] All calculations of interest on the Notes (other than the Class [A-IO]
Notes) shall be made on the basis of the actual number of days in the related
Interest Period and a year assumed to consist of 360 days. All calculations of
interest on any other Security shall be made on the basis of a 360-day year
assumed to consist of twelve 30-day months. The calculation of the Servicing
Fee shall be made on the basis of the actual number of days in the related
Interest Period and a 360-day year.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
Section 2.01. Conveyance of Mortgage Loans. In consideration of the
Issuer's delivery to or upon the order of the Depositor of executed and
authenticated Notes and Certificates, in authorized denominations and in
aggregate amounts equal to the aggregate Initial Note Balance, the Depositor
does hereby sell, transfer, assign and otherwise convey to the Issuer, in
trust for the benefit of the Securityholders, without recourse, subject to the
Depositor's obligations herein:
(a) all right, title and interest of the Depositor in and to the Mortgage
Loans listed in Exhibit B hereto and all principal and interest collected
after the Cut-Off Date relating to the Cut-Off Date Principal Balances of the
Mortgage Loans, and any Additional Balances relating thereto created on or
after the Cut-Off Date until the end of the Managed Amortization Period;
(b) all right, title and interest of the Depositor in the Lien on the
Mortgaged Properties created by the related Mortgage Documents;
(c) all right, title and interest of the Depositor in any Liquidation
Proceeds and Insurance Proceeds covering the Mortgage Loans or the related
Mortgaged Properties or Mortgagors;
(d) all right, title and interest (but none of the obligations) of the
Depositor under the Mortgage Loan Purchase and Servicing Agreement, including,
but not limited to, the right to enforce, on behalf of the Depositor, the
representations and warranties made by Seller in Section 7.01 thereof relating
to itself, the representations and warranties made by Seller in Section 7.02
thereof relating to the Mortgage Loans sold thereunder, and the rights of the
Depositor under Section 7.03 thereof for any breaches of those representations
and warranties; and
(e) any proceeds of the foregoing and all other assets included or to be
included in the Trust for the benefit of the Securityholders.
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Section 2.02. Treatment of Transfer. It is the intention of the Depositor
that the transfer and assignment contemplated by this Agreement shall
constitute, as of its execution, a sale of all of its right, title and
interest in and to the Mortgage Loans and other property of the Trust Estate
from the Depositor to the Issuer and the beneficial interest in and title to
the Mortgage Loans and the other property shall not be part of the Depositor's
estate in the event of the filing of a bankruptcy petition by or against the
Depositor under any bankruptcy law. In the event that, notwithstanding the
intent of the Depositor, the transfer and assignment contemplated hereby is
held not to be a sale, this Agreement shall be deemed to have constituted a
grant of a security interest in the property referred to in this Section for
the benefit of the Securityholders.
Notwithstanding the characterization of certain classes of the Notes as
debt for federal, state and local income and franchise tax purposes, the
parties hereto intend to treat the transfer of the Mortgage Loans to the Trust
as provided herein as a sale, for certain non-tax purposes, of all the
Depositor's right, title and interest in and to the Mortgage Loans, whether
now existing or hereafter created, and the other property described above and
all proceeds thereof. In the event such transfer is deemed not to be a sale
for such purposes, the Depositor shall be deemed to have granted to the Trust
a security interest in all of the Depositor's right, title and interest in, to
and under the Mortgage Loans, whether now existing or hereafter created, and
the other property described above and all proceeds thereof; and this
Agreement shall constitute a security agreement under applicable law.
The Issuer hereby appoints the Indenture Trustee as its custodian for
purposes of taking possession of the Trust Estate in order to perfect any
security interest arising as a result of the operation of this Section 2.02.
Section 2.03. Mortgage File. In connection with the sale of the Mortgage
Loans to the Depositor pursuant to the Mortgage Loan Purchase and Servicing
Agreement, the Mortgage File with respect to each Mortgage Loan was delivered
to [Name of Indenture Trustee]. In connection with the transfer of the
Mortgage Loans on the Closing Date, the Indenture Trustee will deliver an
initial certification, in the form of the certificate attached as Exhibit E
hereto, certifying that it has received a Mortgage File containing a Mortgage
Note or Loan Agreement for each such Mortgage Loan listed on the Mortgage Loan
Schedule to the Depositor. The Indenture Trustee shall not distribute the
initial certification to any other party. Within [120] days following each
such delivery of Mortgage Files, the Indenture Trustee shall review each such
Mortgage File to ascertain that the Mortgage Documents are contained therein
and that such Mortgage Documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule. Furthermore, the Indenture Trustee shall review
the following data elements contained in the Mortgage Loan Schedule (a)
Seller's loan number, (b) the Mortgagor's name, (c) the address (including
city and state) of the related Mortgaged Property, (d) the original principal
balance and (e) the maturity of the related Mortgage Note. In so doing, the
Indenture Trustee may rely on the purported due execution and genuineness of
any signature thereon. If, within such [120] day period, the Indenture Trustee
finds any Mortgage Document (other than a Mortgage Note for which the
Indenture Trustee has received a lost note affidavit) constituting a part of a
Mortgage File not to have been executed or received or to be unrelated to the
Mortgage Loan identified in the Mortgage Loan Schedule, the Indenture Trustee
shall, promptly upon the conclusion of its review, notify the Master Servicer
and the Depositor in the form of the certificate attached as Exhibit F hereto.
The list of noted exceptions included on such Exhibit F or of any exceptions
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still existing after delivery of the initial certification shall not be
provided by the Indenture Trustee to any Securityholder (or beneficial owner
thereof). The Master Servicer shall cause Seller or, if applicable, the
Depositor within [120] days of its receipt of such notice, to correct or cure
any such defect or to cause such defect to be corrected or cured or to
substitute for or repurchase the affected Mortgage Loan pursuant to the terms
of the Mortgage Loan Purchase and Servicing Agreement.
The Indenture Trustee shall have no responsibility for reviewing any
Mortgage File except as expressly provided in this Section. In reviewing any
Mortgage File pursuant to this Section, the Indenture Trustee shall have,
without limitation, no responsibility for determining whether any document is
valid and binding, whether the text of any assignment or endorsement is in
proper or recordable form (except, if applicable, to determine if the
Indenture Trustee is the assignee or endorsee thereof), whether any document
has been recorded in accordance with the requirements of any applicable
jurisdiction, whether a blanket assignment is permitted in any applicable
jurisdiction, whether any Person executing any document is authorized to do so
or whether any signature thereon is genuine, but shall only be required to
determine whether a document has been executed and that it appears to be what
it purports to be.
Section 2.04. Representations and Warranties of the Master Servicer. The
Master Servicer represents and warrants to the Issuer and for the benefit of
the Indenture Trustee, as pledgee of the Mortgage Loans, as of the Closing
Date:
(a) the Master Servicer is a [type of entity] duly organized and validly
existing under the laws of the State of _______, and has full power and
authority to own its assets and to transact the business in which it is
currently engaged. The Master Servicer (including, where appropriate, through
its subsidiaries), is duly qualified to do business and is in good standing in
each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure to so qualify would have a material adverse effect on the business,
properties, assets or condition (financial or otherwise) of the Master
Servicer;
(b) the Master Servicer has full power and authority to make, execute,
deliver and perform this Agreement and all of the transactions contemplated
hereunder (including, where appropriate, through its subsidiaries), and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Agreement;
(c) the Master Servicer is not required to obtain the consent of any
other Person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consent, license, approval
or authorization or registration or declaration as shall have been obtained or
filed, as the case may be;
(d) the execution and delivery of this Agreement and the performance of
the transactions contemplated hereby by the Master Servicer will not violate
any material provision of any existing law or regulation or any order or
decree of any court applicable to the Master Servicer or any provision of the
articles or bylaws of the Master Servicer, or constitute a material
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breach of any mortgage, indenture, contract or other agreement to which the
Master Servicer is a party or by which it may be bound; and
(e) except as disclosed in the Prospectus Supplement, no Proceeding of or
before any court, tribunal or governmental body is currently pending or, to
the knowledge of the Master Servicer, threatened against the Master Servicer
or any of its properties or with respect to this Agreement or the Securities
that in the opinion of the Master Servicer has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by
this Agreement.
The foregoing representations and warranties shall survive the transfer
of the Mortgage Loans to the Trust and any termination of the Master Servicer
hereunder. Upon discovery of a breach of any representation or warranty that
materially and adversely affects the interests of the Securityholders, the
party discovering such breach shall give prompt written notice to the other
parties hereto. Within 90 days of its discovery or its receipt of notice of
such breach or, with the prior written consent of a Responsible Officer of the
Indenture Trustee, such longer period specified in such consent, the Master
Servicer shall cure such breach in all material respects.
Section 2.05. Representations and Warranties of the Issuer. The Issuer
hereby represents and warrants to the Master Servicer and for the benefit of
Indenture Trustee, as pledgee of the Mortgage Loans, as of the Cut-Off Date,
that:
(a) the Issuer is a [type of trust] duly formed and in good standing
under the laws of the State of __________ and has full power, authority and
legal right to execute and deliver this Agreement and to perform its
obligations under this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance by it of this Agreement; and
(b) the execution and delivery by the Issuer of this Agreement and the
performance by the Issuer of its obligations under this Agreement will not
violate any provision of any law or regulation governing the Issuer or any
order, writ, judgment or decree of any court, arbitrator or governmental
authority or agency applicable to the Issuer or any of its assets. Such
execution, delivery, authentication and performance will not require the
authorization, consent or approval of, the giving of notice to, the filing or
registration with, or the taking of any other action with respect to, any
governmental authority or agency regulating the activities of statutory
trusts. 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 Issuer is a party
or by which it may be bound.
Section 2.06. Representations and Warranties of the Depositor. The
Depositor represents and warrants to the Indenture Trustee, as of the Closing
Date, that:
(a) Depositor is a limited liability company, validly existing and in
good standing under the laws of the State of Delaware, and has full power and
authority to own its assets and to transact the business in which it is
currently engaged. The Depositor is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
character of the business transacted by it or any properties owned or leased
by it requires such
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qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets or condition (financial or
otherwise) of the Depositor;
(b) Depositor has full power and authority to make, execute, deliver and
perform this Agreement and all of the transactions contemplated hereunder, and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this Agreement
will constitute the legal, valid and binding obligation of the Depositor
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally, and by the
availability of equitable remedies;
(c) Depositor is not required to obtain the consent of any other Person
or any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement;
(d) the execution, delivery and performance of this Agreement by the
Depositor will not violate any provision of any existing law or regulation or
any order decree of any court applicable to the Depositor or any provision of
the certificate of formation or limited liability agreement of the Depositor,
or constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Depositor is a party or by which it may be bound;
(e) no Proceeding of or before any court, tribunal or governmental body
is currently pending or, to the knowledge of the Depositor, threatened against
the Depositor or any of its properties or with respect to this Agreement or
the Securities;
(f) this Agreement (i) constitutes a valid transfer and assignment to the
Trust of all right, title and interest of the Depositor in and to the Mortgage
Loans, all monies due or to become due with respect thereto, all proceeds of
such Mortgage Loans, such funds as are from time to time on deposit in the
Collection Account or Trustee Collection Account and all other property
specified in the definition of "Trust Estate" as being part of the Trust
Estate; and upon payment for Additional Balances relating thereto, if any,
will constitute a valid transfer and assignment to the Trust of all right,
title and interest of the Depositor in and to such Additional Balances, all
monies due or to become due with respect thereto, all proceeds of such
Additional Balances and all other property relating thereto that is specified
in the definition of "Trust Estate" relating to Additional Balances or (ii)
constitutes a grant of a security interest, as defined in the UCC as in effect
in the State of New York, in such property in favor of the Trust or the Owner
Trustee on behalf of the Trust; provided, however, that if the Indenture
Trustee obtains and maintains possession of the Mortgage File for each
Mortgage Loan, the Trust shall have a first priority perfected security
interest in such property; and
(g) immediately prior to the transfer and assignment to the Trust of all
of its right, title and interest in and to the Mortgage Loans, the Depositor
was the sole owner of record and was the holder of the Mortgage Loans and the
indebtedness evidenced by the related Mortgage Notes or Loan Agreements. Upon
the transfer and assignment to the Issuer, the Mortgage Loans, including the
related Mortgage Notes or Loan Agreements and the Mortgages, were not subject
to an assignment, sale or pledge to any Person other than Issuer and the
Depositor had good and
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marketable title to and was the sole owner thereof and had full right to
transfer and sell the Mortgage Loans to the Issuer free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest and has
the full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign the Mortgage Loans
pursuant to this Agreement and following the sale of the Mortgage Loans, the
Issuer will own the Mortgage Loans free and clear of any encumbrance, equity,
participation interest, lien other than Permitted Liens, pledge, charge, claim
or security interest. The Depositor intends to relinquish all rights to
possess, control and monitor the Mortgage Loans, and the Depositor has taken
all action necessary to transfer its ownership of the Mortgage Loans to the
Trust. The Depositor acquired any right, title and interest in and to the
Mortgage Loans in good faith and without notice of any adverse claim.
The foregoing representations and warranties shall survive the sale and
assignment of the Mortgage Loans to the Trust. Upon discovery of a breach of
any representation or warranty that materially and adversely affects the
interests of the Securityholders, the party discovering such breach shall give
prompt written notice to the other parties hereto. Within 90 days of its
discovery or its receipt of notice of such breach or, with the prior written
consent of a Responsible Officer of the Indenture Trustee, such longer period
specified in such consent, the Depositor shall cure such breach in all
material respects.
Section 2.07. Representations and Warranties Regarding the Mortgage
Loans.
(a) Seller restates below, for the benefit of the Issuer, with respect to
each Mortgage Loan, the same representations and warranties made by Seller to
the Depositor in Section 7.02 of the Mortgage Loan Purchase and Servicing
Agreement (all capitalized terms used and not defined herein shall have the
meanings given to such terms in the Mortgage Loan Purchase and Servicing
Agreement). Each representation and warranty set forth below is made by Seller
only as of ________ __, 200__.
i. The information set forth in the Mortgage Loan Schedule to the
Mortgage Loan Purchase and Servicing Agreement is complete, true and
correct in all material respects.
ii. [_____]% of the Mortgage Loans by Stated Principal Balance have
a payment which is greater than 29 days past due and [___]% of the
Mortgage Loans have no payment which is greater than 59 days past due. To
the best of Seller's knowledge, a Mortgage Loan has been dishonored and
there are no material defaults under the terms of the Mortgage Loan,
except as set forth in this clause ii;
iii. To the best of Seller's knowledge, there is no valid offset,
right of rescission, defense or counterclaim of any obligor under any
Mortgage Note, Loan Agreement or Mortgage, including the obligation of
the Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note or Loan Agreement, and any applicable right of rescission has
expired, nor will the operation of any of the terms of such Mortgage
Note, Loan Agreement or Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note, Loan Agreement or the
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, recoupment, counterclaim
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or defense, including, without limitation, the defense of usury, and no
such right of rescission, set-off, recoupment, counterclaim or defense
has been asserted with respect thereto. To the best of Seller's
knowledge, no Mortgage Loan is subject to any pending bankruptcy,
insolvency, reorganization or moratorium.
iv. Other than amounts that constitute Permitted Liens, to the best
of Seller's knowledge, there are no mechanics' liens, materialmen's liens
or similar liens or claims for work, labor or material affecting any
Mortgaged Property which have been filed (and no rights are outstanding
that under law could give rise to such liens), which are or may be a lien
prior to, or equal with, the lien of such Mortgage.
v. To the best of Seller's knowledge, there was and there currently
is no material damage to any such Mortgaged Property. To the best of
Seller's knowledge, there is no proceeding pending or threatened for the
total or partial condemnation of any of the Mortgaged Properties. Seller
has not received notification that any such proceedings are scheduled to
commence at a future date.
vi. Each Mortgage is a valid, subsisting, enforceable and perfected
first or more junior lien on the Mortgaged Property securing the related
Mortgage Note or Loan Agreement, including all buildings on the Mortgaged
Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems affixed to such buildings, and all
additions, alterations and replacements made at any time with respect to
the foregoing securing the Mortgage Note or Loan Agreement's original
principal balance subject to principles of equity, bankruptcy, insolvency
and other laws of general application affecting the rights of creditors.
