Exhibit 99.1
EXECUTION COPY
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
as Depositor
MortgageIT TRUST 2004-1,
as Issuer
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Indenture Trustee
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer and Securities Administrator
and
EMC MORTGAGE CORPORATION,
as Seller and Company
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SALE AND SERVICING AGREEMENT
Dated as of September 30, 2004
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Structured Asset Mortgage Investments II Inc.
MortgageIT Trust 2004-1,
Mortgage-Backed Notes, Series 2004-1
Table of Contents
Page
ARTICLE I Definitions...................................................2
Section 1.01. Definitions.............................................2
Section 1.02. Other Definitional Provisions...........................2
ARTICLE II Conveyance of Mortgage Loans;.................................3
Section 2.01. Conveyance of Mortgage Loans to Issuer..................3
Section 2.02. Acceptance of Mortgage Loans by the Issuer..............5
Section 2.03. Assignment of Interest in the Mortgage Loan
Purchase Agreement......................................7
Section 2.04. Substitution of Mortgage Loans..........................8
Section 2.05. Representations and Warranties Concerning the
Depositor...............................................9
Section 2.06. Representations and Warranties Regarding the
Master Servicer........................................10
Section 2.07. Assignment of Agreement................................11
ARTICLE III Administration and Servicing of Mortgage Loans...............13
Section 3.01. Master Servicer........................................13
Section 3.02. [Reserved].............................................14
Section 3.03. Monitoring of Servicer.................................14
Section 3.04. Fidelity Bond..........................................15
Section 3.05. Power to Act; Procedures...............................15
Section 3.06. Due-on-Sale Clauses; Assumption Agreements.............16
Section 3.07. Release of Mortgage Files..............................16
Section 3.08. Documents, Records and Funds in Possession of
Master Servicer To Be Held for Issuer and
Indenture Trustee......................................17
Section 3.09. Standard Hazard Insurance and Flood Insurance
Policies...............................................18
Section 3.10. Presentment of Claims and Collection of Proceeds.......18
Section 3.11. Maintenance of the Primary Mortgage Insurance
Policies...............................................18
Section 3.12. Indenture Trustee to Retain Possession of Certain
Insurance Policies and Documents.......................19
Section 3.13. Realization Upon Defaulted Mortgage Loans..............19
Section 3.14. Compensation for the Master Servicer...................20
Section 3.15. REO Property...........................................20
Section 3.16. Annual Officer's Certificate as to Compliance..........20
Section 3.17. Annual Independent Accountant's Servicing Report.......21
Section 3.18. Reports Filed with Securities and Exchange
Commission.............................................21
Section 3.19. The Company............................................22
Section 3.20. UCC....................................................22
Section 3.21. Optional Purchase of Defaulted Mortgage Loans..........22
Section 3.22. Monthly Advances.......................................23
Section 3.23. Compensating Interest Payments.........................23
ARTICLE IV Accounts.....................................................24
Section 4.01. Protected Accounts.....................................24
Section 4.02. [Reserved].............................................25
Section 4.03. [Reserved].............................................26
Section 4.04. Payment Account........................................27
Section 4.05. Permitted Withdrawals and Transfers from the
Payment Account........................................27
ARTICLE V The Master Servicer..........................................30
Section 5.01. Liabilities of the Master Servicer.....................30
Section 5.02. Merger or Consolidation of the Master Servicer.........30
Section 5.03. Indemnification of the Indenture Trustee, Owner
Trustee, the Master Servicer and the Securities
Administrator..........................................30
Section 5.04. Limitations on Liability of the Master Servicer
and Others.............................................31
Section 5.05. Master Servicer Not to Resign..........................32
Section 5.06. Successor Master Servicer..............................32
Section 5.07. Sale and Assignment of Master Servicing................32
ARTICLE VI Default......................................................34
Section 6.01. Master Servicer Events of Default......................34
Section 6.02. Indenture Trustee to Act; Appointment of Successor.....36
Section 6.03. Notification to Noteholders............................37
Section 6.04. Waiver of Defaults.....................................37
ARTICLE VII Miscellaneous Provisions.....................................38
Section 7.01. Amendment..............................................38
Section 7.02. Recordation of Agreement...............................39
Section 7.03. Governing Law..........................................39
Section 7.04. Notices................................................39
Section 7.05. Severability of Provisions.............................40
Section 7.06. Successors and Assigns.................................40
Section 7.07. Article and Section Headings...........................40
Section 7.08. Counterparts...........................................40
Section 7.09. Notice to Rating Agencies..............................40
Section 7.10. Termination............................................40
Section 7.11. No Petition............................................41
Section 7.12. No Recourse............................................41
Section 7.13. Additional Terms Regarding Indenture...................41
EXHIBITS
Exhibit A...- Mortgage Loan Schedule
Exhibit B...- Request for Release of Documents
Exhibit C...- MortgageIT Servicing Agreement
Exhibit D...- Assignment Agreement
Exhibit E...- Mortgage Loan Purchase Agreement
SALE AND SERVICING AGREEMENT
Sale and Servicing Agreement dated as of September 30, 2004 (the
"Agreement"), among Structured Asset Mortgage Investments II Inc., a Delaware
corporation, as depositor (the "Depositor"), MortgageIT Trust 2004-1, a
Delaware statutory trust, as issuer (the "Issuer"), Deutsche Bank National
Trust Company, a national banking association, not in its individual capacity
but solely as indenture trustee (the "Indenture Trustee"), ▇▇▇▇▇ Fargo Bank,
National Association ("▇▇▇▇▇ Fargo"), as master servicer (in such capacity,
the "Master Servicer") and as securities administrator (in such capacity, the
"Securities Administrator"), and EMC Mortgage Corporation, as seller (in such
capacity, the "Seller") and as company (in such capacity, the "Company").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor acquired the Mortgage
Loans from the Seller pursuant to the Mortgage Loan Purchase Agreement.
Prior to the Closing Date, pursuant to a Trust Agreement, as amended and
restated on the Closing Date, the Depositor created MortgageIT Trust 2004-1,
a Delaware statutory trust, for the purpose of holding the Mortgage Loans and
issuing the Trust Certificates (the "Certificates"), pursuant to the Trust
Agreement, and the Notes, pursuant to the Indenture. Pursuant to this
Agreement, on the Closing Date, the Depositor will sell the Mortgage Loans
and certain other property to the Issuer and pursuant to the Indenture, the
Issuer will pledge all of its right, title and interest in and to the
Mortgage Loans and other property acquired from the Depositor pursuant to
this Agreement to the Indenture Trustee to secure the Notes issued pursuant
to the Indenture. In consideration for the Mortgage Loans and other property
conveyed pursuant to this Agreement, the Depositor will receive from the
Issuer the Certificates evidencing the entire beneficial ownership interest
in the Issuer and the Notes representing indebtedness of the Issuer.
The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $811,228,608.17.
In consideration of the mutual agreements herein contained, each of the
Depositor, the Issuer, the Master Servicer, the Securities Administrator, the
Seller, the Company and the Indenture Trustee undertakes and agrees to
perform their respective duties hereunder as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Definitions contained in Appendix A to the
Indenture which is incorporated by reference herein. All other capitalized
terms used herein shall have the meanings specified herein.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other
document, to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document
shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" shall
mean "including without limitation".
(d) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
Conveyance of Mortgage Loans;
Section 2.01. Conveyance of Mortgage Loans to Issuer. (a) The Depositor
concurrently with the execution and delivery of this Agreement, sells,
transfers and assigns to the Issuer without recourse all its right, title and
interest in and to (i) the Mortgage Loans identified in the Mortgage Loan
Schedule, including all interest and principal due with respect to the
Mortgage Loans after the Cut-off Date, but excluding any payments of
principal and interest due on or prior to the Cut-off Date; (ii) such assets
as shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Payment Account, (iii) such assets relating
to the Mortgage Loans as from time to time may be held by the Servicer in the
Protected Account and the Securities Administrator in the Payment Account,
(iv) any REO Property, (v) the Required Insurance Policies and any amounts
paid or payable by the insurer under any Insurance Policy (to the extent the
mortgagee has a claim thereto), (vi) the Mortgage Loan Purchase Agreement to
the extent provided in Subsection 2.03(a), (vii) the rights with respect to
each of the PWS Agreement and the MortgageIT Servicing Agreement and (viii)
any proceeds of the foregoing. Although it is the intent of the Depositor
and the Issuer that the conveyance of the Depositor's right, title and
interest in and to the Mortgage Loans and other assets in the Trust Estate to
the Issuer pursuant to this Agreement shall constitute a purchase and sale
and not a loan, in the event that such conveyance is deemed to be a loan, it
is the intent of the parties to this Agreement that the Depositor shall be
deemed to have granted to the Issuer a first priority perfected security
interest in all of the Depositor's right, title and interest in, to and under
the Mortgage Loans and other assets in the Trust Estate, and that this
Agreement shall constitute a security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Depositor
hereby delivers to the Custodian, on behalf of the Issuer, with respect to
each Mortgage Loan:
(i) the original Mortgage Note, endorsed without recourse in blank or to
the order of the Indenture Trustee and showing an unbroken chain of
endorsements from the originator thereof to the Person endorsing it in blank
or to the Indenture Trustee, or lost note affidavit together with a copy of
the related Mortgage Note;
(ii) the original Mortgage and, if the related Mortgage Loan is a MOM Loan,
noting the presence of the MIN and language indicating that such Mortgage
Loan is a MOM Loan, which shall have been recorded (or if the original is not
available, a copy), with evidence of such recording indicated thereon (or if
clause (w) in the proviso below applies, shall be in recordable form);
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy of the
assignment (which may be in the form of a blanket assignment if permitted in
the jurisdiction in which the Mortgaged Property is located) in blank or to
"Deutsche Bank National Trust Company, as Indenture Trustee, on behalf of the
Noteholders", with evidence of recording with respect to each Mortgage Loan
in the name of the Indenture Trustee thereon (or if clause (w) in the proviso
below applies or for Mortgage Loans with respect to which the related
Mortgaged Property is located in a state other than Maryland or an Opinion of
Counsel has been provided as set forth in this Section 2.01(b), shall be in
recordable form);
(iv) all intervening assignments of the Security Instrument, if applicable
and only to the extent available to the Depositor with evidence of recording
thereon;
(v) the original or a copy of the policy or certificate of primary mortgage
guaranty insurance, to the extent available, if any;
(vi) the original or a copy of the policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title insurance;
and
(vii) originals of all modification agreements, if applicable and available;
provided, however, that in lieu of the foregoing, the Depositor may deliver
to the Custodian, the following documents, under the circumstances set forth
below: (w) in lieu of the original Security Instrument (including the
Mortgage), assignments to the Indenture Trustee or intervening assignments
thereof which have been delivered, are being delivered or will, upon receipt
of recording information relating to such documents required to be included
thereon, be delivered to recording offices for recording and have not been
returned to the Depositor in time to permit their delivery as specified
above, the Depositor may deliver a true copy thereof with a certification by
the Servicer, or its agent on its behalf, substantially to the effect that
such copy is a true and correct copy of the original; (x) in lieu of the
Security Instrument, assignment in blank or to the Indenture Trustee or
intervening assignments thereof, if the applicable jurisdiction retains the
originals of such documents (as evidenced by a certification from the
Depositor to such effect) the Depositor may deliver photocopies of such
documents containing an original certification by the judicial or other
governmental authority of the jurisdiction where such documents were recorded
or from the Depositor's agent, escrow agent or closing attorney; (y) in lieu
of the Mortgage Notes relating to the Mortgage Loans identified on Exhibit 5
to the Mortgage Loan Purchase Agreement, the Depositor may deliver lost note
affidavits from the Seller; and (z) the Depositor shall not be required to
deliver intervening assignments or Mortgage Note endorsements between the
Underlying Seller and the Seller, between the Seller and the Depositor,
between the Depositor and the Issuer, and between the Issuer and the
Indenture Trustee; and provided, further, however, that in the case of
Mortgage Loans which have been prepaid in full after the Cut-off Date and
prior to the Closing Date, the Depositor, in lieu of delivering the above
documents, may deliver to the Indenture Trustee, a certification to such
effect and shall deposit all amounts paid in respect of such Mortgage Loans
in the Payment Account on the Closing Date. The Depositor shall deliver such
original documents (including any original documents as to which certified
copies had previously been delivered) to the Custodian, promptly after they
are received. The Depositor shall cause the Seller, at its expense, to cause
each assignment of the Security Instrument to the Indenture Trustee to be
recorded not later than 180 days after the Closing Date, unless (a) such
recordation is not required by the Rating Agencies as evidenced in writing or
an Opinion of Counsel addressed to the Indenture Trustee has been provided to
the Indenture Trustee and the Issuer which states that recordation of such
Security Instrument is not required to protect the interests of the
Noteholders in the related Mortgage Loans or (b) MERS is identified on the
Mortgage or on a properly recorded assignment of the Mortgage as the
mortgagee of record solely as nominee for the Seller and its successor and
assigns; provided, however, notwithstanding the foregoing, each assignment
shall be submitted for recording by the Seller in the manner described above,
at no expense to the Issuer or the Indenture Trustee, upon the earliest to
occur of: (i) reasonable direction by the Holders of Notes aggregating at
least 25% of the Note Principal Balance of the Notes, (ii) the occurrence of
a Master Servicer Event of Default or an Event of Default, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller
and (iv) the occurrence of a servicing transfer as described in Section 6.02
hereof. Notwithstanding the foregoing, if the Seller fails to pay the cost
of recording the assignments, such expense will be paid by the Securities
Administrator from funds in the Payment Account in accordance with Section
4.05 of this Agreement.
Section 2.02. Acceptance of Mortgage Loans by the Issuer. (a) The
Issuer acknowledges the sale, transfer and assignment of the Trust Estate to
it by the Depositor and receipt of, subject to further review by the
Custodian, on its behalf, and the exceptions which may be noted by the
Custodian, on its behalf, pursuant to the procedures described below, and the
Issuer will cause the Custodian to hold, the documents (or certified copies
thereof) delivered to the Custodian, pursuant to Section 2.01, and any
amendments, replacements or supplements thereto and all other assets of the
Trust Estate delivered to it, in trust for the use and benefit of all present
and future Holders of the Notes issued pursuant to the Indenture. On the
Closing Date, in accordance with the Custodial Agreement, the Custodian shall
acknowledge with respect to each Mortgage Loan by delivery to the Depositor,
the Seller, the Indenture Trustee and the Issuer of an Initial Certification,
receipt of the Mortgage File, but without review of such Mortgage File,
except to the extent necessary to confirm that such Mortgage File contains
the related Mortgage Note or lost note affidavit. No later than 90 days
after the Closing Date (or, with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Custodian thereof), the
Custodian, in accordance with the Custodial Agreement, shall review each
Mortgage File delivered to it and shall execute and deliver to the Depositor,
the Seller, the Indenture Trustee and Issuer an Interim Certification. In
conducting such review, the Custodian will ascertain whether all documents
required to be reviewed by it have been executed and received, and based on
the Mortgage Loan Schedule, whether the Mortgage Notes relate, determined on
the basis of the Mortgagor name, original principal balance and loan number,
to the Mortgage Loans it has received, as identified in the Mortgage Loan
Schedule. In performing any such review, the Custodian may conclusively rely
on the purported due execution and genuineness of any such document and on
the purported genuineness of any signature thereon. If the Custodian finds
any document constituting part of the Mortgage File has not been executed or
received, or is unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the Mortgage Loans identified
in Exhibit A or does not conform on its face to the review criteria specified
in this Section (a "Material Defect"), the Custodian shall notify the Seller
and the Indenture Trustee of such Material Defect in writing. In accordance
with the Mortgage Loan Purchase Agreement, the Seller shall correct or cure
any such Material Defect within ninety (90) days from the date of notice from
the Indenture Trustee of the defect and if the Seller fails to correct or
cure the Material Defect within such period, the Indenture Trustee shall
enforce the Seller's obligation under the Mortgage Loan Purchase Agreement
to, within 90 days from the Indenture Trustee's notification, provide a
Substitute Mortgage Loan or purchase such Mortgage Loan at the Repurchase
Price; provided, however, that if such Material Defect relates solely to the
inability of the Seller to deliver the original Security Instrument or
intervening assignments thereof, or a certified copy because the originals of
such documents, or a certified copy have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan
if the Seller delivers such original documents or certified copy promptly
upon receipt, but in no event later than 360 days after the Closing Date.
The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver such original or copy of any document submitted for
recording to the appropriate recording office in the applicable jurisdiction
because such document has not been returned by such office; provided that the
Seller shall instead deliver a recording receipt of such recording office or,
if such receipt is not available, a certificate confirming that such
documents have been accepted for recording, and delivery to the Custodian
shall be effected by the Seller within thirty days of its receipt of the
original recorded document.
(b) No later than 180 days after the Closing Date, the Custodian, in
accordance with the Custodial Agreement, will review, for the benefit of the
Noteholders, the Mortgage Files delivered to it and will execute and deliver
or cause to be executed and delivered to the Depositor, the Seller, the
Indenture Trustee and the Issuer a Final Certification. In conducting such
review, the Custodian will ascertain whether an original of each document
required to be recorded has been returned from the recording office with
evidence of recording thereon or a certified copy has been obtained from the
recording office. If the Custodian finds a Material Defect, the Custodian
shall promptly notify the Seller and the Indenture Trustee in writing
(provided, however, that with respect to those documents described in
subsections (b)(iv), (v) and (vii) of Section 2.01, the Custodian's
obligations shall extend only to the documents actually delivered to the
Custodian pursuant to such subsections). In accordance with the Mortgage
Loan Purchase Agreement, the Seller shall correct or cure any such Material
Defect within 90 days from the date of notice from the Custodian or the
Indenture Trustee of the Material Defect and if the Seller is unable to cure
such Material Defect within such period, and if such Material Defect
materially and adversely affects the interests of the Noteholders in the
related Mortgage Loan, the Indenture Trustee shall enforce the Seller's
obligation under the Mortgage Loan Purchase Agreement to, within 90 days from
the Custodian's or Indenture Trustee's notification, provide a Substitute
Mortgage Loan or purchase such Mortgage Loan at the Repurchase Price;
provided, however, that if such defect relates solely to the inability of the
Seller to deliver the original Security Instrument or intervening assignments
thereof, or a certified copy, because the originals of such documents or a
certified copy, have not been returned by the applicable jurisdiction, the
Seller shall not be required to purchase such Mortgage Loan, if the Seller
delivers such original documents or certified copy promptly upon receipt, but
in no event later than 360 days after the Closing Date. The foregoing
repurchase obligation shall not apply in the event that the Seller cannot
deliver such original or copy of any document submitted for recording to the
appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Seller shall
instead deliver a recording receipt of such recording office or, if such
receipt is not available, a certificate confirming that such documents have
been accepted for recording, and delivery to the Indenture Trustee shall be
effected by the Seller within thirty days of its receipt of the original
recorded document.
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Subsections 2.02(a) or (b) above, the Seller shall remit to
Securities Administrator the Repurchase Price for deposit in the Payment
Account and the Seller shall provide to the Securities Administrator and the
Indenture Trustee written notification detailing the components of the
Repurchase Price. Upon deposit of the Repurchase Price in the Payment
Account, the Depositor shall notify the Indenture Trustee and the Custodian
and, the Indenture Trustee (upon receipt of a Request for Release in the form
of Exhibit B attached hereto with respect to such Mortgage Loan and
certification that the Repurchase Price has been deposited in the Payment
Account), shall cause the Custodian to release to the Seller the related
Mortgage File and the Indenture Trustee shall execute and deliver all
instruments of transfer or assignment, without recourse, representation or
warranty, furnished to it by the Seller, as are necessary to vest in the
Seller title to and rights under the Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which the Repurchase Price in
available funds is deposited in the Payment Account. The Master Servicer
shall amend the Mortgage Loan Schedule, which was previously delivered to it
by the Depositor in a form agreed to between the Depositor, the Indenture
Trustee and the Custodian, to reflect such repurchase and shall promptly
deliver to the Rating Agencies, the Indenture Trustee, the Custodian and the
Issuer a copy of such amendment. The obligation of the Seller to repurchase
or substitute for any Mortgage Loan a Substitute Mortgage Loan as to which
such a Material Defect in a constituent document exists shall be the sole
remedy respecting such Material Defect available to the Issuer, the
Noteholders or to the Indenture Trustee on their behalf.
Section 2.03. Assignment of Interest in the Mortgage Loan Purchase
Agreement. (a) Depositor hereby assigns to the Issuer, all of its right,
title and interest in the Mortgage Loan Purchase Agreement, including but not
limited to the Depositor's rights and obligations pursuant to the MortgageIT
Servicing Agreement and the PWS Agreement (noting that the Seller has
retained the right in the event of breach of the representations, warranties
and covenants, if any, with respect to the Mortgage Loans of the Servicer
under the PWS Agreement to enforce the provisions thereof and to seek all or
any available remedies). The Depositor hereby acknowledges that such right,
title and interest in the Mortgage Loan Purchase Agreement, will be pledged
by the Issuer to the Indenture Trustee pursuant to the Indenture. The
obligations of the Seller to substitute or repurchase, as applicable, a
Mortgage Loan shall be the Issuer's, the Indenture Trustee's and the
Noteholders' sole remedy for any breach thereof. At the request of the
Issuer or the Indenture Trustee, the Depositor shall take such actions as may
be necessary to enforce the above right, title and interest on behalf of the
Issuer, the Indenture Trustee and the Noteholders and shall execute such
further documents as the Issuer or the Indenture Trustee may reasonably
require in order to enable the Indenture Trustee to carry out such
enforcement.