Each Mortgaged Property is owned by the Mortgagor in fee simple and is
free and clear of all adverse claims, encumbrances and liens other than
Permitted Liens having priority over the lien of the Mortgage. Any
security agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting enforceable, and perfected lien and security
interest on the property described therein, and immediately prior to the
sale of such Mortgage Loan to the Depositor pursuant to the Mortgage Loan
Purchase and Servicing Agreement and the related Term Sheet, Seller had
full right to sell and assign the same to the Depositor.
vii. Each Mortgage Loan complies with, and Seller has complied with,
applicable local, state and federal laws, regulations and other
requirements including, without limitation, usury, equal credit
opportunity, real estate settlement procedures, the federal
Truth-In-Lending Act and disclosure laws and all applicable predatory and
abusive lending laws, and the consummation of the transactions
contemplated hereby, including without limitation, the receipt of
interest by the owner of such Mortgage Loan, will not involve the
violation of any such laws, rules or regulations. Not more than ___% of
the Mortgage Loans are classified as "high cost" loans under Section 32
of the Home Ownership and Equity Protection Act of 1994. Each Mortgage
Loan is being (and has been) serviced in accordance with Accepted
Servicing Practices and applicable state and federal laws, including,
without limitation, the federal Truth-In-Lending Act and other consumer
protection laws, real estate settlement procedures, usury, equal credit
opportunity and disclosure laws. Seller shall maintain in its possession,
available for the
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Depositor's inspection, as appropriate, and shall deliver to the
Depositor or its designee upon demand, evidence of compliance with all
such requirements.
viii. Neither Seller nor any prior holder of any Mortgage Loan has
in any material manner impaired, waived, altered or modified the
Mortgage, Mortgage Note or Loan Agreement (except that a Mortgage Loan
may have been modified by a written instrument (a copy of which is in the
Mortgage File and the terms of which are reflected on the Mortgage Loan
Schedule to the Mortgage Loan Purchase and Servicing Agreement) which has
been recorded, if necessary to protect the interests of the owner of such
Mortgage Loan; satisfied, canceled, rescinded or subordinated such
Mortgage in whole or in part; released the applicable Mortgaged Property
in whole or in part from the lien of such Mortgage; or executed any
instrument of cancellation, rescission or satisfaction with respect
thereto. No instrument of release or waiver has been executed in
connection with any Mortgage Loan, and no Mortgagor has been released, in
whole or in part from its obligations in connection with a Mortgage Loan.
ix. A property profile, title search, limited coverage policy or
title insurance policy was obtained with respect to each Mortgage Loan,
to the extent consistent with the normal credit and underwriting policies
of Seller.
x. All of the improvements which were included for the purpose of
determining the Appraised Value of the Mortgaged Property lie wholly
within the boundaries and building restriction lines of such property
(and wholly within the project with respect to a condominium unit), and
no improvements on adjoining properties encroach upon the Mortgaged
Property.
xi. All parties that have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (A) in compliance
with or exempt from any and all applicable licensing requirements of the
laws of the state wherein the Mortgaged Property is located, and (B) (1)
organized under the laws of such state, or (2) qualified to do business
in such state, or (3) federal savings and loan associations or national
banks having principal offices in such state, or (4) not doing business
in such state.
xii. Each Mortgage Note or Loan Agreement and the applicable
Mortgage are original and genuine, and each is the legal, valid and
binding obligation of the maker thereof, enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium, receivership and other similar laws relating to creditors'
rights generally or by equitable principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and Seller
has taken all action necessary to transfer such rights of enforceability
to the Depositor. All parties to the Mortgage Note or Loan Agreement and
the Mortgage had legal capacity to execute the Mortgage Note or Loan
Agreement and the Mortgage and each Mortgage Note or Loan Agreement and
Mortgage has been duly and properly executed by such parties.
xiii. Other than with respect to the undrawn portion of the HELOCs,
the proceeds of the Mortgage Loan have been fully disbursed. there is no
requirement for
9
future advances thereunder and any and all requirements as to completion
of any on-site or off-site improvements. All costs, fees and expenses
incurred in making, closing or recording the Mortgage Loan were paid and
the Mortgagor is not entitled to any refund of amounts paid or due under
the Mortgage Note or Loan Agreement or Mortgage.
xiv. Each Mortgage contains customary and enforceable provisions
that render the rights and remedies of the holder thereof adequate for
the realization against the Mortgaged Property of the benefits of the
security, including (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure or
if applicable, non-judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the property
subject to any senior liens. There is no homestead or other exemption
available to the Mortgagor which would interfere with such right to
foreclose.
xv. With respect to each Mortgage constituting a deed of trust,
either a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in such
Mortgage or if no duly qualified trustee has been properly designated and
so serves, the Mortgage contains satisfactory provisions for the
appointment of such trustee by the holder of the Mortgage at no cost or
expense to such holder, and no fees or expenses are or will become
payable by the Depositor to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the Mortgagor.
xvi. There are no defaults by Seller in complying with the terms of
the Mortgage, and to the best of Seller's knowledge all taxes,
governmental assessments, water, sewer and municipal charges, leasehold
payments or ground rents or other outstanding charges affecting the
Mortgaged Property which previously became due and owing have been paid.
xvii. The Mortgage Note or Loan Agreement is not and has not been
secured by any collateral, pledged account or other security other than
the lien of the corresponding Mortgage and such collateral does not serve
as security for any other obligation (other than the related first lien
mortgage and other Permitted Liens) and no Mortgage Loan is secured by
more than one Mortgaged Property.
xviii. There is no material default, breach or event of acceleration
existing under the Mortgage or the applicable Mortgage Note or Loan
Agreement, and no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration; and none of (i)
Seller and any of its affiliates (ii) any servicer or subservicer and
(iii) any prior mortgagee, of any Mortgage Loan has waived any material
default, breach or event of acceleration. no foreclosure action is
threatened or has been commenced with respect to the Mortgage Loan.
10
xix. There is no obligation on the part of Seller or any other party
to make any payments with respect to the related Mortgage Loan in
addition to the Monthly Payments required to be made by the applicable
Mortgagor and except in the case of the undrawn portion of the HELOCs as
of ________ __, 200__, the Mortgage Note or Loan Agreement with respect
to any Mortgage Loan does not permit or obligate Seller to make future
advances to the Mortgagor at the option of the Mortgagor.
xx. Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount required
by the Mortgage Loan.
xxi. [Reserved.]
xxii. Each of the Mortgaged Properties consists of a single parcel
of real property with a detached single-family residence erected thereon
(including a manufactured dwelling deemed to be real estate under
applicable state law), or a two- to four-family dwelling, or a townhouse,
or an individual condominium unit in a condominium project, or an
individual unit in a planned unit development. No Mortgaged Property
consists of cooperative housing or stock in a cooperative housing
corporation. No Mortgaged Property is a timeshare.
xxiii. None of the Mortgage Loans provide for deferred interest or
negative amortization. The Mortgage Loan is not a graduated payment
Mortgage Loan.
xxiv. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in
any separate account established by Seller, the Mortgagor or anyone on
behalf of the Mortgagor, or paid by any source other than the Mortgagor.
xxv. Seller is the sole owner of record and is the holder of the
Mortgage Loan and the indebtedness evidenced by the Mortgage Note or Loan
Agreement. Upon the sale of the Mortgage Loan to the Depositor, Seller
will retain the Mortgage File or any part thereof with respect thereto
not delivered to the Depositor or the Depositor's designee in trust only
for the purpose of servicing and supervising the servicing of the
Mortgage Loan. Upon the transfer and assignment to the Depositor, the
Mortgage Loan, including the Mortgage Note or Loan Agreement and the
Mortgage, was not subject to an assignment sale or pledge to any person
other than Depositor and Seller had good and marketable title to and was
the sole owner thereof and had full right to transfer and sell the
Mortgage Loan to Depositor free and clear of any encumbrance, equity,
lien, pledge, charge, claim or security interest and has the full right
and authority subject to no interest or participation of, or agreement
with, any other party, to sell and assign the Mortgage Loan pursuant to
the Mortgage Loan Purchase and Servicing Agreement and following the sale
of the Mortgage Loan, the Depositor will own such Mortgage Loan free and
clear of any encumbrance, equity, participation interest, lien other than
Permitted Liens, pledge, charge, claim or security interest. Seller
intends to relinquish all rights to possess, control and monitor the
Mortgage Loan, except for the purposes of servicing the Mortgage Loan as
set forth in the Mortgage Loan Purchase and Servicing Agreement.
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After ________ __, 200__, Seller will not have any right to modify or
alter the terms of the sale of the Mortgage Loan and Seller will not have
any obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in the Mortgage Loan Purchase
and Servicing Agreement, or as otherwise agreed to by Seller and
Depositor. Seller acquired any right, title and interest in and to the
Mortgage Loans in good faith and without notice of any adverse claim.
xxvi. Other than with respect to the HELOCs, all of the Mortgage
Loans are fixed-rate mortgage loans. Unless otherwise indicated on the
Mortgage Loan Schedule to the Mortgage Loan Purchase and Servicing
Agreement, other than with respect to the HELOCs, each Mortgage Note is
payable in monthly installments of principal and interest, with interest
calculated and payable in arrears, sufficient to amortize the Mortgage
Loan fully by the stated maturity date, over an original term of not more
than thirty years from origination. Each HELOC provides for an initial
period (the "Revolving Period") during which the Mortgagor is required to
make monthly payments of interest payable in arrears and requires
repayment of the unpaid principal balance thereof over a period following
the Revolving Period which is not in excess of [___] months. Except with
respect to the HELOCs, principal payments on the Mortgage Loan commenced
no more than ninety (90) days after the funds were disbursed in
connection with the Mortgage Loan. All required notices of interest rate
and payment amount adjustments have been sent to the Mortgagor on a
timely basis and the computations of such adjustments were properly
calculated. Installments of interest are subject to change due to the
adjustments to the Mortgage Interest Rate of each interest rate
adjustment, with interest calculated and payable in arrears. All Mortgage
interest rate adjustments have been made in strict compliance with state
and federal law and the terms of the related Note. Any interest paid has
been properly credited pursuant to state and local law.
xxvii. The Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior
written consent of the mortgagee thereunder, at the option of the
mortgagee and such provision is enforceable.
xxviii. Each of the Mortgage and, with respect to each Mortgage Loan
that is not a MERS Mortgage Loan, the Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.
xxix. Except with respect to [__] Mortgage Loans, no Mortgagor has
notified Seller, and Seller has no other knowledge of any relief
requested or allowed to any Mortgagor under the Soldiers' and Sailors'
Civil Relief Act of 1940.
xxx. To the best knowledge of Seller, there exists no violation of
any local, state, or federal environmental law, rule or regulation with
respect to the Mortgaged Property which violation has or could have a
material adverse effect on the market value of such Mortgaged Property.
Seller has no knowledge of any pending action or proceeding directly
involving the related Mortgaged Property in which compliance with any
environmental law, rule or regulation is an issue. and nothing further
remains to be
12
done to satisfy in full all requirements of each such law, rule or
regulation constituting a prerequisite to the use and enjoyment of such
Mortgaged Property.
xxxi. For each Mortgage Loan, the related Mortgage File is complete
and contains a true, accurate and correct copy of each of the documents
and instruments specified to be included therein.
xxxii. Each Mortgage Note, each Loan Agreement, each Mortgage, each
Assignment of Mortgage and any other documents required pursuant to the
Mortgage Loan Purchase and Servicing Agreement to be delivered by Seller
hereunder has been delivered to Depositor or its agent.
xxxiii. No more than [__]% (by Stated Principal Balance) of the
Mortgage Loans constitute "real estate mortgages" for the purposes of
Treasury Regulation ss. 301.7701(i)-1(d) under the Code. For this purpose
a Mortgage Loan constitutes a "real estate mortgage" if it satisfies
either test set out in paragraph (i) or paragraph (ii) below:
(i) The fair market value of the interest in real property
securing the obligation was at least equal to 80 % of the adjusted
issue price of the obligation at the time the obligation was
originated (or, if later, the time the obligation was significantly
modified). For purposes of this paragraph, the fair market value of
the real property interest must be first reduced by the amount of
any lien on the real property interest that is senior to the
obligation being tested, and must be further reduced by a
proportionate amount of any lien that is in parity with the
obligation being tested. The adjusted issue price of an obligation
is its issue price plus the amount of accrued original issue
discount, if any, as of the date of determination.
(ii) Substantially all of the proceeds of the obligation were
used for one or more of the following purposes: (a) to acquire an
interest in real property. (b) to improve an interest in real
property. or (c) to protect an interest in real property, that, at
the origination date, is the only security for the obligation. For
this purpose only, substantially all of the proceeds of the
obligations means two-thirds or more of the gross proceeds. For
purposes of this paragraph, the use of the proceeds of the related
Mortgage Loan to retire an existing lien against the related
Mortgaged Property is considered use of the proceeds to protect an
interest in real property.
xxxiv. Seller used no selection procedures that identified the
Mortgage Loans as being less desirable or valuable than other comparable
mortgage loans in Seller's portfolio. No statement, tape, diskette, form,
report or other document furnished or to be furnished by Seller pursuant
to the Mortgage Loan Purchase and Servicing Agreement or in connection
with the transactions contemplated hereby contains or will contain any
statement that is or will be inaccurate or misleading in any material
respect or omits to state a material fact required to be stated therein
or necessary to make the information and statements therein not
misleading.
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xxxv. No fraud, error, negligence, misrepresentation or material
omission of fact with respect to a Mortgage Loan has taken place on the
part of Seller or the Mortgagor or any other party involved in the
origination or servicing of the Mortgage Loan.
xxxvi. The Mortgagor has received and has executed, where
applicable, prior to origination of the Mortgage Loan, all disclosure and
rescission materials required by applicable law with respect to the
making of the Mortgage Loan.
xxxvii. To the best of Seller's knowledge, there has been no default
on any senior mortgage loan relating to a Mortgaged Property that has not
been cured by a person other than Seller or an affiliate thereof.
xxxviii. No HEL or HELOC has a Combined Loan-to-Value Ratio in
excess of [__]%. No HLTV has a Combined Loan-to-Value Ratio in excess of
[__]%. "Combined Loan-to-Value Ratio" means, with respect to any Mortgage
Loan, the ratio, expressed as a percentage, of the sum of (a)(i) with
respect to HELs or HLTVs, the original Principal Balance thereof or (ii)
with respect to HELOCs, the credit limit of such HELOC at origination and
(b) the outstanding principal balance at origination of such Mortgage
Loan of all other mortgage loans, if any, secured by senior liens on the
related Mortgaged Property, to the Appraised Value.
xxxix. Excluding matters more specifically addressed in other
subsections of this Section 2.07(a), Seller has no knowledge of any
circumstances or condition with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that could
reasonably be expected to cause investors to regard the Mortgage Loan as
an unacceptable investment, cause such Mortgage Loan to become delinquent
or adversely affect the value or the marketability of the Mortgage Loan.
Seller did not select the Mortgage Loans sold to Depositor based on any
adverse selection of mortgage loans in its portfolio that met Depositor's
purchase parameters for this transaction, including without limitation,
the location or condition of the Mortgaged Property, payment pattern of
the borrower or any other factor that may adversely affect the expected
cost of foreclosing, owning or holding the Mortgage Loans or related
Mortgaged Property or collecting the insurance or guarantee proceeds
related thereto.
xl. Each Mortgage Loan was originated by or for Seller pursuant to,
and conforms with, Seller's underwriting guidelines as attached to the
Mortgage Loan Purchase and Servicing Agreement.
xli. No less than [__]% of the Mortgage Loans by Stated Principal
Balance have a prepayment penalty and at least [__]% by Stated Principal
Balance have a prepayment penalty for at least [__] years. With respect
to each Mortgage Loan that has a prepayment penalty feature, each such
prepayment penalty is enforceable and is permitted pursuant to federal,
state and local law. Seller's business practices are to enforce such
prepayment penalty features, subject to waiver at Seller's option for
reasonable and prudent business purposes, including, without limiting the
foregoing, a refinance of the Mortgage Loan by Seller or any parent,
subsidiary or affiliate of Seller.
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No Mortgage Loan will impose a prepayment penalty for a term in excess of
five years from the date such Mortgage Loan was originated.
xlii. Each Mortgage Loan where the related Mortgage is in first lien
position or where the balance at origination exceeded $[____].00 is
covered by a valid and transferable tax service contract with
Transamerica Real Estate Tax Services, Inc. or such other vendor as may
be reasonably acceptable to the Depositor, which may be assigned without
the payment of any fee by the Depositor.
xliii. [Reserved.]
xliv. The Mortgage Loans conform to the characteristics set forth in
the Term Sheet.
xlv. At least [__]% of the Mortgage Loans by Stated Principal
Balance in each of the Groups have conforming balances under ▇▇▇▇▇▇ ▇▇▇
and ▇▇▇▇▇▇▇ Mac published underwriting guidelines. xlvi. No Mortgage Loan
secured by property located in the State of Georgia and originated on or
after October 1, 2002 qualifies as a "high" cost loan as defined by
applicable Georgia law.
xlvii. No Mortgage Loan secured by property in The City of New York
and originated on or after February 20, 2003 qualifies as a "high cost"
loan under New York City Local Law No. 36 (2002).
xlviii. No Mortgage Loan secured by property in the State of New
York and originated on or after April 1, 2003 qualifies as a "high cost"
loan under New York Banking Law ss.6-1.