(b) If the Depositor, the Securities Administrator, the Issuer or the
Indenture Trustee discovers a breach of any of the representations and
warranties set forth in the Mortgage Loan Purchase Agreement, which breach
materially and adversely affects the value of the interests of the Issuer,
the Noteholders or the Indenture Trustee in the related Mortgage Loan, the
party discovering the breach shall give prompt written notice of the breach
to the other parties. Any breach of a representation or warranty contained
in clause (xvii) of Section 7 of the Mortgage Loan Purchase Agreement in
respect of a Mortgage Loan, shall be deemed to materially adversely affect
the interests of the Noteholders. The Seller, within 90 days of its
discovery or receipt of notice that such breach has occurred (whichever
occurs earlier), shall cure the breach in all material respects or, subject
to the Mortgage Loan Purchase Agreement and Section 2.04 of this Agreement,
shall purchase the Mortgage Loan or any property acquired with respect
thereto from the Issuer; provided, however, that if there is a breach of any
representation set forth in the Mortgage Loan Purchase Agreement, and the
Mortgage Loan or the related property acquired with respect thereto has been
sold, then the Seller shall pay, in lieu of the Repurchase Price, any excess
of the Repurchase Price over the Net Liquidation Proceeds received upon such
sale. If the Net Liquidation Proceeds exceed the Repurchase Price, any
excess shall be paid to the Seller to the extent not required by law to be
paid to the borrower. Any such purchase by the Seller shall be made by
providing an amount equal to the Repurchase Price to the Securities
Administrator for deposit in the Payment Account and written notification
detailing the components of such Repurchase Price. The Depositor shall
submit to the Indenture Trustee and the Custodian a Request for Release, and
the Indenture Trustee shall cause the Custodian to release, upon receipt of
certification from the Securities Administrator that the Repurchase Price has
been deposited in the Payment Account, to the Seller the related Mortgage
File and the Indenture Trustee shall execute and deliver all instruments of
transfer or assignment furnished to it by the Seller, without recourse,
representation or warranty as are necessary to vest in the Seller title to
and rights under the Mortgage Loan or any property acquired with respect
thereto. Such purchase shall be deemed to have occurred on the date on which
the Repurchase Price in available funds is deposited in the Payment Account.
The Master Servicer shall amend the Mortgage Loan Schedule to reflect such
repurchase and shall promptly deliver to the Issuer, Indenture Trustee, the
Custodian and the Rating Agencies a copy of such amendment. Enforcement of
the obligation of the Seller to purchase (or substitute a Substitute Mortgage
Loan for) any Mortgage Loan or any property acquired with respect thereto (or
pay the Repurchase Price as set forth in the above proviso) as to which a
breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to the Issuer, the Noteholders or the
Indenture Trustee on their behalf.
Section 2.04. Substitution of Mortgage Loans. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this Agreement, the Seller may, no later than the date by which such purchase
by the Seller would otherwise be required, tender to the Indenture Trustee a
Substitute Mortgage Loan accompanied by a certificate of an authorized
officer of the Seller that such Substitute Mortgage Loan conforms to the
requirements set forth in the definition of "Substitute Mortgage Loan" in
this Agreement. The Indenture Trustee shall cause the Custodian to examine
the Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and the Indenture Trustee shall cause the Custodian to notify
the Seller, in writing, within five Business Days after receipt, whether or
not the documents relating to the Substitute Mortgage Loan satisfy the
requirements of Section 2.02. Within two Business Days after such
notification, the Seller shall provide to the Securities Administrator for
deposit in the Payment Account the amount, if any, by which the Outstanding
Principal Balance as of the next preceding Due Date of the Mortgage Loan for
which substitution is being made, after giving effect to the Scheduled
Principal due on such date, exceeds the Outstanding Principal Balance as of
such date of the Substitute Mortgage Loan, after giving effect to Scheduled
Principal due on such date, which amount shall be treated for the purposes of
this Agreement as if it were the payment by the Seller of the Repurchase
Price for the purchase of a Mortgage Loan by the Seller. After such
notification to the Seller and, if any such excess exists, upon receipt of
certification from the Securities Administrator that such excess has been
deposited in the Payment Account, the Indenture Trustee shall accept such
Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage
Loan hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and
any Principal Prepayments made thereon during such month shall be the
property of the Trust Estate and accrued interest for such month on the
Mortgage Loan for which the substitution is made and any Principal
Prepayments made thereon during such month shall be the property of the
Seller. The Scheduled Principal on a Substitute Mortgage Loan due on the Due
Date in the month of substitution shall be the property of the Seller and the
Scheduled Principal on the Mortgage Loan for which the substitution is made
due on such Due Date shall be the property of the Trust Estate. Upon
acceptance of the Substitute Mortgage Loan (and delivery to the Indenture
Trustee and the Custodian of a Request for Release for such Mortgage Loan),
the Indenture Trustee shall cause the Custodian to release to the Seller the
related Mortgage File related to any Mortgage Loan released pursuant to the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, and shall execute and deliver all instruments of transfer or
assignment, without recourse, representation or warranty in form as provided
to it as are necessary to vest in the Seller title to and rights under any
Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable. The Seller shall deliver to
the Custodian the documents related to the Substitute Mortgage Loan in
accordance with the provisions of the Mortgage Loan Purchase Agreement and
Subsections 2.01(b) and 2.02(b) of this Agreement, as applicable, with the
date of acceptance of the Substitute Mortgage Loan deemed to be the Closing
Date for purposes of the time periods set forth in those Subsections. The
representations and warranties set forth in the Mortgage Loan Purchase
Agreement shall be deemed to have been made by the Seller with respect to
each Substitute Mortgage Loan as of the date of acceptance of such Mortgage
Loan by the Indenture Trustee. The Master Servicer shall amend the Mortgage
Loan Schedule to reflect such substitution and shall provide a copy of such
amended Mortgage Loan Schedule to the Issuer, the Indenture Trustee, the
Custodian and the Rating Agencies.
Section 2.05. Representations and Warranties Concerning the Depositor.
The Depositor hereby represents and warrants to the Issuer, the Indenture
Trustee, the Master Servicer and the Securities Administrator as follows:
(i) the Depositor (a) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and (b) is qualified
and in good standing as a foreign corporation to do business in each
jurisdiction where such qualification is necessary, except where the failure
so to qualify would not reasonably be expected to have a material adverse
effect on the Depositor's business as presently conducted or on the
Depositor's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(ii) the Depositor has full corporate power to own its property, to carry on
its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(iii) the execution and delivery by the Depositor of this Agreement have been
duly authorized by all necessary corporate action on the part of the
Depositor; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or constitute
a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Depositor or its
properties or the articles of incorporation or by-laws of the Depositor,
except those conflicts, breaches or defaults which would not reasonably be
expected to have a material adverse effect on the Depositor's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(iv) the execution, delivery and performance by the Depositor of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except those consents, approvals,
notices, registrations or other actions as have already been obtained, given
or made;
(v) this Agreement has been duly executed and delivered by the Depositor
and, assuming due authorization, execution and delivery by the other parties
hereto, constitutes a valid and binding obligation of the Depositor
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to the knowledge
of the Depositor, threatened against the Depositor, before or by any court,
administrative agency, arbitrator or governmental body (i) with respect to
any of the transactions contemplated by this Agreement or
(vii) with respect to any other matter which in the judgment of the Depositor
will be determined adversely to the Depositor and will if determined
adversely to the Depositor materially and adversely affect the Depositor's
ability to enter into this Agreement or perform its obligations under this
Agreement; and the Depositor is not in default with respect to any order of
any court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this
Agreement; and
(viii)......immediately prior to the transfer and assignment to the Issuer,
each Mortgage Note and each Mortgage were not subject to an assignment or
pledge, and the Depositor had good and marketable title to and was the sole
owner thereof and had full right to transfer and sell such Mortgage Loan to
the Issuer free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest.
Section 2.06. Representations and Warranties Regarding the Master
Servicer. The Master Servicer represents and warrants to the Issuer, the
Depositor, the Seller and the Indenture Trustee for the benefit of the
Noteholders, as follows:
(i) The Master Servicer is a national banking association duly organized,
validly existing and in good standing under the laws of the Untied States of
America and has the corporate power to own its assets and to transact the
business in which it is currently engaged. The Master Servicer is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure to so qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Master Servicer
or the validity or enforceability of this Agreement;
(ii) The Master Servicer has the power and authority to make, execute,
deliver and perform this Agreement and all of the transactions contemplated
under this Agreement, and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of the Master Servicer enforceable in accordance with its
terms, except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies;
(iii) The Master Servicer is not required to obtain the consent of any other
Person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consent, license, approval
or authorization, or registration or declaration, as shall have been obtained
or filed, as the case may be;
(iv) The execution and delivery of this Agreement and the performance of the
transactions contemplated hereby by the Master Servicer will not violate any
provision of any existing law or regulation or any order or decree of any
court applicable to the Master Servicer or any provision of the certificate
of incorporation or bylaws of the Master Servicer, or constitute a material
breach of any mortgage, indenture, contract or other agreement to which the
Master Servicer is a party or by which the Master Servicer may be bound; and
(v) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending (other than litigation
with respect to which pleadings or documents have been filed with a court,
but not served on the Master Servicer), or to the knowledge of the Master
Servicer threatened, against the Master Servicer or any of its properties or
with respect to this Agreement or the Notes or the Certificates which, to the
knowledge of the Master Servicer, has a reasonable likelihood of resulting in
a material adverse effect on the transactions contemplated by this Agreement.
The foregoing representations and warranties shall survive any
termination of the Master Servicer hereunder.
Section 2.07. Assignment of Agreement. The Seller, the Depositor and the
Master Servicer hereby acknowledge and agree that the Issuer may assign its
interest under this Agreement to the Indenture Trustee, for the benefit of
the Noteholders, as may be required to effect the purposes of the Indenture,
without further notice to, or consent of, the Seller, the Depositor or the
Master Servicer, and the Indenture Trustee shall succeed to such of the
rights of the Issuer hereunder as shall be so assigned. The Issuer shall,
pursuant to the Indenture, assign all of its right, title and interest in and
to the Mortgage Loans and its right to exercise the remedies created by
Article II of this Agreement for breaches of the representations, warranties,
agreements and covenants of the Seller contained in the Mortgage Loan
Purchase Agreement, to the Indenture Trustee, for the benefit of the
Noteholders. The Seller agrees that, upon such assignment to the Indenture
Trustee, such representations, warranties, agreements and covenants will run
to and be for the benefit of the Indenture Trustee and the Indenture Trustee
may enforce, without joinder of the Depositor or the Issuer, the repurchase
obligations of the Seller set forth herein and in the Mortgage Loan Purchase
Agreement with respect to breaches of such representations, warranties,
agreements and covenants. Any such assignment to the Indenture Trustee shall
not be deemed to constitute an assignment to the Indenture Trustee of any
obligations or liabilities of the Issuer under this Agreement.
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. Master Servicer. The Master Servicer shall supervise,
monitor and oversee the obligations of the Servicer to service and administer
the Mortgage Loans in accordance with the terms of the MortgageIT Servicing
Agreement and shall have full power and authority to do any and all things
which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master
Servicing Practices. Furthermore, the Master Servicer shall oversee and
consult with the Servicer as necessary from time-to-time to carry out the
Master Servicer's obligations hereunder, shall receive, review and evaluate
all reports, information and other data provided to the Master Servicer by
the Servicer and shall cause the Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by such
Servicer under the MortgageIT Servicing Agreement. The Master Servicer shall
independently and separately monitor the Servicer's servicing activities with
respect to the Mortgage Loans, reconcile the results of such monitoring with
such information provided in the previous sentence on a monthly basis and
coordinate corrective adjustments to the Servicer's and Master Servicer's
records, and based on such reconciled and corrected information, the Master
Servicer shall provide such information to the Securities Administrator as
shall be necessary in order for it to prepare the statements specified in
Section 7.03 of the Indenture, and prepare any other information and
statements required to be forwarded by the Master Servicer hereunder. The
Master Servicer shall reconcile the results of its Mortgage Loan monitoring
with the actual remittances of the Servicer pursuant to the MortgageIT
Servicing Agreement.
The Indenture Trustee shall furnish the Servicer and the Master
Servicer with any powers of attorney and other documents in form as provided
to it necessary or appropriate to enable the Servicer and the Master Servicer
to service and administer the related Mortgage Loans and REO Property. The
Indenture Trustee shall not be liable for the Servicer's or the Master
Servicer's use or misuse of such powers of attorney.
The Indenture Trustee shall provide access to the records and
documentation in possession of the Indenture Trustee regarding the related
Mortgage Loans and REO Property and the servicing thereof to the Noteholders,
the FDIC, and the supervisory agents and examiners of the FDIC, such access
being afforded only upon reasonable prior written request and during normal
business hours at the office of the Indenture Trustee. The Indenture Trustee
shall allow representatives of the above entities to photocopy any of the
records and documentation and shall provide equipment for that purpose at a
charge that covers the Indenture Trustee's actual costs.
The Indenture Trustee shall execute and deliver to the Servicer or the
Master Servicer, as applicable based on the requesting party, any court
pleadings, requests for trustee's sale or other documents necessary or
reasonably desirable to (i) the foreclosure or trustee's sale with respect to
a Mortgaged Property; (ii) any legal action brought to obtain judgment
against any Mortgagor on the Mortgage Note or Security Instrument; (iii)
obtain a deficiency judgment against the Mortgagor; or (iv) enforce any other
rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
Section 3.02. [Reserved]
Section 3.03. Monitoring of Servicer. (a) The Master Servicer shall be
responsible for reporting to the Issuer, the Indenture Trustee and the
Depositor the compliance by the Servicer with its duties under the MortgageIT
Servicing Agreement. In the review of the Servicer's activities, the Master
Servicer may rely upon an officer's certificate of the Servicer (or similar
document signed by an officer of the Servicer) with regard to such Servicer's
compliance with the terms of the MortgageIT Servicing Agreement. In the
event that the Master Servicer, in its judgment, determines that the Servicer
should be terminated in accordance with the MortgageIT Servicing Agreement,
or that a notice should be sent pursuant to the MortgageIT Servicing
Agreement with respect to the occurrence of an event that, unless cured,
would constitute grounds for such termination, the Master Servicer shall
notify the Depositor, the Issuer and the Indenture Trustee thereof and the
Master Servicer shall issue such notice or take such other action as it deems
appropriate.
(b) The Master Servicer, for the benefit of the Issuer, the Indenture
Trustee and the Noteholders, shall enforce the obligations of the Servicer
under the MortgageIT Servicing Agreement, and shall, in the event that the
Servicer fails to perform its obligations in accordance with the MortgageIT
Servicing Agreement, subject to the preceding paragraph, terminate the rights
and obligations of the Servicer thereunder and act as servicer of the related
Mortgage Loans or cause the Issuer and the Indenture Trustee to enter in to a
new MortgageIT Servicing Agreement with a successor Servicer selected by the
Master Servicer; provided, however, it is understood and acknowledged by the
parties hereto that there will be a period of transition (not to exceed 90
days) before the actual servicing functions can be fully transferred to such
successor Servicer. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of the MortgageIT Servicing
Agreement and the pursuit of other appropriate remedies, shall be in such
form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the
owner of the related Mortgage Loans. The Master Servicer shall pay the costs
of such enforcement at its own expense, provided that the Master Servicer
shall not be required to prosecute or defend any legal action except to the
extent that the Master Servicer shall have received reasonable indemnity for
its costs and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of the Servicer, appointment of a successor
servicer or the transfer and assumption of servicing by the Master Servicer
with respect to the MortgageIT Servicing Agreement (including, without
limitation, (i) all legal costs and expenses and all due diligence costs and
expenses associated with an evaluation of the potential termination of the
Servicer as a result of an event of default by the Servicer and (ii) all
costs and expenses associated with the complete transfer of servicing,
including all servicing files and all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
successor servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the successor service to service the Mortgage
Loans in accordance with the MortgageIT Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall
be entitled to reimbursement of such costs and expenses from the Payment
Account.
(d) The Master Servicer shall require the Servicer to comply with the
remittance requirements and other obligations set forth in the MortgageIT
Servicing Agreement.
(e) If the Master Servicer acts as Servicer, it will not assume liability
for the representations and warranties of the Servicer, if any, that it
replaces.
Section 3.04. Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions
insurance policy, affording coverage with respect to all directors, officers,
employees and other Persons acting on such Master Servicer's behalf, and
covering errors and omissions in the performance of the Master Servicer's
obligations hereunder. The errors and omissions insurance policy and the
fidelity bond shall be in such form and amount generally acceptable for
entities serving as master servicers or trustees.
Section 3.05. Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority to do any
and all things that it may deem necessary or desirable in connection with the
master servicing and administration of the Mortgage Loans, including but not
limited to the power and authority (i) to execute and deliver, on behalf of
the Issuer, Noteholders and the Indenture Trustee, customary consents or
waivers and other instruments and documents, (ii) to consent to transfers of
any Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages, (iii) to collect any Insurance Proceeds and Liquidation Proceeds,
and (iv) to effectuate foreclosure or other conversion of the ownership of
the Mortgaged Property securing any Mortgage Loan, in each case, in
accordance with the provisions of this Agreement and the MortgageIT Servicing
Agreement, as applicable. The Indenture Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer or the Servicer to execute and
deliver instruments of satisfaction or cancellation, or of partial or full
release or discharge, and to foreclose upon or otherwise liquidate Mortgaged
Property, and to appeal, prosecute or defend in any court action relating to
the Mortgage Loans or the Mortgaged Property, in accordance with the
MortgageIT Servicing Agreement and this Agreement, and the Indenture Trustee
shall execute and deliver such other documents, as the Master Servicer may
request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Indenture Trustee shall
have no liability for use or misuse of any such powers of attorney by the
Master Servicer or the Servicer). If the Master Servicer or the Indenture
Trustee has been advised that it is likely that the laws of the state in
which action is to be taken prohibit such action if taken in the name of the
Indenture Trustee or that the Indenture Trustee would be adversely affected
under the "doing business" or tax laws of such state if such action is taken
in its name, the Master Servicer shall join with the Indenture Trustee in the
appointment of a co-trustee pursuant to Section 6.10 of the Indenture. In
the performance of its duties hereunder, the Master Servicer shall be an
independent contractor and shall not, except in those instances where it is
taking action in the name of the Issuer or the Indenture Trustee, be deemed
to be the agent of the Issuer or the Indenture Trustee.
Section 3.06. Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the MortgageIT Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicer to enforce such clauses in accordance with the MortgageIT Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale
clause or such clause is otherwise not enforced in accordance with the
MortgageIT Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with the MortgageIT Servicing Agreement.
Section 3.07. Release of Mortgage Files. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Noteholders on the next Payment Date, the
Servicer will, if required under the MortgageIT Servicing Agreement, promptly
furnish to the Indenture Trustee two copies of a certification substantially
in the form of Exhibit B hereto signed by a Servicing Officer or in a
mutually agreeable electronic format which will, in lieu of a signature on
its face, originate from a Servicing Officer (which certification shall
include a statement to the effect that all amounts received in connection
with such payment that are required to be deposited in the Protected Account
maintained by the Servicer pursuant to the MortgageIT Servicing Agreement
have been so deposited) and shall request that the Indenture Trustee deliver
or cause the Custodian to deliver to the Servicer the related Mortgage File.
Upon receipt of such certification and request, the Indenture Trustee shall
promptly release or cause the Custodian to release the related Mortgage File
to the Servicer and the Indenture Trustee shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in
full, the Servicer is authorized, to give, as agent for the Indenture
Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan,
an instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the
Person or Persons entitled thereto against receipt therefor of such payment,
it being understood and agreed that no expenses incurred in connection with
such instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with the MortgageIT Servicing
Agreement, the Indenture Trustee shall execute such documents as shall be
prepared and furnished to the Indenture Trustee by the Servicer or the Master
Servicer (in form reasonably acceptable to the Indenture Trustee) and as are
necessary to the prosecution of any such proceedings. The Indenture Trustee
shall, upon the request of the Servicer or the Master Servicer, and delivery
to the Indenture Trustee, of two copies of a request for release signed by a
Servicing Officer substantially in the form of Exhibit B (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release or cause the Custodian to
release the related Mortgage File held in its or the Custodian's possession
or control to the Servicer or the Master Servicer, as applicable. The
Servicer or the Master Servicer shall be obligated to return the Mortgage
File to the Indenture Trustee or the Custodian when the need therefor by the
Servicer or the Master Servicer, as it reasonably determines, no longer
exists unless the Mortgage Loan shall be liquidated, in which case, upon
receipt of a certificate of a Servicing Officer similar to that hereinabove
specified, the Mortgage File shall be released by the Indenture Trustee or
the Custodian to the Servicer or the Master Servicer.
Section 3.08. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Issuer and Indenture Trustee.
(a) The Master Servicer shall transmit and the Servicer (to the extent
required by the MortgageIT Servicing Agreement) shall transmit to the
Indenture Trustee such documents and instruments coming into the possession
of the Master Servicer or the Servicer from time to time as are required by
the terms hereof, or in the case of the Servicer, the MortgageIT Servicing
Agreement, to be delivered to the Indenture Trustee. Any funds received by
the Master Servicer or by the Servicer in respect of any Mortgage Loan or
which otherwise are collected by the Master Servicer or by the Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan
shall be held for the benefit of the Issuer and the Indenture Trustee subject
to the Master Servicer's right to retain or withdraw from the Payment Account
the Master Servicer Compensation and other amounts provided in this Agreement
and the right of the Servicer to retain its Servicing Fee and other amounts
as provided in the MortgageIT Servicing Agreement. The Master Servicer
shall, and (to the extent provided in the MortgageIT Servicing Agreement)
shall cause the Servicer to, provide access to information and documentation
regarding the Mortgage Loans to the Issuer, the Indenture Trustee, and their
respective agents and accountants at any time upon reasonable request and
during normal business hours, and to Noteholders that are savings and loan
associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and
Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office
of Thrift Supervision or other regulatory authority, such access to be
afforded without charge but only upon reasonable request in writing and
during normal business hours at the offices of the Master Servicer designated
by it. In fulfilling such a request the Master Servicer shall not be
responsible for determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Issuer, the Indenture Trustee and the Noteholders and shall be and remain
the sole and exclusive property of the Issuer, subject to the pledge to the
Indenture Trustee; provided, however, that the Master Servicer and the
Servicer shall be entitled to setoff against, and deduct from, any such funds
any amounts that are properly due and payable to the Master Servicer or the
Servicer under this Agreement or the MortgageIT Servicing Agreement.