(b) [In addition to the representations and warranties made by Seller in
the Mortgage Loan Purchase and Servicing Agreement and assigned to the Issuer
in Section 2.01 and restated by Seller, but only as of ________ __, 200__, for
the benefit of the Issuer in Section 2.07(a), the Depositor hereby makes, for
the benefit of the Issuer, the representations and warranties in Section
2.07(a)[(ii), (iii), (iv), (v) and (vi) with respect to each Mortgage Loan,
but only for the period of time from, and excluding, ________ __, 200__ to,
and including, the Closing Date (the "Applicable Period"). The foregoing
representations and warranties made by the Depositor shall be deemed to be
breached by the Depositor if any such representation and warranty is
inaccurate at any time during the Applicable Period and such inaccuracy is due
to events occurring or facts arising with respect to the Mortgage Loans during
the Applicable Period. The Depositor shall have an obligation pursuant to
Section 2.08 to cure or repurchase a Mortgage Loan for which there is a breach
of its representations and warranties. In the case of any Eligible Substitute
Mortgage Loans, the representations and warranties of the Depositor shall be
deemed to be made as of the related Subsequent Transfer Date.] With respect to
any representation or warranty that was made by Seller in the Mortgage Loan
Purchase and Servicing Agreement to Seller's knowledge, if the substance of
such representation or warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan or the interests
of the
15
Trust, then such inaccuracy shall be deemed a breach of the
representation or warranty for all purposes under this Agreement
notwithstanding such qualification.
(c) The representations and warranties of Seller in the Mortgage Loan
Purchase and Servicing Agreement and restated in Section 2.07(a) [and the
representations and warranties of the Depositor herein] shall survive the
sale, transfer and assignment of the Mortgage Loans to the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture. The
representations and warranties set forth in this Section shall survive
delivery of the Mortgage Files to the Indenture Trustee pursuant to Section
2.04 and the termination of the rights and obligations of the Master Servicer
pursuant to Section 6.04 or Article VII.
Section 2.08. Enforcement of Representations and Warranties. The Master
Servicer, on behalf of and subject to the direction of the Indenture Trustee,
as pledgee of the Mortgage Loans, or the Issuer, shall enforce the
representations and warranties of Seller in Sections 7.01 and 7.02 of the
Mortgage Loan Purchase and Servicing Agreement and in Section 2.07(a), and of
the Depositor in Sections 2.06(f), 2.06(g) [and 2.07(b)], as applicable. Upon
the discovery by the Depositor, the Master Servicer, the Issuer, the Indenture
Trustee or the Custodian of a breach of any of the respective representations
and warranties made by Seller or by the Depositor, that materially and
adversely affects the interests of any Securityholder (or upon the occurrence
of a Repurchase Event), the Person discovering such breach shall give prompt
written notice to the other foregoing Persons and to Seller or the Depositor,
as applicable. The Master Servicer shall promptly demand of Seller or the
Depositor, as applicable, that within 90 days of receipt of notice making such
demand it (i) cure such breach in all material respects with respect to a
breach by Seller of its representations and warranties in Sections 7.01 and
7.02 of the Mortgage Loan Purchase and Servicing Agreement and Section
2.07(a), or a breach by the Depositor of its representations and warranties in
Sections 2.06(f), 2.06(g) [and 2.07(b]), respectively, or (ii) purchase the
related Mortgage Loan from the Issuer or substitute an Eligible Substitute
Mortgage Loan (and remit to the Trustee Collection Account any related
Substitution Adjustment Amount), in the manner set forth in Section 7.03 of
the Mortgage Loan Purchasing and Servicing Agreement in the case of a breach
by Seller of its representation or warranty in Sections 7.01 and 7.02 of the
Mortgage Loan Purchase and Servicing Agreement and Section 2.07(a), or a
breach by Depositor of its representations or warranties in Sections 2.06(f),
2.06(g) and [2.07(b)].
The obligation of Seller or the Depositor, as the case may be, to accept
a retransfer of a Mortgage Loan as to which a breach has occurred and is
continuing and to make any required deposit into the Collection Account or
Trustee Collection Account or to substitute an Eligible Substitute Mortgage
Loan, as the case may be, shall constitute the sole and exclusive remedy
hereunder against Seller or the Depositor, as applicable, respecting such
breach available therefor. Notwithstanding the foregoing limitation, (i) the
Indenture Trustee shall enforce the obligations of Seller in the Mortgage Loan
Purchase and Servicing Agreement to indemnify the Depositor, the Issuer, the
Owner Trustee and the Indenture Trustee as "Purchaser" under the Mortgage Loan
Purchase and Servicing Agreement for the breach of any covenant,
representation or warranty of Seller pursuant to the terms of Section 12.01 of
such agreement and (ii) Seller hereby agrees to indemnify the Trust for any
costs and damages incurred by the Trust in connection with a breach of
Seller's representations and warranties in Section 2.07(a)(vii), (xlvi),
(xlvii) or (xlviii), and that materially and adversely affects the interests
of any Securityholder.
16
In connection with the purchase or substitution of any Mortgage Loan, the
Issuer shall assign to Seller [or the Depositor, as applicable], all of its
right, title and interest in and to such Mortgage Loan. Upon receipt of the
Repurchase Price, or upon the completion of such substitution, the Master
Servicer shall notify the Custodian thereof, and the Custodian shall deliver
the Mortgage Files to the Master Servicer, together with all relevant
endorsements and assignments prepared by the Master Servicer that the
Indenture Trustee shall execute.
Section 2.09. Future Advances. With respect to the HELOCs,
notwithstanding Section 2.01, neither the Indenture Trustee nor the Trust
assumes any obligation under any Loan Agreement that provides for the funding
of future advances to any Mortgagor thereunder, and neither the Trust nor the
Indenture Trustee shall be obligated or permitted to fund any such future
advances. Additional Balances that do not constitute Excluded Amounts shall be
part of the related Principal Balance of such HELOCs as they are created and
are hereby transferred to the Trust as part of the Trust Estate on the Closing
Date pursuant to this Section.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Appointment of the Master Servicer.
(a) [Name of Master Servicer] agrees to act as the Master Servicer and to
perform all servicing duties under this Agreement, subject to the terms
hereof.
(b) The Master Servicer shall service and administer the Mortgage Loans
in a manner consistent with the terms of this Agreement and as shall be normal
and usual in its general mortgage servicing activities and consistent with
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as the Mortgage Loans for their own
accounts in the jurisdictions in which the related Mortgaged Properties are
located, and shall have full power and authority, acting alone or through
Subservicers, to do any and all things in connection with such servicing and
administration as it may deem necessary or desirable; provided, that the
Master Servicer shall at all times remain responsible to the Issuer, the
Indenture Trustee, as pledgee of the Mortgage Loans, for the performance of
its duties and obligations hereunder in accordance with the terms hereof.
Without limiting the generality of the foregoing, the Master Servicer shall
continue, and is hereby authorized and empowered by the Issuer and the
Indenture Trustee, as pledgee of the Mortgage Loans, to execute and deliver,
on behalf of itself, the Issuer, the Indenture Trustee or any of them, any and
all instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments with respect to the
Mortgage Loans and the Mortgaged Properties. The Issuer, the Indenture Trustee
and the Custodian, as applicable, shall furnish the Master Servicer with any
powers of attorney or other documents necessary or appropriate to enable the
Master Servicer to carry out its servicing and administrative duties
hereunder. In addition, the Master Servicer may, at its own discretion and on
behalf of the Issuer, obtain credit information in the form of a "credit
score" from a credit repository. Within 30 days of the Closing Date, the
Indenture Trustee shall deliver to the Master Servicer no less than [__]
original limited powers of attorney substantially in the form of Exhibit C
hereto. Following the Closing Date, the Indenture Trustee shall promptly
deliver further powers of attorney as reasonably requested by the Master
Servicer.
17
In servicing and administering the Mortgage Loans, the Master Servicer
shall employ procedures consistent with the Master Servicer's normal servicing
practices and in a manner consistent with recovery under any insurance policy
required to be maintained by a Mortgagor pursuant to the related Mortgage
Documents or by the Master Servicer pursuant to this Agreement. [With respect
to Mortgage Loans that have not come into default and that constitute not more
than 5% (by Principal Balance) of the Mortgage Loans, the Master Servicer may
(i) permit an increase or decrease of up to 100 basis points in the Mortgage
Interest Rate of a Mortgage Loan and (ii) allow the substitution of collateral
for a Mortgage Loan in such Group, in both cases, in accordance with the
Master Servicer's customary servicing practices. With respect to Mortgage
Loans that have come into and continue in default and that constitute not more
than 5% (by Principal Balance) of the Mortgage Loans, the Master Servicer may
(i) permit any increase or decrease in the Mortgage Interest Rate of a
Mortgage Loan in such Group and (ii) allow the substitution of collateral for
a Mortgage Loan in such Group, in both cases, in accordance with the Master
Servicer's customary servicing practices.]
The Master Servicer may, without prior approval from any Person, increase
the Credit Limit on any HELOC in a manner consistent with the Master
Servicer's customary servicing practices. The Master Servicer may, without
prior approval from any Person, repurchase Mortgage Loans from the Trust at
the Repurchase Price in cases where Mortgage Loans are found to be in breach
of the related purchase agreement that the Master Servicer has with brokers or
correspondent lenders, even if such Mortgage Loans are not otherwise in breach
of this Agreement.
The relationship of the Master Servicer, and of any successor to the
Master Servicer as master servicer hereunder, to the Issuer under this
Agreement is intended by the parties to be that of an independent contractor
and not that of a joint venturer, partner or general agent.
The Master Servicer shall make any Mortgage Interest Rate adjustments on
each Interest Adjustment Date for any Mortgage Loan with an adjustable
Mortgage Interest Rate in compliance with applicable regulatory adjustable
mortgage loan requirements and the related Loan Agreements. The Master
Servicer shall establish procedures to monitor the Interest Adjustment Dates
in order to ensure that it uses a published interest rate in determining an
interest rate change, and it will comply with such procedures. In the event
that a published interest rate is no longer available, the Master Servicer
shall choose a new comparable published interest rate in accordance with the
provisions hereof, the related Loan Agreements and the Master Servicer's
normal servicing practices, and shall provide the related Mortgagor, the
Issuer, the Indenture Trustee with notice of the new published interest rate
sufficient under law and the related Loan Agreement. The Master Servicer shall
execute and deliver all appropriate notices required by the applicable
adjustable mortgage loan laws and regulations and the related Loan Agreements
regarding such adjustments. If the Master Servicer fails to make a timely
Mortgage Interest Rate adjustment in accordance with the terms of the related
Loan Agreement, the Master Servicer shall use its own funds to satisfy any
shortfall in Collections resulting therefrom for so long as such shortfall
shall continue. Any such amount paid by the Master Servicer shall be
reimbursable to it from any subsequent amounts collected on account of the
related Mortgage Loan with respect to such adjustments.
18
(c) On and after such time as the Owner Trustee receives the resignation
of, or notice of the removal of, the Master Servicer from its rights and
obligations under this Agreement, and with respect to a resignation pursuant
to Section 6.04, after receipt by the Owner Trustee of the Opinion of Counsel
required pursuant to Section 6.04, the Indenture Trustee or its designee shall
assume all of the rights and obligations of the Master Servicer, subject to
Section 7.02. The Master Servicer shall, upon request of the Indenture Trustee
and at the expense of the Master Servicer, deliver to the Indenture Trustee
all documents and records relating to the Mortgage Loans and an accounting of
amounts collected and held by the Master Servicer, and shall otherwise use its
best efforts to effect the orderly and efficient transfer of servicing rights
and obligations to the assuming Person.
(d) The Master Servicer shall deliver a list of Servicing Officers to the
Issuer and the Indenture Trustee by the Closing Date, which list may from time
to time be amended, modified or supplemented by the subsequent delivery to the
Issuer and the Indenture Trustee of any superseding list of Servicing
Officers.
(e) The Master Servicer and the Depositor hereby agree that all of the
servicing duties and obligations of [Name of Master Servicer] under the
Mortgage Loan Purchase and Servicing Agreement are hereby superseded in their
entirety by the servicing duties and obligations set forth in this Sale and
Servicing Agreement.
Section 3.02. Subservicing Agreements Between the Master Servicer and
Subservicers.
(a) The Master Servicer may enter into Subservicing Agreements with
Subservicers for the servicing and administration of certain of the Mortgage
Loans and for the performance of any and all other activities of the Master
Servicer hereunder. References in this Agreement to actions taken or to be
taken by the Master Servicer in servicing the Mortgage Loans include actions
taken or to be taken by a Subservicer on behalf of the Master Servicer, and
any amount actually received by such Subservicer in respect of a Mortgage Loan
shall be deemed to have been received by the Master Servicer, whether or not
actually received by the Master Servicer. Each Subservicing Agreement shall be
upon such terms and conditions as are not inconsistent with this Agreement and
as the Master Servicer and the Subservicer shall have agreed. With the
approval of the Master Servicer, a Subservicer may delegate its servicing
obligations to third-party servicers, but such Subservicers shall remain
obligated under the related Subservicing Agreements. The Master Servicer and
the related Subservicers may enter into amendments to the Subservicing
Agreements; provided, that any such amendments shall not cause the Mortgage
Loans to be serviced in a manner that would be materially inconsistent with
the standards set forth in this Agreement. The Master Servicer shall be
entitled to terminate any Subservicing Agreement in accordance with the terms
and conditions thereof and without any limitation by virtue of this Agreement;
provided, that in the event of the termination of any Subservicing Agreement
by the Master Servicer or the related Subservicer, the Master Servicer shall
either act as servicer of the related Mortgage Loans or enter into a
Subservicing Agreement with a successor Subservicer that will be bound by the
terms of the related Subservicing Agreement. The Master Servicer shall be
entitled to enter into any agreement with a Subservicer for indemnification of
the Master Servicer, and nothing contained herein shall be deemed to limit or
modify such indemnification.
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Each Subservicer shall be (i) a depository institution the accounts of
which are insured by the FDIC or (ii) another entity that engages in the
business of originating, acquiring or servicing mortgage loans, and in either
case shall be authorized to transact business in those States in which (x) the
related Mortgaged Properties are situated and (y) qualification is required to
conduct a subservicing business operation. In addition, each Subservicer shall
obtain and preserve its qualifications 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 Securities or
any Mortgage Loan, and to perform or cause to be performed its duties under
the related Subservicing Agreement, which shall provide that the Subservicer's
rights will automatically terminate upon the termination, resignation or other
removal of the Master Servicer under this Agreement. Each account used by any
Subservicer for the deposit of payments on any Mortgage Loan shall be an
Eligible Account.
(b) Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and a Subservicer or any references to actions taken through a
Subservicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Issuer and the Indenture Trustee 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 related Subservicer, and to the same extent and under the same terms
and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans.
As part of its servicing activities hereunder, the Master Servicer, for
the benefit of the Issuer and the Indenture Trustee, shall use reasonable
efforts to enforce the obligations of each Subservicer under the related
Subservicing Agreement to the extent that the non-performance of any such
obligation would have a material adverse effect on any Mortgage Loan. Such
enforcement, including the legal prosecution of claims, termination of
Subservicing Agreements and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the
Master Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Master Servicer shall pay the
costs of such enforcement at its own expense, and shall be reimbursed therefor
only from (i) a general recovery resulting from such enforcement to the
extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loan or (ii) a specific recovery of costs, expenses or
attorneys' fees against the Person against whom such enforcement is directed.
In the event the Master Servicer shall for any reason no longer be the
Master Servicer, the Indenture Trustee or its designee may (i) assume all of
the rights and obligations of the Master Servicer under each Subservicing
Agreement that the Master Servicer may have entered into, which assumption
shall not violate the terms of the related Subservicing Agreement, (ii)
notwithstanding anything to the contrary contained in each such Subservicing
Agreement, terminate the related Subservicer without being required to pay any
fee in connection therewith or (iii) assume the terminated Master Servicer's
rights and obligations under such subservicing arrangements, which termination
or assumption shall not violate the terms of the related Subservicing
Agreement.
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(c) With respect to each Payment Date, on the [twenty-first (21st)]
calendar day of each month (or if such day is not a Business Day, the
following Business Day), the Master Servicer shall furnish a statement to the
Indenture Trustee, in writing or in an electronic format as the Indenture
Trustee shall reasonably request, setting forth all information reasonably
necessary to allow the Indenture Trustee to make the distributions
contemplated by Section 3.05 of the Indenture and to deliver the statement
required to be delivered pursuant to Section 3.25 of the Indenture and Section
4.01 hereof.
Section 3.03. Collection of Mortgage Loan Payments. The Master Servicer
shall use commercially best efforts to collect all payments called for under
the terms and provisions of the Mortgage Documents and shall, to the extent
such procedures shall be consistent with this Agreement, follow such
collection procedures as shall constitute the Master Servicer's collection
procedures for mortgage loans serviced by it for its own account. Consistent
with the foregoing, and without limiting the generality of the foregoing, the
Master Servicer may in its discretion (i) waive any late payment charge,
overlimit fee, prepayment penalty or other fees that may be collected in the
ordinary course of servicing a Mortgage Loan; (ii) arrange with a Mortgagor a
schedule for the payment of principal and interest due and unpaid; provided,
that such arrangement is consistent with the Master Servicer's policies with
respect to mortgage loans; and provided further, that notwithstanding such
arrangement, such Mortgage Loans shall be included in the information
regarding delinquent Mortgage Loans set forth in the Loan Level Data Report,
but shall not be separately identified as being subject to a payment
arrangement. The Master Servicer may also extend the due date for payment due
on a Mortgage Loan in accordance with its normal servicing practices;
provided, that the Master Servicer shall first determine that any such waiver
or extension will not materially adversely affect the Lien of the related
Mortgage Documents or the interests of the Issuer or the Indenture Trustee and
with respect to any Mortgage Loan, the due date for any payment due under any
Mortgage Loan may not be extended beyond the maturity date of the Mortgage
Loan with the latest maturity date as of the Cut-Off Date. With respect to any
Mortgage Loan that is 180 days or more delinquent, the Master Servicer will
treat such loan as a Liquidated Mortgage Loan. Notwithstanding such treatment,
the Master Servicer will continue to make reasonable efforts to collect all
payments due on any such delinquent Mortgage Loan. Consistent with the terms
of this Agreement, the Master Servicer may waive, modify or vary any term of
any Mortgage Loan, subject, if applicable, to the second paragraph of Section
3.01(b). Notwithstanding the foregoing, in the ordinary course of its
business, the Master Servicer, including through its affiliates, may offer
mortgage products via promotions or solicitations as well as respond to
unsolicited requests for refinancing from Mortgagors on the Mortgage Loans.
The Master Servicer may also waive any prepayment penalties with respect to
any refinancing of a Mortgage Loan in accordance with its normal servicing
practices.
Consistent with the terms of this Agreement, the Master Servicer may
consent to the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor; provided, that in the Master
Servicer's determination, such waiver, modification, postponement or
indulgence relates to a reasonable business purpose; and provided further,
that such waiver, modification, postponement or indulgence shall not
materially and adversely affect the interests of the Securityholders. In
addition, and without limitation, if a HELOC is in default or, in the judgment
of the Master Servicer, such default is reasonably foreseeable, the Master
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Servicer may, through modification or otherwise, convert such HELOC to a fully
amortizing HEL.
Section 3.04. Permitted Withdrawals from the Collection Account. The
Master Servicer is hereby authorized from time to time to make withdrawals
from the Collection Account for the following purposes:
(a) on each Master Servicer Remittance Date, to deposit the amount
required by Section 5.03 hereof for the related Payment Date into the Trustee
Collection Account;
(b) on each Master Servicer Remittance Date prior to the end of the
Managed Amortization Period for Group II, Principal Collections with respect
to Mortgage Loans assigned to Group II shall be applied toward the purchase
from Seller of Additional Balances to be assigned to Group II; provided, that
the aggregate amount so paid to Seller in respect of Additional Balances at
any time during any related Collection Period shall not exceed the amount of
Principal Collections for Mortgage Loans assigned to Group II received during
such Collection Period;
(c) to the extent deposited into the Collection Account, to reimburse
itself or the related Subservicer for previously unreimbursed expenses
incurred in maintaining insurance policies pursuant to Section 3.05, for
Liquidation Expenses paid pursuant to Section 3.08 or for expenses otherwise
reimbursable pursuant to the terms of this Agreement (including expenses
incurred in connection with a bankruptcy filing by a Mortgagor) to the extent
not payable pursuant to Section 3.08 (other than expenses incurred by the
Master Servicer pursuant to Sections 6.03, 6.06 and 6.07 of this Agreement);
such withdrawal right being limited to amounts received in respect of the
Mortgage Loans, other than any Repurchase Price in respect thereof, that
represent late recoveries of the payments for which such advances were made,
or from Liquidation Proceeds or the proceeds of the purchase of such Mortgage
Loans;
(d) to pay to itself out of each payment received in respect of interest
on a Mortgage Loan as contemplated by clause (b) of the last paragraph of
Section 3.08, an amount equal to the Servicing Fee, to the extent not retained
pursuant to Section 5.02;
(e) to pay to Seller or the Depositor, as applicable, with respect to any
Mortgage Loan or Mortgaged Property that has been purchased or otherwise
transferred to Seller or the Depositor, all amounts received thereon that are
not required to be distributed to the Securityholders as of the date on which
the related Purchase Price or Repurchase Price is determined; and
(f) to withdraw any other amount deposited into the Collection Account
that was not required to be deposited therein pursuant to Section 5.02.
On each Master Servicer Remittance Date, the Master Servicer shall
transfer from the Collection Account to the Trustee Collection Account the
amount necessary for the Indenture Trustee to make the required distributions
pursuant to Section 3.05 of the Indenture. The Master Servicer shall keep and
maintain separate accounting on a loan-by-loan basis for the purpose of
justifying any withdrawal from the Collection Account pursuant to the
foregoing paragraphs. Notwithstanding any other provision of this Agreement,
the Master Servicer shall be entitled to
22
reimburse itself for any previously unreimbursed expenses relating to a
Mortgage Loan incurred pursuant to Section 3.08 or otherwise reimbursable
pursuant to the terms of this Agreement that the Master Servicer determines to
be otherwise nonrecoverable, except with respect to any Mortgage Loan as to
which the Purchase Price or Repurchase Price shall have been paid, by
withdrawal from the Collection Account, on any Business Day prior to the
Payment Date succeeding the date of such determination, of amounts on deposit
therein attributable to the Mortgage Loan.
Section 3.05. Maintenance of Insurance.
(a) With respect to each Mortgage Loan, the Master Servicer shall
maintain accurate records reflecting the fire and casualty insurance coverage
maintained by the related Mortgagors with respect to the Mortgaged Properties
in accordance with its normal servicing practices. The Master Servicer may, if
it has received notice of a default or deficiency in respect of the payment of
any ground rents, taxes, assessments, water rates or casualty insurance
premiums or other charges that are or may become a Lien upon the related
Mortgaged Property, notify the related Mortgagor and the holder of the first
Lien on the related Mortgaged Property.
(b) To the extent permitted under the related Mortgage Documents, and to
the extent the Master Servicer receives notice that a hazard insurance policy
has been cancelled, the Master Servicer shall, to the extent consistent with
its normal servicing practices, cause to be maintained for each Mortgage Loan
hazard insurance naming the Master Servicer or the related Subservicer as loss
payee thereunder, and providing extended coverage in an amount at least equal
to the lesser of (i) the maximum insurable value of the improvements securing
such Mortgage Loan from time to time or (ii) the principal balance owing on
such Mortgage Loan from time to time. The Master Servicer shall monitor the
maintenance of any such hazard insurance so obtained in accordance with its
normal servicing practices.
(c) The Master Servicer shall cause to be maintained with respect to any
REO Property fire insurance with extended coverage in an amount at least equal
to the lesser of (i) the full insurable value of the improvements that are a
part of such property and (ii) the Principal Balance owing on the related
Mortgage Loan at the time of such foreclosure or deed in lieu of foreclosure.
Such insurance may be maintained in the form of one or more blanket insurance
policies. Amounts collected by the Master Servicer under any such policies,
other than amounts to be applied to the restoration or repair of Mortgaged
Property or REO Property or amounts released to the Mortgagor in accordance
with the Master Servicer's normal servicing practices, shall be deposited into
the Collection Account to the extent provided in Section 5.02.
(d) If, upon the origination of a Mortgage Loan, the related Mortgaged
Property was in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, and flood
insurance has been made available, the Master Servicer shall cause to be
maintained, to the extent required by the related Mortgage Documents, a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration with a generally acceptable insurance
carrier, in an amount representing coverage at least equal to the lesser of
(i) the unpaid Principal Balance of such Mortgage Loan, (ii) the full
insurable value of such Mortgaged Property or (iii) the maximum amount of
insurance available under the Flood Disaster Protection Act of 1973, as
amended. With respect to any REO Property
23
identified as being in a flood zone at origination, the Master Servicer shall
also maintain, if applicable, flood insurance in an amount at least equal to
the lesser of (i) the maximum insurable value of the improvements that are a
part of such property and (ii) the Principal Balance owing on the related
Mortgage Loan at the time of foreclosure or grant of deed in lieu of
foreclosure plus accrued interest and related Liquidation Expenses.
(e) Pursuant to Section 3.03, any amounts collected by the Master
Servicer under any insurance policy maintained pursuant to this Section, other
than amounts to be applied to the restoration or repair of Mortgaged Property
or released to a Mortgagor in accordance with the Master Servicer's normal
servicing practices, shall be deposited into the Collection Account, subject
to withdrawal pursuant to Section 3.04. Any cost incurred by the Master
Servicer in maintaining any such insurance shall be added to the amount owing
under the related Mortgage Loan where the terms of the related Mortgage
Documents so permit; provided, that the addition of any such cost shall not be
taken into account for purposes of calculating the Principal Balance of such
Mortgage Loan or distributions to be made to Securityholders. Such costs shall
be recoverable by the Master Servicer pursuant to Section 3.04.
(f) The Master Servicer shall be under no obligation to maintain or
require any Mortgagor to maintain earthquake, title or other additional
insurance, and shall be under no obligation itself to maintain any such
additional insurance on property acquired in respect of any Mortgage Loan,
other than pursuant to such applicable laws and regulations as shall at any
time be in force and as shall require such additional insurance.
Section 3.06. Fidelity Bond; Errors and Omissions Policy.
(a) The Master Servicer shall maintain with a responsible company, and at
its own expense, a banker's blanket fidelity bond (a "Fidelity Bond") and a
mortgage errors and omissions insurance policy (an "Errors and Omissions
Policy"), in amounts as required by ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and as are
commercially available and at costs that are not generally regarded as
excessive by industry standards. Any fidelity bond shall protect against the
dishonest acts of officers and employees. Any such Fidelity Bond or Errors and
Omissions Policy shall not be canceled or modified by the Master Servicer in a
manner materially adverse to the Securityholders without the prior written
consent of the Issuer and the Indenture Trustee.
(b) The Master Servicer shall be deemed to have complied with this
provision if any of its Affiliates has such a Fidelity Bond and Errors and
Omissions Policy and, by the terms of such policy, the coverage afforded
thereunder extends to the Master Servicer. The Master Servicer shall cause
each Subservicer to maintain an Errors and Omissions Policy and a Fidelity
Bond meeting the requirements of this Section.
Section 3.07. Enforcement of Due-on-Sale Clauses; Assumption Agreements.
In any case in which a Mortgaged Property is about to be conveyed by the
related Mortgagor, whether by absolute conveyance, contract of sale or
otherwise, and whether or not such Mortgagor remains liable thereon, and the
Master Servicer has knowledge of such prospective conveyance, the Master
Servicer shall enforce any due-on-sale provision contained in such Mortgage
Documents to the extent permitted by such Mortgage Documents, unless such
provision in the reasonable judgment of the Master Servicer is not exercisable
under applicable law,
24
governmental regulations or in the Master Servicer's reasonable judgment that
it would be in the best financial interests of the Trust, in which case the
Master Servicer may enter into an assumption and modification agreement or a
substitution of liability agreement with such Mortgagor.
The Master Servicer or the related Subservicer, as the case may be, shall
be entitled to (i) execute assumption agreements, substitution agreements and
instruments of satisfaction or cancellation or of partial or full release or
discharge, or any other document contemplated by this Agreement or other
comparable instruments with respect to the Mortgage Loans and the related
Mortgaged Properties; and the Issuer and the Indenture Trustee each shall
promptly execute any such documents upon the request of the Master Servicer,
and (ii) approve the granting of an easement on Mortgaged Property in favor of
another Person, any alteration or demolition of such Mortgaged Property or
other similar matters, if it has determined, exercising its good faith
business judgment in the same manner as it would if it were the owner of the
related Mortgage Loan, that the security for, and the timely and full
collection of, such Mortgage Loan would not be adversely affected thereby. The
Master Servicer shall notify the Indenture Trustee that any such assumption or
substitution agreement has been completed by forwarding to the Indenture
Trustee the original copy of such assumption or substitution agreement, which
the Indenture Trustee shall add to the related Mortgage File and which shall,
for all purposes, be considered part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof. The Master
Servicer shall retain as servicing compensation any fee collected by the
Master Servicer for entering into an assumption or substitution of liability
agreement. A partial release pursuant to this Section shall be permitted only
if the Combined Loan-to-Value Ratio for the related Mortgage Loan after such
partial release does not exceed the Combined Loan-to-Value Ratio for such
Mortgage Loan as of the related Cut-Off Date.
Notwithstanding the provisions of this Section or any other provision of
this Agreement, the Master Servicer shall not be deemed to be in default,
breach or violation of any of its obligations hereunder by reason of any
conveyance by a Mortgagor of the related Mortgaged Property or any assumption
of a Mortgage Loan by operation of law with respect to which the Master
Servicer determines in good faith that it may be restricted by law from
preventing, for any reason whatsoever, or if the exercise of such right would
impair or threaten to impair any recovery under any applicable insurance
policy or, in the Master Servicer's judgment, would be reasonably likely to
result in legal action by such Mortgagor.
Section 3.08. Realization upon Defaulted Mortgage Loans. With respect to
each Mortgage Loan that comes into and continues in default, the Master
Servicer shall exercise its reasonable judgment to determine whether to (a)
foreclose on the related Mortgaged Property, (b) write off the unpaid
Principal Balance thereof as bad debt, (c) take a deed in lieu of foreclosure,
(d) accept a short sale, (e) arrange for a repayment plan, (f) agree to a
modification thereof in accordance with this Agreement, (g) ▇▇▇ on the
underlying promissory note, (h) sell the Mortgage Loan as a nonperforming
asset to a third party not an Affiliate of the Master Servicer or Depositor or
(i) take an unsecured note, in each case subject to the rights of any related
senior lienholder, provided, however, that the Master Servicer may sell the
Mortgage Loan or take an unsecured note pursuant to clauses (h) and (i),
respectively, only if the Mortgage Loan has been charged off or constitutes a
Liquidated Mortgage Loan. The Master Servicer shall in no event expend funds
in connection with any foreclosure or attempted foreclosure that is not
25
completed or towards the correction of any default on a related senior
mortgage loan or restoration of any property if it shall determine that such
expenditure would not increase the related Liquidation Proceeds. In the event
of a determination by the Master Servicer that any such expenditure previously
made pursuant to this Section will not be reimbursable from Liquidation
Proceeds, the Master Servicer shall be entitled to reimbursement of its funds
so expended pursuant to Section 3.04(c).
Notwithstanding the foregoing provisions of this Subsection 3.08, with
respect to any Mortgage Loan as to which the Master Servicer has received
actual notice of, or has actual knowledge of, the presence of any toxic or
hazardous substance on the related Mortgaged Property, the Master Servicer
shall not either (i) obtain title to such Mortgaged Property as a result of or
in lieu of foreclosure or otherwise, or (ii) otherwise acquire possession of,
or take any other action, with respect to, such Mortgaged Property if, as a
result of any such action, the Trust would be considered to hold title to, to
be a mortgagee-in-possession of, or to be an owner or operator of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to
time, or any comparable law, unless the Master Servicer has previously
determined, based on its reasonable judgment and a prudent report prepared by
a Person who regularly conducts environmental audits using customary industry
standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic interest
of the Trust to take such actions as are necessary to bring the Mortgaged
Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any federal, state or local law or regulation, or that if
any such materials are present for which such action could be required, that
it would be in the best economic interest of the Trust to take such actions
with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Subsection 3.08 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account
as provided in Section 3.04(c).