Section 3.09. Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicer under the MortgageIT Servicing Agreement to
maintain or cause to be maintained standard fire and casualty insurance and,
where applicable, flood insurance, all in accordance with the provisions of
the MortgageIT Servicing Agreement. It is understood and agreed that such
insurance shall be with insurers meeting the eligibility requirements set
forth in the MortgageIT Servicing Agreement and that no earthquake or other
additional insurance is to be required of any Mortgagor or to be maintained
on property acquired in respect of a defaulted loan, other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance.
(b) Pursuant to Section 4.01 and 4.04, any amounts collected by the
Servicer or the Master Servicer, under any insurance policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the
MortgageIT Servicing Agreement) shall be deposited into the Payment Account,
subject to withdrawal pursuant to Section 4.04 and 4.05. Any cost incurred
by the Master Servicer or the Servicer in maintaining any such insurance if
the Mortgagor defaults in its obligation to do so shall be added to the
amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be
taken into account for purposes of calculating the distributions to be made
to Noteholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Section 4.04 and 4.05.
Section 3.10. Presentment of Claims and Collection of Proceeds. The
Master Servicer shall (to the extent provided in the MortgageIT Servicing
Agreement) cause the Servicer to prepare and present on behalf of the Issuer,
the Indenture Trustee and the Noteholders all claims under the Insurance
Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to the Servicer and remitted to the Master Servicer)
in respect of such policies, bonds or contracts shall be promptly deposited
in the Payment Account upon receipt, except that any amounts realized that
are to be applied to the repair or restoration of the related Mortgaged
Property as a condition precedent to the presentation of claims on the
related Mortgage Loan to the insurer under any applicable Insurance Policy
need not be so deposited (or remitted).
Section 3.11. Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit the Servicer (to the
extent such action is prohibited under the MortgageIT Servicing Agreement) to
take, any action that would result in noncoverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions of
the Master Servicer or the Servicer, would have been covered thereunder. The
Master Servicer shall use its best reasonable efforts to cause the Servicer
(to the extent required under the MortgageIT Servicing Agreement) to keep in
force and effect (to the extent that the Mortgage Loan requires the Mortgagor
to maintain such insurance), primary mortgage insurance applicable to each
Mortgage Loan in accordance with the provisions of this Agreement and the
MortgageIT Servicing Agreement, as applicable. The Master Servicer shall
not, and shall not permit the Servicer (to the extent required under the
MortgageIT Servicing Agreement) to, cancel or refuse to renew any such
Primary Mortgage Insurance Policy that is in effect at the date of the
initial issuance of the Mortgage Note and is required to be kept in force
hereunder except in accordance with the provisions of this Agreement and the
MortgageIT Servicing Agreement, as applicable.
(b) The Master Servicer agrees to cause the Servicer (to the extent
required under the MortgageIT Servicing Agreement) to present, on behalf of
the Issuer, the Indenture Trustee and the Noteholders, claims to the insurer
under any Primary Mortgage Insurance Policies and, in this regard, to take
such reasonable action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 4.01 and 4.04, any amounts collected by the Master
Servicer or the Servicer under any Primary Mortgage Insurance Policies shall
be deposited in the Payment Account, subject to withdrawal pursuant to
Sections 4.04 and 4.05.
Section 3.12. Indenture Trustee to Retain Possession of Certain Insurance
Policies and Documents.
The Indenture Trustee shall retain or shall cause the Custodian to
retain possession and custody of the originals (to the extent available) of
any Primary Mortgage Insurance Policies, or certificate of insurance if
applicable, and any certificates of renewal as to the foregoing as may be
issued from time to time as contemplated by this Agreement. Until all
amounts distributable in respect of the Notes have been distributed in full
and the Indenture has been satisfied and discharged in accordance with
Section 4.10 of the Indenture, the Indenture Trustee shall also retain, or
shall cause the Custodian to retain, possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions of this
Agreement. The Master Servicer shall promptly deliver or cause to be
delivered to the Indenture Trustee upon the execution or receipt thereof the
originals of any Primary Mortgage Insurance Policies, any certificates of
renewal, and such other documents or instruments that constitute portions of
the Mortgage File that come into the possession of the Master Servicer from
time to time.
Section 3.13. Realization Upon Defaulted Mortgage Loans. For each
Mortgage Loan that comes into and continues in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments,
the Master Servicer shall cause the Servicer (to the extent required under
the MortgageIT Servicing Agreement) to either (i) foreclose upon, repossess
or otherwise comparably convert the ownership of Mortgaged Properties
securing such Mortgage Loans, all in accordance with the MortgageIT Servicing
Agreement or (ii) as an alternative to foreclosure, sell such defaulted
Mortgage Loans at fair market value to third-parties, if the Servicer
reasonably believes that such sale would maximize proceeds to the Trust (on a
present value basis) with respect to those Mortgage Loans. The Servicer
shall be responsible for all costs and expenses incurred by it in any such
proceedings or sale; provided, however, that such costs and expenses will be
recoverable as servicing advances by the Servicer as contemplated in Section
4.05.
Section 3.14. Compensation for the Master Servicer.
On each Payment Date the Master Servicer will be entitled to all income
and gain realized from any investment of funds in the Payment Account,
pursuant to Article IV, for the performance of its activities hereunder (the
"Master Servicer Compensation"). In addition, the Master Servicer shall be
entitled to receive the Master Servicing Fee in accordance with Section 4.05
as compensation for its services in connection with master servicing of the
Mortgage Loans. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not
including any prepayment premium or penalty) shall be retained by the
Servicer and shall not be deposited in the Protected Account. The Master
Servicer shall be required to pay all expenses incurred by it in connection
with its activities hereunder and shall not be entitled to reimbursement
therefor except as provided in this Agreement.
Section 3.15. REO Property.
(a) In the event the Trust Estate acquires ownership of any REO Property in
respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Indenture Trustee, or to its nominee, on behalf of the
Noteholders. The Master Servicer shall, to the extent provided in the
MortgageIT Servicing Agreement, cause the Servicer to sell any REO Property
as expeditiously as possible and in accordance with the provisions of the
MortgageIT Servicing Agreement, as applicable. Pursuant to its efforts to
sell such REO Property, the Master Servicer shall cause the Servicer to
protect and conserve, such REO Property in the manner and to the extent
required by the MortgageIT Servicing Agreement.
(b) The Master Servicer shall, to the extent required by the MortgageIT
Servicing Agreement, cause the Servicer to deposit all funds collected and
received in connection with the operation of any REO Property in the
Protected Account.
(c) The Master Servicer and the Servicer, upon the final disposition of any
REO Property, shall be entitled to reimbursement for any related unreimbursed
Monthly Advances and other unreimbursed advances as well as any unpaid
Servicing Fees from Liquidation Proceeds received in connection with the
final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or
paid, as the case may be, prior to final disposition, out of any net rental
income or other net amounts derived from such REO Property.
(d) To the extent provided in the MortgageIT Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of
any payment to the Master Servicer and the Servicer as provided above shall
be deposited in the Protected Account on or prior to the Determination Date
in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the
Payment Account on the next succeeding Servicer Remittance Date.
Section 3.16. Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Issuer, the Indenture Trustee
and the Rating Agencies on or before March 1 of each year, commencing on
March 1, 2005, an Officer's Certificate, certifying that with respect to the
period ending December 31 of the prior year: (i) such Servicing Officer has
reviewed the activities of such Master Servicer during the preceding calendar
year or portion thereof and its performance under this Agreement, (ii) to the
best of such Servicing Officer's knowledge, based on such review, such Master
Servicer has performed and fulfilled its duties, responsibilities and
obligations under this Agreement in all material respects throughout such
year, or, if there has been a default in the fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof, (iii) nothing has come
to the attention of such Servicing Officer to lead such Servicing Officer to
believe that the Servicer has failed to perform any of its duties,
responsibilities and obligations under the MortgageIT Servicing Agreement in
all material respects throughout such year, or, if there has been a material
default in the performance or fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any Noteholder upon
request, by the Master Servicer or by the Indenture Trustee at the Master
Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Indenture
Trustee with such statement or (ii) the Indenture Trustee shall be unaware of
the Master Servicer's failure to provide such statement).
Section 3.17. Annual Independent Accountant's Servicing Report. If the
Master Servicer has, during the course of any fiscal year, directly serviced
any of the Mortgage Loans, then the Master Servicer at its expense shall
cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Issuer, the Indenture Trustee, the
Rating Agencies and the Depositor on or before March 1 of each year,
commencing on March 1, 2005 to the effect that, with respect to the most
recently ended fiscal year, such firm has examined certain records and
documents relating to the Master Servicer's performance of its servicing
obligations under this Agreement and pooling and servicing and trust
agreements in material respects similar to this Agreement and to each other
and that, on the basis of such examination conducted substantially in
compliance with the audit program for mortgages serviced for ▇▇▇▇▇▇▇ Mac or
the Uniform Single Attestation Program for Mortgage Bankers, such firm is of
the opinion that the Master Servicer's activities have been conducted in
compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in
such statement and (iii) such exceptions that the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages Serviced by
▇▇▇▇▇▇▇ Mac requires it to report. Copies of such statements shall be
provided to any Noteholder upon request by the Master Servicer, or by the
Indenture Trustee at the expense of the Master Servicer if the Master
Servicer shall fail to provide such copies. If such report discloses
exceptions that are material, the Master Servicer shall advise the Indenture
Trustee whether such exceptions have been or are susceptible of cure, and
will take prompt action to do so.
Section 3.18. Reports Filed with Securities and Exchange Commission.