If the Master Servicer determines that it is in the best economic
interest of the Trust to take such actions as are necessary to bring any such
Mortgaged Property into compliance with applicable environmental laws, or to
take such action with respect to the containment, clean-up or remediation of
hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials affecting any such Mortgaged Property, then the
Master Servicer shall take such action as it deems to be in the best economic
interest of the Trust. The cost of any such compliance, containment, cleanup
or remediation shall be advanced by the Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.04(c).
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Notwithstanding any other provision of this Agreement, a defaulted
Mortgage Loan may be deemed to be finally liquidated if substantially all
amounts expected by the Master Servicer to be received in connection therewith
have been received; provided, that any subsequent collections with respect to
any such Mortgage Loan shall be deposited into the Collection Account. For
purposes of determining the amount of any Liquidation Proceeds or Insurance
Proceeds, or other unscheduled collections, the Master Servicer may take into
account amounts of additional receipts it expects to receive or any estimated
additional Liquidation Expenses it expects to incur in connection with such
Mortgage Loan.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Master Servicer, which shall hold the same on behalf of
the Issuer. Notwithstanding any such acquisition of title and cancellation of
the related Mortgage Loan, such Mortgaged Property shall, except as otherwise
expressly provided herein, be considered to be an outstanding Mortgage Loan
held as part of the Trust Estate until such time as such Mortgaged Property
shall be sold. Consistent with the foregoing, for purposes of all calculations
hereunder, so long as such Mortgaged Property shall be considered to be an
outstanding Mortgage Loan, it shall be assumed that, notwithstanding that the
indebtedness evidenced by the related Mortgage Documents shall have been
discharged, such Mortgage Documents in effect at the time of any such
acquisition of title before any adjustment thereto by reason of any bankruptcy
or similar Proceeding or any moratorium or similar waiver or grace period will
remain in effect.
Any proceeds from foreclosure Proceedings or the purchase or repurchase
of any Mortgage Loan pursuant to the terms of this Agreement and any recovery
resulting from a collection of Liquidation Proceeds or Insurance Proceeds,
shall be applied in the following order of priority: (a) to reimburse the
Master Servicer or the related Subservicer in accordance with this Section;
(b) to pay to the Master Servicer or the related Subservicer all Servicing
Fees payable therefrom (without duplication for any proceeds applied pursuant
to clause (a)); (c) as accrued and unpaid interest on such Mortgage Loan at
the related Mortgage Interest Rate to the Payment Date in respect of which
such amounts are to be deposited into the Trustee Collection Account; and (d)
as a recovery of principal on such Mortgage Loan.
Section 3.09. Indenture Trustee to Cooperate; Release of Mortgage Files;
Trust Estates; Related Documents.
(a) On or before each Payment Date, the Master Servicer shall notify the
Indenture Trustee or the Custodian (with a copy to the Issuer) of the
termination or payment in full of any Mortgage Loan during the preceding
Collection Period. Upon receipt of payment in full, the Master Servicer shall
be authorized to execute, pursuant to the authorization contained in the first
paragraph of Section 3.01(b), if the Assignments of Mortgage have been
recorded if required pursuant hereto or pursuant to the Mortgage Loan Purchase
and Servicing Agreement, an instrument of satisfaction regarding the related
Mortgage Documents, which instrument of satisfaction shall be recorded by the
Master Servicer if required by applicable law, and shall be delivered to the
Person entitled thereto. Any expenses incurred in connection with such
instrument of satisfaction or transfer shall be reimbursable from amounts on
deposit in the Collection Account. From time to time and as appropriate for
the servicing or foreclosure of any Mortgage Loan, the Indenture Trustee or
the Custodian shall, upon request of the Master
27
Servicer and delivery to the Indenture Trustee or the Custodian (with a copy
to the Issuer) of two copies of a Request for Release in the form of Exhibit D
hereto, which shall be signed by a Servicing Officer or be in a mutually
agreeable electronic format that, in lieu of being manually signed by a
Servicing Officer, emanate from a Servicing Officer, release or cause to be
released the related Mortgage File to the Master Servicer, and the Issuer and
the Indenture Trustee shall promptly execute such documents, in the forms
provided by the Master Servicer, as shall be necessary for the prosecution of
any such Proceedings or the taking of other servicing actions. The Request for
Release shall obligate the Master Servicer to return such Mortgage File to the
Indenture Trustee or the Custodian (as specified therein) when the need
therefor by the Master Servicer no longer exists, unless such Mortgage Loan
shall have been liquidated.
If an Assignment of Mortgage has been recorded, in order to facilitate
the foreclosure of the Mortgaged Property securing a Mortgage Loan that is in
default following such recordation, the Indenture Trustee or the Issuer shall,
if so requested in writing by the Master Servicer, promptly execute an
appropriate assignment in the form provided by the Master Servicer to assign
such Mortgage Loan for the purpose of collection to the Master Servicer, and
any such assignment shall unambiguously indicate that such assignment is for
the purpose of collection only. Upon such assignment, the Master Servicer, as
assignee for collection, will thereupon bring all required actions in its own
name and otherwise enforce the terms of such Mortgage Loan and deposit into or
credit to the Collection Account any Liquidation Proceeds received with
respect thereto. In the event that all delinquent payments due under any such
Mortgage Loan are paid by the related Mortgagor and any other defaults are
cured, then the Master Servicer, as assignee for collection, shall promptly
reassign such Mortgage Loan to the Indenture Trustee and return all Mortgage
Documents and Related Documents to the place where the related Mortgage File
was being maintained.
The Indenture Trustee, as pledgee of the Mortgage Loans and as assignee
of record of the Mortgage Loans on behalf of the Issuer pursuant to Section
3.13 of the Indenture, shall, on behalf of the Issuer, take all such actions
on behalf of the Issuer and promptly execute and return all instruments
reasonably required by the Master Servicer in connection therewith; provided,
that if the Master Servicer requests a signature of the Indenture Trustee on
behalf of the Issuer, the Master Servicer shall deliver to the Indenture
Trustee an Officer's Certificate stating that such signature is necessary or
appropriate to enable the Master Servicer to carry out its servicing and
administrative duties under this Agreement.
(b) Where the Issuer or the Indenture Trustee is required by this
Agreement to execute instruments to release property from the terms of the
Trust Agreement or the Indenture, as applicable, or convey the Issuer's or the
Indenture Trustee's interests in the same, the Issuer or the Indenture
Trustee, as applicable, shall do so in a manner and under circumstances that
are not inconsistent with the provisions of this Agreement. No Person relying
upon any instrument executed by the Issuer or the Indenture Trustee shall be
bound to ascertain the Issuer's or the Indenture Trustee's authority in
connection therewith, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.
(c) If from time to time the Master Servicer shall deliver to the
Custodian copies of any written assurance, assumption agreement or
substitution agreement or other similar agreement pursuant to Section 3.07,
the Custodian shall check that each of such documents
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purports to be an original executed copy or, if the original executed copy has
been submitted for recordation and has not yet been returned, a copy of the
original executed document; and if so, shall file such documents, and upon
receipt of the original executed copy from the applicable recording office or
receipt of a copy thereof certified by the applicable recording office, shall
file such originals or certified copies in the related Mortgage File. If any
such documents submitted by the Master Servicer shall not meet the above
qualifications, then the Custodian shall promptly give the Master Servicer
written notice of such occurrence or return such documents to the Master
Servicer, with a direction to the Master Servicer to forward the correct
documentation.
(d) Upon receipt of two copies of a Request for Release from the Master
Servicer, substantially in the form of Exhibit D hereto, to the effect that a
Mortgage Loan has been the subject of a final payment or a prepayment in full
and has been terminated or that substantially all Liquidation Proceeds
determined by the Master Servicer in its reasonable judgment to be finally
recoverable have been recovered, and upon deposit into the Collection Account
of such final payment, prepayment in full or Liquidation Proceeds, the
Custodian shall promptly release the related Mortgage File to the Master
Servicer, and the Indenture Trustee shall execute the same, along with such
documents as the Master Servicer or the related Mortgagor may request to
evidence satisfaction and discharge of such Mortgage Loan. To the extent that
(i) a Mortgage Loan has been the subject of a final payment or a prepayment in
full or substantially all Liquidation Proceeds determined by the Master
Servicer in its reasonable judgment to be finally recoverable have been
recovered, and a deposit into the Collection Account of such final payment,
prepayment in full or Liquidation Proceeds has been made, and (ii) the
Custodian and the Indenture Trustee have not received a Request for Release
from the Master Servicer within a reasonable period of time following the
occurrence of the events described in clause (i), the Indenture Trustee may
prepare and deliver to the Custodian a Request for Release in duplicate
whereupon the Custodian shall promptly release the related Mortgage File to
the Master Servicer in the manner described in the preceding sentence.
Section 3.10. Servicing Fee; Payment of Certain Expenses by Master
Servicer. The Master Servicer shall be entitled to receive the Servicing Fee
in accordance with Section 3.04(d) as compensation for its services in
connection with servicing the Mortgage Loans. Moreover, additional servicing
compensation in the form of late payment charges and other receipts not
required to be deposited into the Collection Account as specified in Section
5.02 may be retained by the Master Servicer. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder, including payment of all fees and expenses not expressly stated
hereunder to be for the account of the Securityholders, and shall not be
entitled to reimbursement therefor. The Issuer shall pay the initial fees and
expenses of the Indenture Trustee from the proceeds of the Notes.
Section 3.11. Access to Certain Documentation and Information Regarding
the Mortgage Loans. Whenever required by statute or regulation, the Master
Servicer shall provide each Securityholder or any regulator therefor, the
Indenture Trustee with reasonable access to all documentation relating to the
Mortgage Loans, such access being afforded without charge but only upon
reasonable request and during normal business hours at the offices of the
Master Servicer or any Subservicer. Nothing in this Section shall limit the
obligation of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding
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Mortgagors, and the failure of the Master Servicer to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section.
Section 3.12. [Reserved.]
Section 3.13. Recordation of Assignments. (a) With respect to each MERS
Mortgage Loan, on or before the [10th] Business Day after the Closing Date,
the Master Servicer will cause MERS's records to reflect the Trust as owner of
such Mortgage Loans.
(b) In the case of any Non-MERS Mortgage Loan, the original assignment of
Mortgage, in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect the conveyance of
the Mortgage Loan to the Trustee or in blank, which may be in the form of one
or more "blanket" assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction, shall be recorded by the Master
Servicer, at the expense of Seller, upon the earlier to occur of (i) the
occurrence and continuation of any Event of Default or (ii) a bankruptcy or
insolvency proceeding involving the Mortgagor is initiated or foreclosure
proceedings are initiated against the Mortgaged Property as a consequence of
an event of default under the Mortgage Loan. While such assignment is being
recorded, the Custodian shall retain a photocopy thereof. If any assignment is
lost or returned unrecorded to the Custodian because of any defect therein,
the Master Servicer shall prepare at its expense a substitute assignment or
cure such defect, and the Master Servicer shall cause such assignment to be
recorded in accordance with this Section.
Section 3.14. Annual Statement as to Compliance. The Master Servicer
shall deliver to the Issuer, the Indenture Trustee and each Rating Agency not
later than March 10 of each year, commencing in 200__, an Officer's
Certificate stating as to each signer thereof that (i) a review of the
activities of the Master Servicer during the preceding calendar year and of
its performance under this Agreement has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, based on such
review, the Master Servicer has fulfilled all of its obligations under this
Agreement throughout such year, or if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. The statement required pursuant to
Section 3.15 shall accompany such Officer's Certificate.
Section 3.15. Annual Independent Public Accountants' Servicing Report.
Not later than March 10 of each year, commencing in 200__, the Master Servicer
shall deliver or cause to be delivered to the Issuer and the Indenture Trustee
a report, prepared by the Independent Accountants of the Master Servicer,
stating that such Independent Accountants (i) have conducted an examination of
certain documents and records of the Master Servicer (or an appropriate
Affiliate thereof) relating to the servicing of the mortgage loans being
serviced by the Master Servicer under servicing agreements similar to this
Agreement (which agreements shall be described in a schedule to such report)
substantially as required by the Uniform Single Attestation Program for
Mortgage Bankers and (ii) did not discover any exceptions or errors relating
to the servicing activities of the Master Servicer (including the servicing of
Mortgage Loans subject to this Agreement) that, in the opinion of such
Independent Accountants, are material, except for such exceptions as shall be
set forth in such report. In the event such firm requires the Indenture
Trustee to agree to the procedures performed by such firm, the Master
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Servicer shall direct the Indenture Trustee in writing to so agree; it being
understood and agreed that the Indenture Trustee shall deliver such letter of
agreement in conclusive reliance upon the direction of the Master Servicer,
and the Indenture Trustee need not make any independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.
Section 3.16. ▇▇▇▇▇▇▇▇-▇▇▇▇▇. On or before March 10 of each year, the
Administrator shall deliver to the Master Servicer all filings it made (or
will make) for the Trust with the Commission with respect to the prior
calendar year. In addition, on or prior to the tenth day after a Form 8-K is
filed, the Administrator shall deliver a copy of it to the Master Servicer. On
or before March 10 of each year, the Administrator shall furnish to the Master
Servicer a certification with respect to any and all tasks performed by it and
covered by the certification to be provided by the Master Servicer in the form
of Exhibit G to this Agreement. On or before March 25 (or the previous
Business Day if March 25 is not a Business Day) of each calendar year with
respect to which a Form 10-K is required to be filed by the Trust, the Master
Servicer shall deliver to the Administrator a certification in the form of
Exhibit G to this Agreement.
Section 3.17. Indemnification; Third-Party Claims. The Master Servicer
(solely for the purpose of this Section, the "Indemnifying Party") agrees to
indemnify and to hold each of the Depositor, the Issuer, the Owner Trustee and
the Indenture Trustee (solely for the purpose of this Section, the
"Indemnified Parties") harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses that the Indemnified Parties may sustain in any way
related to the failure of the Indemnifying Party to perform its respective
duties in compliance with the terms of this Agreement. Each Indemnified Party
and the Master Servicer shall immediately notify the other Indemnified Parties
if a claim is made by a third party with respect to this Agreement, and the
Master Servicer shall assume the defense of such claim and pay all expenses in
connection therewith, including reasonable outside counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered into
against the Indemnified Parties in respect of such claim. The Indenture
Trustee, shall, out of the assets of the Trust Estate reimburse the Master
Servicer in accordance with Section 3.04(c) hereof for all amounts advanced by
it pursuant to the preceding sentence except where the claim relates directly
to the failure of the Master Servicer to service and administer the Mortgage
Loans in compliance with the terms of this Agreement; provided, however, that
the Master Servicer's indemnity hereunder shall not in any manner be
conditioned on the availability of funds for such reimbursement. If the Master
Servicer is unable to pay any such amounts owed to the Indenture Trustee, such
amounts shall be paid to the Indenture Trustee out of the Trust Estate
pursuant to Section 3.05(a) of the Indenture. Solely to the extent that the
Holders of the Certificate fail to indemnify the Owner Trustee as required by
Section 7.02 of the Trust Agreement, the Master Servicer shall undertake such
indemnification in accordance with the terms of Section 7.02 of the Trust
Agreement.
Section 3.18. Maintenance of Existence and Licenses; Merger or
Consolidation of the Master Servicer. The Master Servicer (or an appropriate
Affiliate thereof) shall keep in full force and effect its existence, rights
and franchises, shall obtain and preserve its qualification to do business in
each jurisdiction necessary to protect the validity and enforceability of this
Agreement or any Mortgage Loan and to perform its duties hereunder, and shall
otherwise
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operate its business so as to cause the representations and warranties under
Section 2.04 to be true and correct at all times.
Section 3.19. Excluded Amounts. Each of (1) the portion of the principal
balance of any HELOC attributable to Draws made subsequent to the end of the
Managed Amortization Period and (2) the portion of the principal balance of
any HELOC attributable to Draws for which the Variable Funding Note could not
be increased to compensate Seller for the Draws (each, an "Excluded Amount")
shall not be transferred to the Trust, and the portion of the Principal
Collections and Interest Collections on such HELOC for each Collection Period
shall be allocated to the Excluded Amount pro rata between the Excluded Amount
and the Principal Balance of such HELOC in proportion to the respective
amounts outstanding as of the end of the calendar month preceding such
Collection Period.
ARTICLE IV
REPORT TO NOTEHOLDERS
Section 4.01. Report to Noteholders. With respect to each Payment Date,
no later than the fifteenth (15th) calendar day of each month (or if such day
is not a Business Day, the following Business Day), the Master Servicer shall
forward the Loan Level Data Report to the Depositor and the Indenture Trustee.
Based primarily on the information in the Loan Level Data Report, the
Indenture Trustee shall prepare the Report to Noteholders with respect to each
Payment Date. The Indenture Trustee, pursuant to Section 3.25 of the
Indenture, shall make available to each Securityholder, the Owner Trustee,
each Paying Agent (if other than the Indenture Trustee) and each Rating
Agency, the Report to Noteholders setting forth the following information, to
the extent applicable:
(a) the aggregate amount of Collections received on the Mortgage Loans
during the related Collection Period;
(b) the aggregate amount of (i) Interest Collections and (ii) Principal
Collections and, in the case of the Managed Amortization Period, Net Principal
Collections (in each case stated separately for each Group, for each
collateral type (i.e., HEL, HLTV and HELOC) and in the aggregate) for such
Collection Period;
(c) the Principal Collection Distribution Amount for such Collection
Period;
(d) the amount distributable to each Class of Offered Notes and the
Variable Funding Notes in respect of interest;
(e) the amount of any Interest Carry-Forward Amounts;
(f) the amount, if any, to be distributed to the Certificateholders;
(g) any accrued and unpaid Servicing Fees for previous Collection Periods
and the Servicing Fee for such Collection Period;
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(h) the Excess Spread, if any, for such Collection Period (stated
separately for each Group);
(i) the Liquidation Loss Amount and Principal Balance of Liquidated
Mortgage Loans (in each case stated separately for each Group, for each
collateral type and also in the aggregate) for (i) such Collection Period,
(ii) such Collection Period and the immediately preceding eleven Collection
Periods and (iii) such Collection Period and all previous Collection Periods
and any Overcollateralization Increase Amounts and Overcollateralization
Release Amounts for such Collection Period;
(j) the aggregate Principal Balance of the Mortgage Loans (in each case
stated separately for each Group, for each collateral type and also in the
aggregate) as of the end of the preceding Collection Period and as of the end
of the second preceding Collection Period;
(k) the Offered Note Balance and the Variable Funding Balance for each
Class of Notes after giving effect to any distribution on such Payment Date
and to any reduction on account of Liquidation Loss Amounts;
(l) the Overcollateralization Amount and the Overcollateralization Target
Amount and whether the Loss and Delinquency Test has not been satisfied;
(m) the number and aggregate Principal Balances of Mortgage Loans (in
each case stated separately for each Group, for each collateral type and also
in the aggregate) (i) as to which the related Monthly Payment is delinquent
for 30-59 days, 60-89 days, 90-119 days, 120-149 days, 150-179 days and 180
days or more, separately identifying for each bucket those Mortgage Loans in
foreclosure, those Mortgage Loans subject to bankruptcy proceedings, those
Mortgage Loans that have become related to REO Property and the remaining
("purely delinquent") Mortgage Loans. Notwithstanding the foregoing, any
Mortgage Loan as to which the related Monthly Payment is delinquent for 180
days or more and which is treated as a Liquidated Mortgage Loan for Trust
reporting purposes shall not be double-counted as a delinquent Mortgage Loan.
(n) prior to the end of the Managed Amortization Period, the aggregate
amount of Additional Balances, if any, (i) created and (ii) purchased during
the preceding Collection Period;
(o) whether an Amortization Event, specifying such event, has occurred
since the prior Determination Date;
(p) whether a Servicing Default has occurred since the prior
Determination Date, specifying such Servicing Default;
(q) the Net Loan Rate for the related Collection Period; and
(r) the number, Group, collateral type and Principal Balances of any
Mortgage Loans removed from the Trust.
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The Indenture Trustee shall conclusively rely upon the information
contained in each Loan Level Data Report for purposes of making distributions
pursuant to Section 3.05 of the Indenture, shall have no duty to inquire into
such information and shall have no liability in so relying. The format and
content of the Loan Level Data Report and the Report to Noteholders may be
modified by the mutual agreement of the Master Servicer and the Indenture
Trustee. The Administrator shall give notice of any such change to each Rating
Agency.
The amounts furnished pursuant to clause (d) above shall be expressed as
an aggregate dollar amount per each Class of Offered Notes or Variable Funding
Notes, as the case may be, with a $1,000 denomination.
The Master Servicer shall forward to the Indenture Trustee any other
information reasonably requested by the Indenture Trustee to make
distributions pursuant to Section 3.05 of the Indenture. Prior to the close of
business on the Business Day next succeeding each Determination Date, the
Master Servicer shall furnish a written statement to the Paying Agent and the
Indenture Trustee setting forth the aggregate amounts required to be withdrawn
from the Collection Account. The determination by the Master Servicer of such
amounts shall be presumptively deemed to be correct for all purposes
hereunder, and the Owner Trustee and the Indenture Trustee shall be protected
in relying upon the same without any independent verification thereof. In
addition, upon the Issuer's written request, the Master Servicer shall
promptly furnish information reasonably requested by the Issuer that is
reasonably available to the Master Servicer to enable the Issuer to perform
its federal and state income tax reporting obligations.
ARTICLE V
THE ACCOUNTS
Section 5.01. Accounts. Prior to the Closing Date, the Master Servicer
shall establish or cause to be established the following accounts, each of
which shall be an Eligible Account:
(a) an account (the "Collection Account") bearing a designation clearly
indicating that the funds on deposit therein are held for the benefit of the
Issuer, the Indenture Trustee and the Securityholders; and
(b) an account in the name of the Indenture Trustee (the "Trustee
Collection Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Securityholders.
Section 5.02. Collection Account. The Master Servicer shall deposit or
cause to be deposited any amounts representing payments and collections in
respect of the Mortgage Loans received by it subsequent to the Cut-Off Date,
other than in respect of the payments referred to in the following paragraph,
into the Collection Account within two (2) Business Days following receipt
thereof (or otherwise on or prior to the Closing Date), including the
following payments and collections received or made by it:
34
(a) all payments of principal and interest in respect of the Mortgage
Loans received by the Master Servicer from the Mortgagors or the related
Subservicer (net of any portion of the interest thereof retained by such
Subservicer as subservicing fees);
(b) the aggregate Purchase Price or Repurchase Price of any Mortgage
Loans purchased by Seller or the Depositor pursuant to Sections 2.03 or 2.08;
(c) any Liquidation Proceeds and Insurance Proceeds;
(d) any Substitution Adjustment Amounts; and
(e) from the Master Servicer, any losses incurred upon Permitted
Investments of amounts deposited into the Collection Account;
provided, however, that with respect to each Collection Period, the Master
Servicer shall be permitted to retain from payments in respect of interest on
the Mortgage Loans, the Servicing Fee for such Collection Period and any
prepayment penalties, late fees and other similar fees.
The foregoing requirements respecting deposits into the Collection
Account are exclusive; provided, that without limiting the generality of the
foregoing, the Master Servicer need not deposit into the Collection Account
any amounts representing prepayment penalties or other ancillary servicing
fees payable by Mortgagors during a Collection Period such as late fees,
assumption fees, other administrative fees, release fees or bad check charges.
In the event that any amount not required to be deposited into the Collection
Account is so deposited, the Master Servicer may at any time withdraw such
amount from the Collection Account, any provision herein to the contrary
notwithstanding. Notwithstanding such commingling of funds, the Master
Servicer shall keep records that accurately reflect the funds on deposit in
the Collection Account that have been identified by it as being attributable
to the Mortgage Loans and shall hold all collections in the Collection Account
to the extent they represent collections on the Mortgage Loans for the benefit
of the Issuer, the Indenture Trustee and the Securityholders.
The Master Servicer shall direct in writing the institution maintaining
the Collection Account to invest funds therein only in Permitted Investments.
No Permitted Investment may be sold or disposed of at a gain prior to
maturity, unless the Master Servicer shall have obtained an Opinion of Counsel
at the Master Servicer's expense addressed to the Indenture Trustee that such
sale or disposition will not cause the Trust to be to be treated as an
association (or a publicly-traded partnership) taxable as a corporation for
federal income tax purposes. All net income, other than any gain from a sale
or disposition of the type referred to in the preceding sentence, received
from any such Permitted Investment shall be paid to the Master Servicer as
additional servicing compensation. The amount of any losses incurred in
respect therewith shall be deposited into the Collection Account by the Master
Servicer out of its own funds immediately as incurred.
The Master Servicer shall require each Subservicer to hold all funds
constituting collections on the Mortgage Loans, pending remittance thereof to
the Master Servicer, in one or more accounts meeting the requirements of an
Eligible Account (and amounts on deposit therein shall be invested in
Permitted Investments), unless all such collections are remitted on a daily
basis to the Master Servicer for deposit into the Collection Account.
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The Collection Account may, upon written notice to the Issuer and the
Indenture Trustee, be transferred to a different institution, provided that
such transfer is to an Eligible Account.
On any Payment Date during the Managed Amortization Period with respect
to Mortgage Loans assigned to Group II, the Master Servicer shall withdraw
from the Collection Account and deliver to Seller, as payment for Additional
Balances, the lesser of (i) the aggregate amount of Additional Balances
created during the related Collection Period and (ii) Principal Collections
with respect to Mortgage Loans assigned to Group II.
Section 5.03. Trustee Collection Account. On each Master Servicer
Remittance Date, the Master Servicer shall transfer from the Collection
Account to the Trustee Collection Account the amount necessary for the
Indenture Trustee to make the required distributions pursuant to Section
3.05(a) of the Indenture. Such requirement respecting deposits into the
Trustee Collection Account is exclusive. In the event that any amount not
required to be deposited into the Trustee Collection Account is so deposited,
the Master Servicer may at any time direct the Indenture Trustee to withdraw
such amount from the Trustee Collection Account and deliver it to or at the
direction of Master Servicer, any provision herein to the contrary
notwithstanding.
The Indenture Trustee may, but need not, invest funds in the Trustee
Collection Account, and if such funds are invested, they shall be invested
only in Permitted Investments selected by the Indenture Trustee. No Permitted
Investment may be sold or disposed of at a gain prior to maturity, unless the
Indenture Trustee shall have obtained an Opinion of Counsel at the Indenture
Trustee's expense addressed to the Indenture Trustee that such sale or
disposition will not cause the Trust to be to be treated as an association (or
a publicly-traded partnership) taxable as a corporation for federal income tax
purposes. Except as otherwise agreed by the Indenture Trustee and the
Depositor in writing, all net income for the period from and including the
Master Servicer Remittance Date up to and excluding the day prior to the
related Payment Date shall be for the account of the Indenture Trustee and the
remainder of the net income on the funds in the Trustee Collection Account
shall be for the account of the Depositor. The amount of any losses incurred
in respect therewith shall be deposited into the Trustee Collection Account by
the Indenture Trustee and/or the Depositor out of their own funds immediately
as incurred.
On the Closing Date the Depositor shall remit to the Indenture Trustee
for deposit in the Trustee Collection Account, or a subaccount of the Trustee
Collection Account created by the Indenture Trustee, an amount equal to
approximately $[____] representing the excess of the aggregate principal
balance of the Mortgage Loans as of the statistical calculation date of
________ __, 200__ over the aggregate Principal Balance of the Mortgage Loans
as of the Cut-Off Date. The principal amount deposited shall be paid on the
first Payment Date as principal to the Holders of the Offered Notes entitled
to receive principal on such Payment Date. In addition, following the Closing
Date and prior to the first Payment Date, the Depositor may also remit funds
to the Indenture Trustee for deposit in the Trustee Collection Account, or a
subaccount of the Trustee Collection Account created by the Indenture Trustee,
if the Depositor and the Indenture Trustee determine that without such
remittance there would be a shortfall in the amount on deposit in the Trustee
Collection Account available to be applied towards the payment of interest due
on the Offered Notes on the initial Payment Date. All net income on such
deposits from the Closing Date up to and not including the first Payment Date
shall be for the account of the Depositor.
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ARTICLE VI
THE MASTER SERVICER
Section 6.01. Liability of the Master Servicer. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it hereunder.
Section 6.02. Merger or Consolidation or Assumption of the Obligations of
the Master Servicer. Any Person into which the Master Servicer may be merged
or consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be an established
mortgage loan servicing institution that has a net worth of at least
$15,000,000, and in all events shall be the successor of the Master Servicer,
without the execution or filing of any paper or any further action on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.
The Master Servicer shall send timely notice of any such merger or
consolidation to the Indenture Trustee.
The Master Servicer may assign its rights and delegate its duties and
obligations under this Agreement; provided, that the Person accepting such
assignment or delegation shall be a Person qualified to service the Mortgage
Loans, shall be satisfactory to the Issuer; and such person shall be willing
to service the Mortgage Loans and shall execute and deliver to the Indenture
Trustee and the Issuer an agreement, in form and substance reasonably
satisfactory to the Indenture Trustee and the Issuer, containing an assumption
by such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by the Master Servicer
under this Agreement; and provided further, that no Rating Agency, after
notice thereto, shall have notified the Indenture Trustee in writing that such
assignment and delegation would result in a Rating Event; and provided
further, that the Owner Trustee shall have received an Opinion of Counsel to
the effect that such assignment or delegation would not cause the Trust to be
treated as an association (or a publicly-traded partnership) taxable as a
corporation for federal income tax purposes.
Section 6.03. Limitation on Liability of the Master Servicer and Others.
Neither the Master Servicer nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer, the Owner Trustee, the
Indenture Trustee or the Securityholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement; provided, that this provision shall not protect the Master Servicer
or any such Person against any liability that would otherwise be imposed on it
by reason of its willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder or by reason of its reckless disregard
thereof. The Master Servicer and any director, officer, employee or agent
thereof 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 and any director, officer, employee or agent
thereof shall be indemnified by the Issuer and held harmless against any loss,
liability or expense incurred in connection with any Proceeding relating to
this Agreement or the Securities, including any amount paid to the Indenture
Trustee pursuant to Section 6.06(b), other than any loss, liability or expense
incurred by reason of its willful misfeasance, bad faith or gross negligence
in the performance of its duties hereunder or by reason of its reckless
disregard
37
thereof and shall be entitled to reimbursement therefor pursuant to Section
3.05(a)(xiii) of the Indenture. The Master Servicer shall be under no
obligation to appear in, prosecute or defend any legal action not incidental
to its duties to service the Mortgage Loans in accordance with this Agreement,
and that in its opinion may involve it in any expense or liability; provided,
that the Master Servicer may in its sole discretion undertake any action that
it may deem necessary or desirable in respect of this Agreement, the rights
and duties of the parties hereto and the interests of the Securityholders. In
such event, the reasonable legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Issuer, and the Master Servicer shall be entitled to reimbursement therefor
pursuant to Section 3.05(a)(xiii) of the Indenture. The Master Servicer's
right to indemnity or reimbursement pursuant to this Section shall survive any
resignation or termination of the Master Servicer pursuant to Section 6.04 or
Article VII in respect to any losses, expenses, costs or liabilities arising
prior to such resignation or termination or from events that occurred prior to
such resignation or termination.
Section 6.04. Master Servicer Not to Resign. Subject to the provisions of
Section 6.02, the Master Servicer shall not assign this Agreement or resign
from the obligations and duties hereby imposed upon it except (a) upon a
determination that the performance of its obligations or duties hereunder are
no longer permissible under applicable law or are in material conflict by
reason of applicable law with other activities carried on by it or any
Affiliate thereof, the other activities of the Master Servicer so causing such
a conflict being of a type and nature carried on by the Master Servicer or
such Affiliate at the date of this Agreement or (b) upon the satisfaction of
the following conditions: (i) the Master Servicer shall have proposed a
successor master servicer to the Issuer and the Indenture Trustee in writing,
and such proposed successor master servicer shall be acceptable to the Issuer
and the Indenture Trustee; and (ii) each Rating Agency, after prior notice
thereto, shall have delivered a letter to the Issuer and the Indenture Trustee
prior to the appointment of such proposed successor master servicer stating
that such proposed appointment would not result in a Rating Event; provided,
that no such resignation by the Master Servicer shall become effective until
such successor master servicer shall have assumed the Master Servicer's
responsibilities and obligations hereunder or the Indenture Trustee shall have
designated a successor master servicer in accordance with Section 7.02. An
Opinion of Counsel delivered to the Issuer and the Indenture Trustee shall be
required in connection with any such determination permitting the resignation
of the Master Servicer.