Within 15 days after each Payment Date, the Securities Administrator shall,
in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System ("▇▇▇▇▇"), a Form 8-K (or
other comparable Form containing the same or comparable information or other
information mutually agreed upon) with a copy of the statement to the
Noteholders for such Payment Date as an exhibit thereto. Prior to January 30
in any year, the Securities Administrator shall, in accordance with industry
standards and only if instructed by the Depositor, file a Form 15 Suspension
Notice with respect to the Trust Estate, if applicable. Prior to (i) March
15, 2005 and (ii) unless and until a Form 15 Suspension Notice shall have
been filed, prior to March 15 of each year thereafter, the Master Servicer
shall provide the Securities Administrator with a Master Servicer
Certification, together with a copy of the annual independent accountant's
servicing report and annual statement of compliance of the Servicer, in each
case, required to be delivered pursuant to the MortgageIT Servicing
Agreement, and, if applicable, the annual independent accountant's servicing
report and annual statement of compliance to be delivered by the Master
Servicer pursuant to Sections 3.16 and 3.17. Prior to (i) March 31, 2005, or
such earlier filing date as may be required by the Commission, and (ii)
unless and until a Form 15 Suspension Notice shall have been filed, March 31
of each year thereafter, or such earlier filing date as may be required by
the Commission, the Securities Administrator shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust. Such
Form 10-K shall include the Master Servicer Certification and other
documentation provided by the Master Servicer pursuant to the second
preceding sentence. The Depositor hereby grants to the Securities
Administrator a limited power of attorney to execute and file each such
document on behalf of the Depositor. Such power of attorney shall continue
until either the earlier of (i) receipt by the Securities Administrator from
the Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Estate. The Depositor agrees to promptly furnish to
the Securities Administrator, from time to time upon request, such further
information, reports and financial statements within its control related to
this Agreement and the Mortgage Loans as the Securities Administrator
reasonably deems appropriate to prepare and file all necessary reports with
the Commission. The Securities Administrator shall have no responsibility to
file any items other than those specified in this Section 3.18; provided,
however, the Securities Administrator will cooperate with the Depositor and
the Issuer in connection with any additional filings with respect to the
Trust Estate as the Depositor deems necessary under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Fees and expenses incurred by
the Securities Administrator in connection with this Section 3.18 shall not
be reimbursable from the Trust Estate.
Section 3.19. The Company. On the Closing Date, the Company will receive
from the Depositor a payment of $5,000.
Section 3.20. UCC. The Depositor shall inform the Indenture Trustee in
writing of any Uniform Commercial Code financing statements that were filed
on the Closing Date in connection with the Trust Estate with stamped recorded
copies of such financing statements to be delivered to the Indenture Trustee
promptly upon receipt by the Depositor. If directed by the Depositor in
writing, the Indenture Trustee will execute any continuation statements
prepared by the Depositor and deliver them as directed solely at the expense
of the Depositor. The Depositor shall file any financing statements or
amendments thereto required by any change in the Uniform Commercial Code.
Section 3.21. Optional Purchase of Defaulted Mortgage Loans.
(a) With respect to any Mortgage Loan which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, the Servicer shall have the right to purchase such Mortgage Loan
from the Trust Estate at a price equal to the Repurchase Price; provided
however (i) that such Mortgage Loan is still 90 days or more delinquent or is
an REO Property as of the date of such purchase and (ii) this purchase
option, if not theretofore exercised, shall terminate on the date prior to
the last day of the related Calendar Quarter. This purchase option, if not
exercised, shall not be thereafter reinstated unless the delinquency is cured
and the Mortgage Loan thereafter again becomes 90 days or more delinquent or
becomes an REO Property, in which case the option shall again become
exercisable as of the first day of the related Calendar Quarter.
(b) If at any time the Servicer remits to the Master Servicer a payment for
deposit in the Payment Account covering the amount of the Repurchase Price
for such a Mortgage Loan, and the Master Servicer provides to the Indenture
Trustee a certification signed by a Servicing Officer stating that the amount
of such payment has been deposited in the Payment Account, then the Indenture
Trustee shall execute the assignment of such Mortgage Loan to the Servicer,
without recourse, representation or warranty and the Servicer shall succeed
to all of the Indenture Trustee's right, title and interest in and to such
Mortgage Loan, and all security and documents relative thereto. Such
assignment shall be an assignment outright and not for security. The
Servicer will thereupon own such Mortgage, and all such security and
documents, free of any further obligation to the Issuer, the Indenture
Trustee or the Noteholders with respect thereto.
Section 3.22. Monthly Advances. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date is delinquent other than as a result
of application of the Relief Act and for which the Servicer was required to
make an advance pursuant to the MortgageIT Servicing Agreement exceeds the
amount deposited in the Payment Account which will be used for an advance
with respect to such Mortgage Loan, the Master Servicer will deposit in the
Payment Account not later than the Payment Account Deposit Date immediately
preceding the related Payment Date an amount equal to such deficiency, net of
the Servicing Fee for such Mortgage Loan except to the extent the Master
Servicer determines any such advance to be a Nonrecoverable Advance. Subject
to the foregoing, the Master Servicer shall continue to make such advances
through the date that the Servicer is required to do so under the MortgageIT
Servicing Agreement. If the Master Servicer deems an advance to be a
Nonrecoverable Advance, on the Payment Account Deposit Date, the Master
Servicer shall present an Officer's Certificate to the Securities
Administrator (i) stating that the Master Servicer elects not to make a
Monthly Advance in a stated amount and (ii) detailing the reason it deems the
advance to be a Nonrecoverable Advance.
Section 3.23. Compensating Interest Payments. The Master Servicer shall
deposit in the Payment Account not later than each Payment Account Deposit
Date an amount equal to the lesser of (i) the sum of the aggregate amounts
required to be paid by the Servicer under the Servicing Agreement with
respect to subclauses (a) and (b) of the definition of Interest Shortfalls
with respect to the Mortgage Loans for the related Prepayment Period, and not
so paid by the Servicer and (ii) the Master Servicing Fee for such Payment
Date (such amount, the "Compensating Interest Payment"). The Master Servicer
shall not be entitled to any reimbursement of any Compensating Interest
Payment.
ARTICLE IV
Accounts
Section 4.01. Protected Accounts. (a) The Master Servicer shall enforce
the obligation of the Servicer to establish and maintain a Protected Account
in accordance with the MortgageIT Servicing Agreement, with records to be
kept with respect thereto on a Mortgage Loan by Mortgage Loan basis, into
which account shall be deposited within 48 hours (or as of such other time
specified in the MortgageIT Servicing Agreement) of receipt, all collections
of principal and interest on any Mortgage Loan and any REO Property received
by the Servicer, including Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds, and advances made from the Servicer's own funds (less
servicing compensation as permitted by the MortgageIT Servicing Agreement in
the case of the Servicer) and all other amounts to be deposited in the
Protected Account. The Protected Account shall be an Eligible Account. The
Servicer is hereby authorized to make withdrawals from and deposits to the
Protected Account for purposes required or permitted by this Agreement. To
the extent provided in the MortgageIT Servicing Agreement, the Protected
Account shall be held by a Designated Depository Institution and segregated
on the books of such institution in the name of the Indenture Trustee for the
benefit of the Noteholders.
(b) To the extent provided in the MortgageIT Servicing Agreement, amounts
on deposit in the Protected Account may be invested in Permitted Investments
in the name of the Indenture Trustee for the benefit of Noteholders and,
except as provided in the preceding paragraph, not commingled with any other
funds. Such Permitted Investments shall mature, or shall be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the Payment Account, and shall be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the Servicer
under the MortgageIT Servicing Agreement, and the risk of loss of moneys
required to be distributed to the Noteholders resulting from such investments
shall be borne by and be the risk of the Servicer. The Servicer (to the
extent required by the MortgageIT Servicing Agreement) shall deposit the
amount of any such loss in the Protected Account within two Business Days of
receipt of notification of such loss but not later than the second Business
Day prior to the Payment Date on which the moneys so invested are required to
be distributed to the Noteholders.
(c) To the extent required by the MortgageIT Servicing Agreement and
subject to this Article IV, on or before each Servicer Remittance Date, the
Servicer shall withdraw or shall cause to be withdrawn from its Protected
Account and shall immediately deposit or cause to be deposited in the Payment
Account amounts representing the following collections and payments (other
than with respect to principal of or interest on the Mortgage Loans due on or
before the Cut-off Date):
(i) Scheduled Payments on the Mortgage Loans received or any related
portion thereof advanced by the Servicer pursuant to the MortgageIT Servicing
Agreement which were due on or before the related Due Date, net of the amount
thereof comprising the Servicing Fee or any fees with respect to any
lender-paid primary mortgage insurance policy;
(ii) Principal Prepayments in full and any Liquidation Proceeds received by
the Servicer with respect to the Mortgage Loans in the related Prepayment
Period, with interest to the date of prepayment or liquidation, net of the
amount thereof comprising the Servicing Fee;
(iii) Principal Prepayments in part received by the Servicer for the Mortgage
Loans in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals may be made from the Protected Account only to make
remittances as provided in Section 4.01(c), 4.04 and 4.05; to reimburse the
Master Servicer or the Servicer for Monthly Advances which have been
recovered by subsequent collections from the related Mortgagor; to remove
amounts deposited in error; to remove fees, charges or other such amounts
deposited on a temporary basis; or to clear and terminate the account at the
termination of this Agreement in accordance with Section 7.10. As provided
in Sections 4.01(a) and 4.04(b) certain amounts otherwise due to the Servicer
may be retained by it and need not be deposited in the Payment Account.
Section 4.02. [Reserved].
Section 4.03. [Reserved].
Section 4.04. Payment Account. (a) The Securities Administrator shall
establish and maintain in the name of the Indenture Trustee, for the benefit
of the Noteholders, the Payment Account as a segregated trust account or
accounts. The Securities Administrator will deposit in the Payment Account as
identified by the Securities Administrator and as received by the Securities
Administrator, the following amounts:
(i) Any amounts withdrawn from the Protected Account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds received by or on
behalf of the Securities Administrator or which were not deposited in the
Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans purchased by
the Seller pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02
or 2.03 hereof, any amounts which are to be treated pursuant to Section 2.04
of this Agreement as the payment of a Repurchase Price in connection with the
tender of a Substitute Mortgage Loan by the Seller and the Repurchase Price
with respect to any Mortgage Loans purchased by the Servicer pursuant to
Section 3.21;
(v) Any amounts required to be deposited by the Master Servicer with
respect to losses on investments of deposits in the Payment Account; and
(vi) Any other amounts received by or on behalf of the Securities
Administrator and required to be deposited in the Payment Account pursuant to
this Agreement.
(b) The requirements for crediting the Payment Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of (i) prepayment or late payment charges
or assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges and (ii) the items
enumerated in Subsections 4.05(a)(i), (ii), (iii), (iv), (vi), (vii), (viii),
(ix), (x), (xi) and (xii), need not be remitted by the Master Servicer or
Servicer to the Securities Administrator for deposit in the Payment Account.
In the event that the Master Servicer shall remit or cause to be remitted to
the Securities Administrator for deposit to the Payment Account any amount
not required to be credited thereto, the Securities Administrator, upon
receipt of a written request therefor signed by a Servicing Officer of the
Master Servicer, shall promptly transfer such amount to the Master Servicer,
any provision herein to the contrary notwithstanding.