Section 6.05. Delegation of Duties. In the ordinary course of its
business, the Master Servicer may at any time delegate any of its duties
hereunder to any Person (including any Affiliate of the Master Servicer), that
agrees to conduct such duties in accordance with standards comparable to those
applicable to the Master Servicer hereunder. Such delegation shall not relieve
the Master Servicer of liability or responsibility with respect to such
duties, and shall not constitute a resignation of the Master Servicer pursuant
to Section 6.04.
Section 6.06. Indenture Trustee Fees and Expenses; Indemnification.
(a) After the Closing Date, the Indenture Trustee and any co-trustee from
time to time shall be entitled to compensation in an amount equal to the
Indenture Trustee Fee payable to it on each Payment Date, together with the
net investment earnings on amounts on deposit in the Trustee Collection
Account as specified in Section 5.03, which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust, for all
38
services rendered by each of them in the execution of the trusts created under
the Indenture and in the exercise and performance of any of the powers and
duties under the Indenture of the Indenture Trustee and any such co-trustee.
The Indenture Trustee and any such co-trustee shall be entitled to payment or
reimbursement in accordance with Section 6.07 of the Indenture from amounts on
deposit in the Collection Account, upon request therefrom for all reasonable
expenses, disbursements and advances incurred or made by the Indenture Trustee
or any such co-trustee, respectively, in accordance with any of the provisions
of this Agreement or the other Basic Documents, except any such expenses,
disbursements or advances as may arise from the negligence, willful
misfeasance or bad faith of the Indenture Trustee or such co-trustee, as the
case may be. The Indenture Trustee shall be entitled to be reimbursed by the
Master Servicer (or, if the Master Servicer is unable to fulfill such
obligation, in accordance with Section 3.05(a) of the Indenture) for all costs
associated with the transfer of servicing from the Master Servicer to the
Indenture Trustee, including without limitation, any costs or expenses
associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be
required by the Indenture Trustee to correct any errors or insufficiencies in
the servicing data or otherwise to enable the Indenture Trustee to service the
Mortgage Loans properly and effectively. If the Indenture Trustee or an
Affiliate thereof becomes the successor Master Servicer, any custody fees and
expenses shall also be paid pursuant to Section 3.05(a) of the Indenture.
(b) The Indenture Trustee shall be indemnified and held harmless by the
Master Servicer for any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on the part of the Indenture
Trustee, arising out of or in connection with the performance of its duties
under the Basic Documents (but not with respect to the performance of any of
its duties under the Administration Agreement), including the costs and
expenses (including reasonable attorneys' fees and expenses) of defending the
Indenture Trustee against any claim in connection with the exercise or
performance of any of its powers or duties under any Basic Document; provided,
that:
(i) with respect to any such claim, the Indenture Trustee shall have
given the Master Servicer written notice thereof promptly after the
Indenture Trustee shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Indenture
Trustee shall cooperate and consult fully with the Master Servicer in
preparing such defense; and
(iii) notwithstanding anything herein to the contrary, the Master
Servicer shall not be liable for the settlement of any claim by the
Indenture Trustee entered into without the prior written consent of the
Master Servicer.
No termination of this Agreement shall affect the obligations created by
this Section of the Master Servicer to indemnify the Indenture Trustee under
the conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided pursuant to
this paragraph shall not pertain to any loss, liability or expense of the
Indenture Trustee, including the costs and expenses of defending itself
against any claim, incurred in connection with (i) any actions taken
39
by the Indenture Trustee at the direction of the Securityholders pursuant to
the terms of the Basic Documents unless consented to by the Master Servicer
(whose consent shall not be unreasonably withheld) or (ii) any actions taken
by the Indenture Trustee in its capacity as administrator under the
Administration Agreement.
Section 6.07. Indemnification of Owner Trustee by Master Servicer. The
Owner Trustee and its successors, assigns, agents and servants (collectively
the "Indemnified Parties") shall be indemnified, defended and held harmless by
the Master Servicer for any liabilities, obligations, losses, damages, taxes,
claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable attorney's fees and expenses) of any kind
and nature whatsoever (collectively, "Expenses") that may at any time be
imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of the Basic
Documents, the Trust Estate or the administration of the Trust Estate or the
action or inaction of the Owner Trustee, provided that:
(a) The Master Servicer shall not be liable for or required to indemnify
an Indemnified Party from and against Expenses arising or resulting from the
Owner Trustee's negligence with respect to the handling of funds, or gross
negligence with respect to any other acts, willful misconduct or bad faith, or
as a result of any inaccuracy of an express representation or warranty
contained in Section 6.03 of the Trust Agreement;
(b) With respect to any such claim, the Indemnified Party shall have
given the Master Servicer written notice thereof promptly after the
Indemnified Party shall have actual knowledge thereof;
(c) While maintaining control over its own defense, the Indemnified Party
shall cooperate and consult fully with the Master Servicer in preparing such
defense;
(d) Notwithstanding anything to the contrary, the Master Servicer shall
not be liable for the settlement of any claim by an Indemnified Party entered
into without the prior written consent of the Master Servicer.
No termination of this Agreement shall affect the obligation created by
this Section of the Master Servicer to indemnify the Owner Trustee and the
Indemnified Parties under the conditions and to the extent set forth herein.
ARTICLE VII
DEFAULT
Section 7.01. Default. If any one of the following events (each, a
"Servicing Default") shall occur and be continuing:
(a) any failure by the Master Servicer to deposit into any Collection
Account or the Trustee Collection Account any deposit required to be made
under the terms of this Agreement that continues unremedied for a period of
five (5) Business Days after the date upon which written notice of such
failure shall have been given to the Master Servicer by the Issuer or the
Indenture Trustee; or
40
(b) any failure on the part of the Master Servicer to duly observe or
perform in any material respect any other covenants or agreements of the
Master Servicer set forth in this Agreement, which failure materially and
adversely affects the interests of any Securityholder, and which failure
continues unremedied for a period of 45 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 Issuer or the Indenture Trustee;
then, in the case of paragraphs (a) or (b), the Master Servicer shall
immediately notify the Indenture Trustee and the Owner Trustee in writing
thereof and, for so long as such Servicing Default shall not have been
remedied by the Master Servicer, then the Issuer or the Indenture Trustee may,
by notice then given in writing to the Master Servicer, terminate all rights
and obligations of the Master Servicer hereunder, other than the Master
Servicer's right to receive servicing compensation and reimbursement of
expenses hereunder during any period prior to the date of such termination,
and the Indenture Trustee, the Owner Trustee or the Issuer may exercise any
and all other remedies available at law or in equity. Any such notice to the
Indenture Trustee shall also be given to each Rating Agency and the Issuer.
Subject to Section 7.02, on or after receipt by the Master Servicer of such
written notice in the case of paragraphs (a) or (b), all authority and power
of the Master Servicer under this Agreement shall pass to and be vested in the
Indenture Trustee as pledgee of the Mortgage Loans pursuant to this Section.
Without limitation, the Indenture Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney in-fact
or otherwise, any and all documents or other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination under paragraphs (a) or (b), whether to
complete the transfer and endorsement of each Mortgage Loan or the related
Mortgage Documents or Related Documents, or otherwise. The Master Servicer
agrees to cooperate fully with the Owner Trustee and the Indenture Trustee, as
the case may be, in effecting the termination under paragraphs (a) or (b) of
the rights and responsibilities of the Master Servicer hereunder, including
the transfer to the Indenture Trustee (or other applicable successor) for the
administration by it of all cash relating to the Mortgage Loans that shall at
the time be held by the Master Servicer for deposit into the Collection
Account, or that have been thereafter received by the Master Servicer with
respect to the Mortgage Loans. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with amending this Agreement to
reflect such succession as Master Servicer pursuant to this Section shall be
paid by the predecessor Master Servicer (or if the predecessor Master Servicer
is the Indenture Trustee, the initial Master Servicer and, in any event, if
the initial Master Servicer cannot pay any such amount, in accordance with
Section 3.05 of the Indenture) upon presentation of reasonable documentation
of such costs and expenses.
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 payment on a Mortgage Loan that was due prior to the notice
terminating the Master Servicer's rights and obligations hereunder and
received after such notice, that portion thereof to which the Master Servicer
would have been entitled hereunder, its Servicing Fee in respect thereof and
any other amounts payable to the Master Servicer hereunder the entitlement to
which arose prior to such termination.
41
Notwithstanding the foregoing, a delay in or failure of performance under
paragraph (a) or (b) above, after the expiration of the applicable grace
periods, shall not constitute a Servicing Default if such delay or failure
could not have been prevented by the exercise of reasonable diligence by the
Master Servicer and such delay or failure was caused by an Act of God, any act
of the public enemy, declared or undeclared war, public disorder, rebellion or
sabotage, or epidemic, landslide, lightning, fire, hurricane, earthquake or
flood. The preceding sentence shall not relieve the Master Servicer from using
reasonable efforts to perform its obligations hereunder in a timely manner in
accordance with the terms hereof, and the Master Servicer shall provide the
Owner Trustee, the Indenture Trustee and the Securityholders with notice of
such failure or delay by it, together with a description of its efforts to so
perform its obligations.
Section 7.02. Indenture Trustee to Act; Appointment of Successor.
(a) Within 90 days after the date the Master Servicer and the Indenture
Trustee receive a notice of termination of the Master Servicer pursuant to
Section 7.01 or sends a resignation notice pursuant to Section 6.04, the
Indenture Trustee, as pledgee of the Mortgage Loans, shall be the successor in
all respects to the Master Servicer in its capacity as Master Servicer
hereunder and with respect to the transactions set forth herein, and shall be
subject to all responsibilities, duties and liabilities relating thereto
placed on the Master Servicer by the terms hereof provided, however, the
Indenture Trustee will use its reasonable best efforts to perform the duties
of the Master Servicer prior to the end of such 90-day period. Nothing in any
Basic Document shall be construed to permit or require the Indenture Trustee
to (i) be responsible or accountable for any act or omission of any prior
Master Servicer prior to the issuance of the related notice of termination
hereunder, (ii) in its capacity as successor Master Servicer, purchase,
repurchase or substitute any Mortgage Loan or fund any Additional Balances
with respect thereto, (iii) fund any losses on any Permitted Investment
directed by any prior Master Servicer hereunder or (iv) be responsible for the
representations or warranties of any such prior Master Servicer. As
compensation therefor, the Indenture Trustee shall be entitled to such
compensation as the Master Servicer would have been entitled to hereunder if
no such notice of termination had been given. If the Indenture Trustee is (i)
unwilling to act as successor Master Servicer or (ii) legally unable so to
act, then the Indenture Trustee may appoint, or may petition a court of
competent jurisdiction to appoint any established mortgage loan servicing
institution having a net worth of not less than $10,000,000 as the successor
to the Master Servicer hereunder with respect to all or any part of the Master
Servicer's responsibilities, duties or liabilities hereunder; provided, that
no Rating Agency, after prior notice thereto, shall have notified the
Indenture Trustee in writing that the appointment of such successor Master
Servicer would result in a Rating Event. Notwithstanding the foregoing,
pending the appointment of a successor Master Servicer hereunder, unless the
Indenture Trustee is prohibited by law from so acting, the Indenture Trustee
shall act in such capacity as provided above. In connection with such
appointment and assumption, the successor shall be entitled to receive
compensation out of payments on Mortgage Loans in an amount equal to the
compensation that the Master Servicer would otherwise have received pursuant
to Section 3.10 (or such lesser compensation as the Indenture Trustee and such
successor shall agree). The appointment of a successor Master Servicer shall
not affect any liability of the predecessor Master Servicer that may have
arisen under this Agreement prior to its termination as Master Servicer, nor
shall any successor Master Servicer be liable for any acts or omissions of any
predecessor Master Servicer or for any breach by such Master Servicer of any
of its representations or warranties contained herein or in any
42
other Basic Document. The Indenture Trustee and such successor Master Servicer
shall take such action, consistent with this Agreement, as shall be necessary
to effectuate any such succession.
(b) Any successor Master Servicer, including the Indenture Trustee shall
not be deemed to be in default or to have breached its duties hereunder if the
predecessor Master Servicer shall fail to make any required deposit into the
Collection Account or otherwise cooperate with any required servicing transfer
or succession hereunder.
Section 7.03. Notification to Securityholders. Upon any termination of or
appointment of a successor Master Servicer hereunder, the Indenture Trustee
shall give prompt written notice thereof to the Issuer, the Indenture Trustee
and each Rating Agency.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Amendment. This Agreement may be amended from time to time
by the parties hereto to cure any ambiguity, correct or supplement any
provision of this Agreement that may be inconsistent with any other provision
of this Agreement, add any provision that provides additional rights to the
Certificateholders or Noteholders or ensure that the Trust is not classified
as an association (or a publicly traded partnership) taxable as a corporation
for federal income tax purposes; provided, that (A) (i) such amendment will
not, in the good faith judgment of the parties thereto, materially and
adversely affect the interest of any Certificateholder or Noteholder and (ii)
an Opinion of Counsel is delivered to the Indenture Trustee to the effect that
such amendment will not materially and adversely affect the interest of any
Certificateholder or Noteholder or (B) to the extent affected thereby, with
the consent of the Holders of Notes evidencing not less than a majority of the
Note Balance of the Notes and, to the extent affected thereby, the consent of
the Holders of Certificates evidencing not less than a majority of the
Percentage Interests of the Certificates for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided that no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Mortgage Loans or distributions that shall be
required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Note Balance
of the Notes and the Percentage Interests of the Certificates required to
consent to any such amendment, without the consent of the Holders of all the
outstanding Notes and Holders of all outstanding Certificates; and provided
further, that the Indenture Trustee shall consent thereto.
Promptly after the execution of any such amendment or consent, the Master
Servicer shall furnish written notification of the substance of such amendment
or consent to each Certificateholder and the Indenture Trustee. It shall not
be necessary for the consent of the Certificateholder or Noteholder pursuant
to this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents (and any other
consents of the Certificateholder or Noteholders provided for in this
Agreement or in any other Basic Document)
43
and of evidencing the authorization of the execution thereof by the
Certificateholder or Noteholders shall be subject to such reasonable
requirements as the Owner Trustee or Indenture Trustee may prescribe from time
to time.
Section 8.02. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT CONSIDERATION OF THE
CHOICE OF LAW PRINCIPLES THEREOF, 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 or mailed by certified mail, return receipt requested or by
facsimile, (a) if to the Depositor, to ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Securities Group; (b) if to the
Master Servicer, to _________________________________________________________
_____________________________________________________________________________
___________________________________________; (c) if to [▇▇▇▇▇'▇, to ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Home Mortgage Loan
Monitoring Group]; (d) if to [Standard & Poor's, to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance Group and
Structured Finance Residential Department]; (e) if to the Owner Trustee, to
_____________________________________________________________________________
______________________________________________________________________________
(with a copy to each Rating Agency); (f) if to the Issuer, to c/o
_____________________________________________________________________________
_____________________________________________________________________________;
(g) if to the Indenture Trustee, to
_______________________________________________
_________________________________________________________________________; and
(h) as to each of the foregoing Persons, at such other address or facsimile
numbers as shall be designated by such Person in a written notice to the other
foregoing Persons.
Section 8.04. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement, and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Securities or the rights of the Securityholders.
Section 8.05. Third-Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto, the Securityholders,
the Owner Trustee, and their respective successors and permitted assigns.
Except as otherwise provided herein, no other Person shall 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 of which shall together constitute but one and the same instrument.
44
Section 8.07. Effect of Headings and Table of Contents. The Article and
Section headings herein and in the Table of Contents are for convenience of
reference only and shall not affect the construction hereof.
Section 8.08. Termination; Clean-Up Call.
(a) The respective obligations and responsibilities of the parties hereto
shall terminate upon the last action required to be taken by the Issuer
pursuant to the Trust Agreement and by the Indenture Trustee pursuant to the
Indenture, following the earlier of (i) the date on or before which the
Indenture or the Trust Agreement is terminated; or (ii) the purchase by the
Depositor or the Master Servicer of all Mortgage Loans pursuant to paragraph
(b) below.
(b) Subject to the provisions of paragraphs (d) and (e) below, Depositor,
or if the Depositor declines the Master Servicer with the permission of the
Depositor, shall have the right to purchase the Mortgage Loans and the Trust
Estate on any Payment Date on which the aggregate Principal Balance of the
Mortgage Loans (after applying payments received in the related Collection
Period) is less than 10% of the Initial Aggregate Principal Balance, at a
price equal to the lesser of (i) 100% of the aggregate unpaid Principal
Balance of all such remaining Mortgage Loans, plus accrued and unpaid interest
thereon at the weighted average of the Mortgage Interest Rates thereon up to
the date preceding the Payment Date on which such amounts are to be
distributed to the Securityholders (and any unpaid Servicing Fee shall be
deemed to have been paid at such time) and (ii) the fair market value of all
such remaining Mortgage Loans.