(c) The Payment Account shall constitute a non-interest bearing trust
account of the Trust Estate segregated on the books of the Securities
Administrator and held by the Securities Administrator in trust, and the
Payment Account and the funds deposited therein shall not be subject to, and
shall be protected from, all claims, liens, and encumbrances of any creditors
or depositors of the Securities Administrator (whether made directly, or
indirectly through a liquidator or receiver of the Securities
Administrator). The Payment Account shall be an Eligible Account.
(d) The amount at any time credited to the Payment Account shall be (i)
held in cash or (ii) invested, in the name of the Indenture Trustee, for the
benefit of the Noteholders, but only in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Payment Date if the obligor for such Permitted Investment is the
Securities Administrator, or if such obligor is any other Person, the
Business Day preceding such Payment Date. All investment earnings on amounts
on deposit in the Payment Account or benefit from funds uninvested therein
from time to time shall be for the account of the Master Servicer. The
Securities Administrator shall remit all investment earnings from the Payment
Account to the Master Servicer on each Payment Date. If there is any loss on
a Permitted Investment, the Master Servicer shall remit the amount of the
loss to the Securities Administrator who shall deposit such amount in the
Payment Account.
(e) The Securities Administrator or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Securities
Administrator's economic self-interest for (i) servicing as investment
advisor, administrator, shareholder, servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments, (ii)
using Affiliates to effect transactions in certain Permitted Investments and
(iii) effecting transactions in certain Permitted Investments. Such
compensation shall not be considered an amount that is reimbursable or
payable pursuant to Section 4.05.
Section 4.05. Permitted Withdrawals and Transfers from the Payment
Account. (a) The Securities Administrator will, from time to time on demand
of the Master Servicer, make or cause to be made such withdrawals or
transfers from the Payment Account as the Master Servicer has designated for
such transfer or withdrawal pursuant to this Agreement and the Servicing
Agreement or as the Securities Administrator has instructed hereunder for the
following purposes (limited in the case of amounts due the Master Servicer to
those not withdrawn from the Payment Account as certified by the Securities
Administrator in accordance with the terms of this Agreement but not in any
order of priority):
(i) to reimburse the Master Servicer or the Servicer for any Monthly
Advance of its own funds, the right of the Master Servicer or the Servicer to
reimbursement pursuant to this subclause (i) being limited to amounts
received on a particular Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which
represent late payments or recoveries of the principal of or interest on such
Mortgage Loan respecting which such Monthly Advance was made;
(ii) to reimburse the Master Servicer or the Servicer from Insurance
Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan for
amounts expended by the Master Servicer or such Servicer in good faith in
connection with the restoration of the related Mortgaged Property which was
damaged by an Uninsured Cause or in connection with the liquidation of such
Mortgage Loan;
(iii) to reimburse the Master Servicer or the Servicer from Insurance
Proceeds relating to a particular Mortgage Loan for insured expenses incurred
with respect to such Mortgage Loan and to reimburse the Master Servicer or
the Servicer from Liquidation Proceeds from a particular Mortgage Loan for
Liquidation Expenses incurred with respect to such Mortgage Loan; provided
that the Master Servicer shall not be entitled to reimbursement for
Liquidation Expenses with respect to a Mortgage Loan to the extent that (i)
any amounts with respect to such Mortgage Loan were paid as Excess
Liquidation Proceeds pursuant to clause (viii) of this Subsection 4.05 (a) to
the Master Servicer; and (ii) such Liquidation Expenses were not included in
the computation of such Excess Liquidation Proceeds;
(iv) to reimburse the Master Servicer or the Servicer for advances of funds
(other than Monthly Advances) made with respect to the Mortgage Loans, and
the right to reimbursement pursuant to this subclause being limited to
amounts received on the related Mortgage Loan (including, for this purpose,
the Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds)
which represent late recoveries of the payments for which such advances were
made;
(v) to reimburse the Master Servicer or the Servicer for any Monthly
Advance or advance, after a Realized Loss has been allocated with respect to
the related Mortgage Loan if the Monthly Advance or advance has not been
reimbursed pursuant to clauses (i) and (iv);
(vi) to pay the Master Servicer as set forth in Section 3.14; provided
however, that the Master Servicer shall be obligated to pay from its own
funds any amounts which it is required to pay under Section 5.03;
(vii) to reimburse the Master Servicer for expenses, costs and liabilities
incurred by and reimbursable to it pursuant to Sections 3.03, 5.04(c) and
(d), to the extent that the Master Servicer has not already reimbursed itself
for such amounts from the Payment Account;
(viii)......to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by
the Servicer;
(ix) to reimburse or pay the Servicer any such amounts as are due thereto
under the Servicing Agreement and have not been retained by or paid to the
Servicer, to the extent provided in the Servicing Agreement;
(x) to reimburse or pay the Indenture Trustee, the Owner Trustee and the
Securities Administrator any amounts due or expenses, costs and liabilities
incurred by or reimbursable to it pursuant to this Agreement, the Indenture
and the Trust Agreement, to the extent such amounts have not already been
previously paid or reimbursed to such party from the Payment Account;
(xi) to remove amounts deposited in error; and
(xii) to clear and terminate the Payment Account pursuant to Section 7.10.
(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Payment Account pursuant to subclauses (i) through
(iv) or with respect to any such amounts which would have been covered by
such subclauses had the amounts not been retained by the Master Servicer
without being deposited in the Payment Account under Section 4.04(b).
(c) On each Payment Date, pursuant to Section 3.05 of the Indenture, the
Securities Administrator shall distribute the Available Funds to the extent
on deposit in the Payment Account to the Holders of the Notes, in accordance
with Section 3.05 of the Indenture.
ARTICLE V
The Master Servicer
Section 5.01. Liabilities of the Master Servicer. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 5.02. Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its existence,
rights and franchises as a corporation under the laws of the state of its
incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Agreement, the Notes or any of the Mortgage Loans and to perform its duties
under this Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation
to which the Master Servicer shall be a party, or any Person succeeding to
the business of the Master Servicer, shall be the successor of the Master
Servicer hereunder, without the execution or filing of any paper or further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 5.03. Indemnification of the Indenture Trustee, Owner Trustee,
the Master Servicer and the Securities Administrator. The Master Servicer
agrees to indemnify the Indenture Trustee, Owner Trustee and Securities
Administrator (each an "Indemnified Person") for, and to hold them harmless
against, any loss, liability or expense (including reasonable legal fees and
disbursements of counsel) incurred on their part that may be sustained in
connection with, arising out of, or relating to, any claim or legal action
(including any pending or threatened claim or legal action) relating to this
Agreement, the Indenture, the MortgageIT Servicing Agreement, the Assignment
Agreement or the Notes or the powers of attorney delivered by the Indenture
Trustee hereunder (i) related to the Master Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) or
(ii) incurred by reason of the Master Servicer's willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason
of reckless disregard of obligations and duties hereunder, provided, in each
case, that with respect to any such claim or legal action (or pending or
threatened claim or legal action), the Indemnified Person shall have given
the Master Servicer and the Depositor written notice thereof promptly after
such Indemnified Person shall have with respect to such claim or legal action
knowledge thereof. The Master Servicer's failure to receive any such notice
shall not affect an Indemnified Persons' right to indemnification hereunder,
except to the extent the Master Servicer is materially prejudiced by such
failure to give notice. This indemnity shall survive the resignation or
removal of the Indenture Trustee, Owner Trustee, Master Servicer and the
Securities Administrator and the termination of this Agreement. The Seller
agrees to indemnify the Owner Trustee for any loss, liability or expense for
which the Depositor is required to indemnify the Owner Trustee pursuant to
Section 7.02 of the Trust Agreement, other than (x) any loss liability or
expense required to be covered by the Master Servicer pursuant to this
Section 5.03 (y) and any loss, liability or expense already paid by the
Depositor in accordance with Section 7.02 of the Trust Agreement.
Section 5.04. Limitations on Liability of the Master Servicer and
Others. Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 5.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to
the Indemnified Persons, the Depositor, the Trust Estate or the Noteholders
for taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however,
that this provision shall not protect the Master Servicer or any such Person
against any breach of warranties or representations made herein or any
liability which would otherwise be imposed by reason of such Person's willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the
Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer and any director, officer, employee or agent of the
Master Servicer shall be indemnified by the Trust Estate and held harmless
thereby against any loss, liability or expense (including reasonable legal
fees and disbursements of counsel) incurred on their part that may be
sustained in connection with, arising out of, or related to, any claim or
legal action (including any pending or threatened claim or legal action)
relating to this Agreement, the Indenture, the Notes or the MortgageIT
Servicing Agreement (except to the extent that the Master Servicer is
indemnified by the Servicer thereunder), other than (i) any such loss,
liability or expense related to the Master Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement), or
(ii) any such loss, liability or expense incurred by reason of the Master
Servicer's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties
under this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion
undertake any such action which it may deem necessary or desirable with
respect to this Agreement or the Indenture and the rights and duties of the
parties hereto and the interests of the Noteholders hereunder and
thereunder. In such event, the legal expenses and costs of such action and
any liability resulting therefrom shall be expenses, costs and liabilities of
the Trust Estate, and the Master Servicer shall be entitled to be reimbursed
therefor out of the Payment Account as provided by Section 4.05. Nothing in
this Subsection 5.04(d) shall affect the Master Servicer's obligation to
supervise, or to take such actions as are necessary to ensure, the servicing
and administration of the Mortgage Loans pursuant to Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement,
the Master Servicer shall not be required to investigate or make
recommendations concerning potential liabilities which the Trust Estate might
incur as a result of such course of action by reason of the condition of the
Mortgaged Properties but shall give written notice to the Indenture Trustee
if it has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of
the Servicer, except as otherwise expressly provided herein.
Section 5.05. Master Servicer Not to Resign. Except as provided in
Section 5.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of
Counsel addressed to the Indenture Trustee and the Issuer to such effect
delivered to the Indenture Trustee and the Issuer. No such resignation by
the Master Servicer shall become effective until the Company or the Indenture
Trustee or a successor to the Master Servicer reasonably satisfactory to the
Indenture Trustee and Company shall have assumed the responsibilities and
obligations of the Master Servicer in accordance with Section 6.02 hereof.
The Indenture Trustee shall notify the Rating Agencies of the resignation of
the Master Servicer.
Section 5.06. Successor Master Servicer. In connection with the
appointment of any successor master servicer or the assumption of the duties
of the Master Servicer, the Company or the Indenture Trustee may make such
arrangements for the compensation of such successor master servicer out of
payments on the Mortgage Loans as the Company and such successor master
servicer shall agree. If the successor master servicer does not agree that
such market value is a fair price, such successor master servicer shall
obtain two quotations of market value from third parties actively engaged in
the servicing of single-family mortgage loans. Notwithstanding the
foregoing, the compensation payable to a successor master servicer may not
exceed the compensation which the Master Servicer would have been entitled to
retain if the Master Servicer had continued to act as Master Servicer
hereunder.