(c) Notwithstanding the provisions in paragraph (b) above, the Depositor
or the Master Servicer, as applicable, may not exercise the option in
paragraph (b) above unless the purchase price for the Mortgage Loans equals or
exceeds the sum of (i) all accrued and unpaid interest (including any Interest
Carry-Forward Amounts) on the Outstanding Classes of Notes, (ii) the
outstanding Note Balances of the Outstanding Class or Classes of Notes,
including the adjusted issue prices payable pursuant to the immediately
following two sentences and (iii) any unpaid amounts owed to the Indenture
Trustee, the Owner Trustee and the Administrator. [If the Notes are redeemed
prior to the Payment Date in _________, 200__, the Class [A-IO] Notes will be
entitled to receive their adjusted issue price, which will be equal to the
present value of the remaining payments on the Class [A-IO] Notes, using a
discount rate equal to the discount rate reflected in the price paid by the
initial purchaser of the Class [A-IO] Notes on the Closing Date.] If the
Depositor or the Master Servicer exercises any such right, the Depositor or
the Master Servicer, as applicable, shall deposit the amount calculated above
with the Indenture Trustee for distribution to the Securityholders and, upon
the receipt of such deposit, the Indenture Trustee or the Custodian shall
release the related Mortgage Files to the Depositor or the Master Servicer, as
applicable.
(d) The Master Servicer, at its expense, shall prepare and deliver to the
Indenture Trustee for execution at the time the Mortgage Loans are to be
released to the Depositor or the Master Servicer, appropriate documents
assigning each such Mortgage Loan from the Indenture Trustee or the Issuer to
the Depositor or the Master Servicer, as applicable.
45
Section 8.09. Certain Matters Affecting the Indenture Trustee. For all
purposes of this Agreement, in the performance of any of its duties or in the
exercise of any of its powers hereunder (except in its capacity as successor
Servicer after a Servicer Default), the Indenture Trustee shall be subject to
and entitled to the benefits of Article VI of the Indenture.
Section 8.10. Owner Trustee Not Liable for Mortgage Documents or Related
Documents. The Owner Trustee makes no representations as to the validity or
sufficiency of this Agreement, any Basic Document, the Securities (other than
the signature of the Owner Trustee on the Certificate), or any Mortgage
Document or Related Document. 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 the
Securityholders, including the compliance by the Depositor or Seller with any
representation or warranty made in any Basic Document or the accuracy of any
such representation or warranty, or any action of the Paying Agent, the
Certificate Paying Agent, the Certificate Registrar or the Indenture Trustee
taken in the name of the Owner Trustee.
Section 8.11. Limitation of Liability of Owner Trustee. Notwithstanding
anything contained herein to the contrary, this Agreement has been
countersigned by [Name of Owner Trustee] not in its individual capacity but
solely in its capacity as Owner Trustee, and in no event shall [Name of Owner
Trustee] in its individual capacity or any beneficial owner of the Issuer have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder, as to all of which recourse shall
be had solely to the assets of the Issuer. For all purposes of this Agreement,
in the performance of any duties or obligations of the Issuer hereunder, the
Owner Trustee shall be subject to, and entitled to the benefits of, the terms
and provisions of Articles VI, VII and VIII of the Trust Agreement.
Section 8.12. Tax Treatment of Servicing Fee and Other Amounts. The
Master Servicer covenants and agrees that it and its Affiliates will treat all
compensation derived by it or any of its Affiliates under this Agreement,
including, without limitation, the Servicing Fee, late payment charges and
other receipts not required to be deposited into the Collection Account as
specified in Section 5.02 and net income from Permitted Investments of funds
in the Collection Account, as compensation for services for all federal, state
and local income tax purposes. In addition, the Master Servicer covenants and
agrees that it and its Affiliates will treat, for all federal, state and local
income tax purposes, all amounts not provided for in this Agreement that are
to be paid to it or any of its Affiliates in respect of its activities as
Master Servicer or that are determined directly or indirectly by reference to
payments on the Mortgage Loans as compensation for services.
* * *
46
IN WITNESS WHEREOF, the Depositor, Seller, the Master Servicer, the
Issuer and the Indenture Trustee have caused this Agreement to be duly
executed by their respective officers or representatives as of the date and
year first above written.
BEAR ▇▇▇▇▇▇▇ ASSET BACKED SECURITIES I LLC,
as Depositor
By: __________________________________________
Name:
Title:
[NAME OF SELLER AND MASTER SERVICER],
as Seller and as Master Servicer
By:___________________________________________
Name:
Title:
[NAME OF OWNER TRUSTEE]
as Issuer
By: [NAME OF ISSUING TRUST], not in its
individual capacity but solely as Owner
Trustee
By:_______________________________________
Name:
Title:
[NAME OF INDENTURE TRUSTEE],
as Indenture Trustee
By:___________________________________________
Name:
Title:
47
EXHIBIT A
MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
A-1
EXHIBIT B
MORTGAGE LOAN SCHEDULE
B-1
EXHIBIT C
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PREMISES:
That [Name of Indenure Trustee] (the "Indenture Trustee") under the
indenture dated as of _________ 1, 200__ (the "Indenture"), between [Name of
Issuing Trust] and the Indenture Trustee, a national banking association
existing under the laws of the United States of America and having its
principal office located at ___________________________________________
_____________________________________, hath made, constituted and appointed,
and does by these presents make, constitute and appoint [Name of Master
Servicer], a bank organized and existing under the laws of the State of
[________], as Master Servicer under the Sale and Servicing Agreement (defined
below) and [_____________], a [_______________] organized under the laws of
[__________], as initial subservicer thereunder, its true and lawful
attorney-in-fact, with full power and authority to sign, execute, acknowledge,
deliver, file for recordation and record any instrument on its behalf and to
perform such other act or acts as may be customarily and reasonably necessary
and appropriate to effectuate the following enumerated transactions in respect
of any of the Mortgage Loans or the related Mortgaged Properties, Mortgage
Documents or Related Documents, for which the undersigned is acting as
Indenture Trustee (whether the undersigned is named therein as mortgagee or
beneficiary or has become mortgagee by virtue of endorsement of related
Mortgage Documents) and for which [Name of Master Servicer] is acting as
Master Servicer pursuant to the sale and servicing agreement dated as of
_________, 200__ (the "Sale and Servicing Agreement"). Capitalized terms used
herein that are not otherwise defined shall have the meanings ascribed thereto
in Appendix A to the Indenture.
This appointment shall apply to the following enumerated transactions
only:
1. The modification or re-recording of a Mortgage Loan, where such
modification or re-recording is for the purpose of correcting the
Mortgage Loan to conform same to the original intent of the parties
thereto or to correct title errors discovered after such title insurance
was issued and such modification or re-recording, in either instance,
does not adversely affect the Lien of the Mortgage Loan as insured.
2. The subordination of the Lien of a Mortgage Loan to an easement in favor
of a public utility company or a government agency or unit with powers of
eminent domain; this paragraph shall include the execution of partial
satisfactions/releases, partial reconveyances or the execution of
requests to trustees to accomplish the same.
3. With respect to a Mortgage Loan, the foreclosure, the taking of a deed in
lieu of foreclosure, or the completion of judicial or non-judicial
foreclosure or termination, cancellation or rescission of any such
foreclosure, including any and all of the following acts:
a. the substitution of trustee(s) serving under a deed of trust, in
accordance with state law and such deed of trust;
C-1
b. statements of breach or non-performance;
c. notices of default;
d. cancellations/rescissions of notices of default and/or notices of
sale;
e. the taking of a deed in lieu of foreclosure; and
f. such other documents and actions as may be necessary under the terms
of the Mortgage Loan or state law to expeditiously complete such
transactions.
4. The conveyance of mortgaged properties to a mortgage insurer, or the
closing of the title to the property to be acquired as real estate owned,
or conveyance of title to real estate owned.
5. The completion of loan assumption agreements.
6. The full satisfaction and/or release of a Mortgage Loan or full
reconveyance upon payment and discharge of all sums secured thereby,
including cancellation of any related Mortgage Documents.
7. The assignment of any Mortgage Loan and the related Mortgage Documents in
connection with the repurchase of such Mortgage Loan.
8. The full assignment of a Mortgage Loan upon payment and discharge of all
sums secured thereby in conjunction with the refinancing thereof
including, without limitation, the endorsement of the related Mortgage
Documents.
9. The subordination of the Lien of a Mortgage Loan, where such
subordination is in connection with any modification pursuant to Section
3.01(b) of the Sale and Servicing Agreement, and the execution of partial
satisfactions or releases in connection with such Section.
10. The modification or re-recording of a Mortgage Loan, where such
modification or re-recording is for the purpose of any modification
pursuant to Section 3.03 of the Sale and Servicing Agreement.
11. Any other modification of the terms of a Mortgage Loan (including the
Mortgage Interest Rate thereon) made in accordance with the Sale and
Servicing Agreement.
The undersigned gives such attorneys-in-fact full power and authority to
execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by or
under this Limited Power of Attorney as fully as the undersigned might or
could do, and does hereby ratify and confirm to all that such
attorneys-in-fact shall lawfully do or cause to be done by authority hereof.
Third parties without actual notice may rely upon the exercise of the
power granted under this Limited Power of Attorney, and may be satisfied that
this Limited Power of Attorney shall
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continue in full force and effect has not been revoked unless an instrument of
revocation shall have been made in writing by the undersigned.
[NAME OF INDENTURE TRUSTEE], not in its
individual capacity but solely as Indenture Trustee
By:______________________________________________
Name:
Title:
C-3
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: [Name of Indenture Trustee]
___________________________
___________________________
___________________________
Re: Sale and Servicing Agreement dated as of _________ 1, 200__,
among Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, [Name of
Seller and Master Servicer], [Name of Issuing Trust] and [Name
of Indenture Trustee]
In connection with the administration of the Mortgage Loans held by you
as Indenture Trustee pursuant to the above-captioned Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & ZIP Code:
Reason for Requesting Documents (check one):
_____ 1. Mortgage Paid in Full
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation (Repurchased, etc.)
_____ 5. Nonliquidation Reason:____________________________
D-1
Address to which Indenture Trustee should
Deliver the Mortgage File: _____________________________
_____________________________
_____________________________
By: ______________________________________
(authorized signer)
Issuer: __________________________________
Address: _________________________________
Date: ____________________________________
[Name of Indenture Trustee]
Please acknowledge the execution of the above request by your signature and
date below:
________________________________ __________________
Signature Date
Documents returned to Indenture Trustee:
________________________________ __________________
Indenture Trustee Date
D-2
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF INDENTURE TRUSTEE
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset Backed Securities Group
[Name of Seller]
_________________________
_________________________
_________________________
Re: [NAME OF ISSUING TRUST]
The undersigned, a duly authorized representative of [Name of Indenture
Trustee], as Indenture Trustee (the "Indenture Trustee") and pursuant to the
Sale and Servicing Agreement dated as of _________ 1, 200__, between Bear
▇▇▇▇▇▇▇ Asset Backed Securities I LLC as Depositor of the Trust, [Name of
Seller and Master Servicer], as Seller and Master Servicer, [Name of Issuing
Trust] and the Indenture Trustee (hereinafter as such agreement may have been,
or may from time to time be, amended, supplemented or otherwise modified, the
"Sale and Servicing Agreement"), does hereby certify as follows:
A. Capitalized terms used in this Certificate have their respective
meanings set forth in the Sale and Servicing Agreement. References herein to
certain subsections are references to the respective subsections of the Sale
and Servicing Agreement.
B. This Certificate is being delivered pursuant to Section 2.03.
C. The Undersigned is a Responsible Officer.
D. This Certificate is being delivered by the date specified in Section
2.03
E. Pursuant to and in accordance with the limitations set forth in
Section 2.03, the Indenture Trustee hereby certifies and declares that, with
noted exceptions on attached schedule, (i) all documents required to be
delivered pursuant to Section 2.03 are in its possession, (ii) each such
document has been reviewed by it and has not been mutilated, damaged, torn, or
otherwise physically altered (handwritten additions, changes or corrections
shall not constitute physical alteration if initialed by the Mortgagor),
appears regular on its face and relates to such Mortgage Loan, and (iii) it
has received a Mortgage File containing the Mortgage and Mortgage Note or Loan
Agreement, as applicable, for each Mortgage Loan listed on the attached
schedule.
E-1
IN WITNESS WHEREOF, the Indenture Trustee has caused this Certificate to
be duly executed this _____ day of ___________, 20__.
[NAME OF INDENTURE TRUSTEE],
as Indenture Trustee
By: ____________________________________
Authorized Officer
E-2
F-2
EXHIBIT F
FORM OF FINAL CERTIFICATION OF INDENTURE TRUSTEE
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset Backed Securities Group
[Name of Seller]
______________________________
______________________________
______________________________
Re: [NAME OF ISSUING TRUST]
The undersigned, a duly authorized representative of [Name of Indenture
Trustee], as Indenture Trustee (the "Indenture Trustee") and pursuant to the
Sale and Servicing Agreement dated as of _____________ __, 200__, between Bear
▇▇▇▇▇▇▇ Asset Backed Securities, Inc., as Depositor of the Trust, [Name of
Seller and Master Servicer, as Seller and Master Servicer, the [Name of
Issuing Trust] and the Indenture Trustee (hereinafter as such agreement may
have been, or may from time to time be, amended, supplemented or otherwise
modified, the "Sale and Servicing Agreement"), does hereby certify as follows:
A. Capitalized terms used in this Certificate have their respective
meanings set forth in the Sale and Servicing Agreement. References herein to
certain subsections are references to the respective subsections of the Sale
and Servicing Agreement.
B. This Certificate is being delivered pursuant to Section 2.03.
C. The Undersigned is a Responsible Officer.
D. This Certificate is being delivered by the date specified in Section
2.03
E. Pursuant to and in accordance with the limitations set forth in
Section 2.03, the Indenture Trustee hereby certifies and declares that, with
the exceptions noted on the attached schedule, that with respect to the
Mortgage Documents relating to each Mortgage Loan listed on the attached
Mortgage Loan Schedule to the Sale and Servicing Agreement, the following data
elements on such Mortgage Documents are the same as set forth on the Mortgage
Loan Schedule to the Sale and Servicing Agreement for such Mortgage Loan: (a)
Seller's loan number, (b) the Mortgagor's name, (c) the address (including
city and state) of the related Mortgaged Property, (d) the original principal
balance, and (e) the maturity of the related Mortgage Note.
F-1
IN WITNESS WHEREOF, the Indenture Trustee has caused this Certificate to
be duly executed this _____ day of ___________, 20__.
[NAME OF INDENTRUE TRUSTEE],
as Indenture Trustee
By:__________________________________
Authorized Officer
F-2
EXHIBIT G
FORM OF CERTIFICATION TO BE
PROVIDED BY THE MASTER SERVICER WITH FORM 10-K
Re: [Name of Issuing Trust]
I, ____________, the [senior officer] of [Name of Issuing Trust] (the
"Master Servicer") in charge of servicing, certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution and servicing reports filed in respect of
periods included in the year covered by this annual report, for [Name of
Issuing Trust] (the "Trust").
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report.
3. Based on my knowledge, the distribution information and the servicing
information required to be provided to the Indenture Trustee by the Master
Servicer under the Sale and Servicing Agreement is included in these reports.
4. I am responsible for reviewing the activities performed by the Master
Servicer under the Sale and Servicing Agreement and based upon my knowledge
and the annual compliance review required under the Sale and Servicing
Agreement, and except as disclosed in the reports, the Master Servicer has
fulfilled its obligations under the Sale and Servicing Agreement.
5. The reports disclose all significant deficiencies relating to the
Master Servicer's compliance with the minimum servicing standards based upon
the report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar standard as set forth in the Sale and Servicing Agreement
that is included in these reports.
Capitalized terms used but not defined herein have the meanings ascribed
to them in the Sale and Servicing Agreement, dated _________ 1, 200__ (the
"Sale and Servicing Agreement"), among Bear ▇▇▇▇▇▇▇ Asset Backed Securities I
LLC, as depositor, the Master Servicer, the Trust and [Name of Indenture
Trustee], as indenture trustee (the "Indenture Trustee").
G-1
[In giving the certifications above, I have reasonably relied on
information provided by the following unaffiliated third parties: Bear ▇▇▇▇▇▇▇
Asset Backed Securities I LLC`, and [Name of Indenture Trustee]]
[NAME OF MASTER SERVICER]
By: _____________________________________
Name: ___________________________________
Title: __________________________________
G-2