Section 5.07. Sale and Assignment of Master Servicing. The Master
Servicer may sell and assign its rights and delegate its duties and
obligations in its entirety as Master Servicer under this Agreement and the
Company may terminate the Master Servicer without cause and select a new
Master Servicer; provided, however, that: (i) the purchaser or transferee
accepting such assignment and delegation (a) shall be a Person which shall be
qualified to master service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; (b)
shall have a net worth of not less than $10,000,000 (unless otherwise
approved by each Rating Agency pursuant to clause (ii) below); (c) shall be
reasonably satisfactory to the Indenture Trustee and Company (as evidenced in
a writing signed by the Indenture Trustee and Company); and (d) shall execute
and deliver to the Indenture Trustee an agreement, in form and substance
reasonably satisfactory to the Issuer and the Indenture Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it
as master servicer under this Agreement; (ii) each Rating Agency shall be
given prior written notice of the identity of the proposed successor to the
Master Servicer and each Rating Agency's rating of the Notes in effect
immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer, the Issuer and the Indenture Trustee; (iii) the Master Servicer
assigning and selling the master servicing shall deliver to the Issuer and
the Indenture Trustee an Officer's Certificate and an Opinion of Counsel
addressed to the Issuer and the Indenture Trustee, each stating that all
conditions precedent to such action under this Agreement have been completed
and such action is permitted by and complies with the terms of this
Agreement; and (iv) in the event the Master Servicer is terminated without
cause by the Company, the Company shall pay the terminated Master Servicer a
termination fee equal to 0.25% of the aggregate Scheduled Principal Balance
of the Mortgage Loans at the time the master servicing of the Mortgage Loans
is transferred to the successor Master Servicer. No such assignment or
delegation shall affect any liability of the Master Servicer arising prior to
the effective date thereof.
ARTICLE VI
Default
Section 6.01. Master Servicer Events of Default. "Master Servicer Event
of Default," wherever used herein, means any one of the following events
(whatever the reason for such Master Servicer Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) and only with respect
to the defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the Payment
Account any amount so required to be deposited pursuant to this Agreement
(other than a Monthly Advance), and such failure continues unremedied for a
period of three Business Days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any material respect
any other material covenants and agreements set forth in this Agreement to be
performed by it, which covenants and agreements materially affect the rights
of Noteholders, and such failure continues unremedied for a period of 60 days
after the date on which written notice of such failure, properly requiring
the same to be remedied, shall have been given to the Master Servicer by the
Indenture Trustee or to the Master Servicer and the Indenture Trustee by the
Holders of Notes aggregating at least 25% of the Note Principal Balance of
the Notes; or
(iii) There is entered against the Master Servicer a decree or order by a
court or agency or supervisory authority having jurisdiction in the premises
for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order is unstayed and in effect for a
period of 60 consecutive days, or an involuntary case is commenced against
the Master Servicer under any applicable insolvency or reorganization statute
and the petition is not dismissed within 60 days after the commencement of
the case; or
(iv) The Master Servicer consents to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or substantially all of its property; or the Master Servicer admits
in writing its inability to pay its debts generally as they become due, files
a petition to take advantage of any applicable insolvency or reorganization
statute, makes an assignment for the benefit of its creditors, or voluntarily
suspends payment of its obligations;
(v) The Master Servicer assigns or delegates its duties or rights under
this Agreement in contravention of the provisions permitting such assignment
or delegation under Sections 5.05 or 5.07; or
(vi) The Master Servicer fails to deposit, or cause to be deposited, in the
Payment Account any Monthly Advance (other than a Nonrecoverable Advance) by
5:00 p.m. New York City time on the Payment Account Deposit Date.
In each and every such case, so long as such Master Servicer Event of Default
with respect to the Master Servicer shall not have been remedied, either the
Indenture Trustee or the Holders of Notes aggregating at least 51% of the
Note Principal Balance of the Notes, by notice in writing to the Master
Servicer (and to the Indenture Trustee if given by such Noteholders), with a
copy to the Rating Agencies, and with the consent of the Company, may
terminate all of the rights and obligations (but not the liabilities) of the
Master Servicer under this Agreement and in and to the Mortgage Loans and/or
the REO Property serviced by the Master Servicer and the proceeds thereof.
Upon the receipt by the Master Servicer of the written notice, all authority
and power of the Master Servicer under this Agreement, whether with respect
to the Notes, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 6.02,
automatically and without further action pass to and be vested in the
Indenture Trustee pursuant to this Section 6.01; and, without limitation, the
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 and other instruments and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment
of the Mortgage Loans and related documents, or otherwise. The Master
Servicer agrees to cooperate with the Indenture Trustee in effecting the
termination of the Master Servicer's rights and obligations hereunder,
including, without limitation, the transfer to the Indenture Trustee of (i)
the property and amounts which are then or should be part of the Trust Estate
or which thereafter become part of the Trust Estate; and (ii) originals or
copies of all documents of the Master Servicer reasonably requested by the
Indenture Trustee to enable it to assume the Master Servicer's duties
thereunder. In addition to any other amounts which are then, or,
notwithstanding the termination of its activities under this Agreement, may
become payable to the Master Servicer under this Agreement, the Master
Servicer shall be entitled to receive, out of any amount received on account
of a Mortgage Loan or related REO Property, that portion of such payments
which it would have received as reimbursement under this Agreement if notice
of termination had not been given. The termination of the rights and
obligations of the Master Servicer shall not affect any obligations incurred
by the Master Servicer prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 6.01 shall occur of which a Responsible Officer
of the Indenture Trustee has received written notice or has actual knowledge,
the Indenture Trustee shall, by notice in writing to the Master Servicer,
which may be delivered by telecopy, immediately terminate all of the rights
and obligations of the Master Servicer thereafter arising under this
Agreement, but without prejudice to any rights it may have as a Noteholder or
to reimbursement of Monthly Advances and other advances of its own funds, and
the Indenture Trustee shall thereupon become the successor Master Servicer as
provided in Section 6.02 and carry out the duties of the Master Servicer,
including the obligation to make any Monthly Advance the nonpayment of which
was an Event of Default described in clause (vi) of this Section 6.01. Any
such action taken by the Indenture Trustee must be prior to the distribution
on the relevant Payment Date.
Section 6.02. Indenture Trustee to Act; Appointment of Successor. (a)
Upon the receipt by the Master Servicer of a notice of termination pursuant
to Section 6.01 or an Opinion of Counsel pursuant to Section 5.05 to the
effect that the Master Servicer is legally unable to act or to delegate its
duties to a Person which is legally able to act, the Indenture Trustee shall
automatically become the successor in all respects to the Master Servicer in
its capacity under this Agreement and the transactions set forth or provided
for herein and shall thereafter be subject to all the responsibilities,
duties, liabilities and limitations on liabilities relating thereto placed on
the Master Servicer by the terms and provisions hereof; provided, however,
that the Seller shall have the right to either (a) immediately assume the
duties of the Master Servicer or (b) select a successor Master Servicer;
provided further, however, that the Indenture Trustee shall have no
obligation whatsoever with respect to any liability (including advances
deemed recoverable and not previously made with respect to the relevant
Payment Date giving rise to the Master Servicer Event of Default which shall
be made by such successor Master Servicer) incurred by the Master Servicer at
or prior to the time of termination. As compensation therefor, but subject
to Section 5.06, the Indenture Trustee shall be entitled to compensation
which the Master Servicer would have been entitled to retain if the Master
Servicer had continued to act hereunder, except for those amounts due the
Master Servicer as reimbursement permitted under this Agreement for advances
previously made or expenses previously incurred. Notwithstanding the above,
the Indenture Trustee may, if it shall be unwilling so to act, or shall, if
it is legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution
which is a ▇▇▇▇▇▇ ▇▇▇- or ▇▇▇▇▇▇▇ Mac-approved servicer, and with respect to
a successor to the Master Servicer only, having a net worth of not less than
$10,000,000, as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities
of the Master Servicer hereunder; provided, that the Indenture Trustee shall
obtain a letter from each Rating Agency that the ratings, if any, on each of
the Notes will not be lowered as a result of the selection of the successor
to the Master Servicer. Pending appointment of a successor to the Master
Servicer hereunder, the Indenture Trustee shall be the successor and act in
such capacity as hereinabove provided. In connection with such appointment
and assumption, the Indenture Trustee may make such arrangements for the
compensation of such successor out of payments on the Mortgage Loans as the
Company and such successor shall agree; provided, however, that the
provisions of Section 5.06 shall apply, the compensation shall not be in
excess of that which the Master Servicer would have been entitled to if the
Master Servicer had continued to act hereunder, and that such successor shall
undertake and assume the obligations of the Master Servicer to pay
compensation to any third Person acting as an agent or independent contractor
in the performance of master servicing responsibilities hereunder. The
Indenture Trustee and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession.
(b) If the Indenture Trustee shall succeed to any duties of the Master
Servicer respecting the Mortgage Loans as provided herein, it shall do so in
a separate capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI of the Indenture shall be
inapplicable to the Indenture Trustee in its duties as the successor to the
Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Indenture Trustee in its capacity
as Indenture Trustee); the provisions of Article V, however, shall apply to
it in its capacity as successor master servicer.
Section 6.03. Notification to Noteholders. Upon any termination or
appointment of a successor to the Master Servicer, the Indenture Trustee
shall give prompt written notice thereof to Noteholders at their respective
addresses appearing in the Note Register and to the Rating Agencies.
Section 6.04. Waiver of Defaults. The Indenture Trustee shall transmit
by mail to all Noteholders, within 60 days after the occurrence of any Master
Servicer Event of Default of which a Responsible Officer of the Indenture
Trustee received written notice or has actual knowledge, unless such Master
Servicer Event of Default shall have been cured, notice of each such Master
Servicer Event of Default. The Holders of Notes aggregating at least 51% of
the Note Principal Balance of the Notes may, on behalf of all Noteholders,
waive any default by the Master Servicer in the performance of its
obligations hereunder and the consequences thereof, except a default in the
making of or the causing to be made any required distribution on the Notes,
which default may only be waived by Holders of Notes aggregating 100% of the
Note Principal Balance of the Notes. Upon any such waiver of a past default,
such default shall be deemed to cease to exist, and any Master Servicer Event
of Default arising therefrom shall be deemed to have been timely remedied for
every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to
the extent expressly so waived. The Indenture Trustee shall give notice of
any such waiver to the Rating Agencies.
ARTICLE VII
Miscellaneous Provisions
Section 7.01. Amendment. (a) This Agreement may be amended from time to
time by the Issuer, the Company, the Depositor, the Master Servicer, the
Securities Administrator and the Indenture Trustee, without notice to or the
consent of any of the Noteholders, to cure any ambiguity, to correct or
supplement any provisions herein or therein that may be defective or
inconsistent with any other provisions herein or therein, to comply with any
changes in the Code or to make any other provisions with respect to matters
or questions arising under this Agreement which shall not be inconsistent
with the provisions of this Agreement; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, addressed to the Indenture
Trustee, adversely affect in any material respect the interests of any
Noteholder.
(b) This Agreement may also be amended from time to time by the Issuer, the
Company, the Master Servicer, the Depositor, the Securities Administrator and
the Indenture Trustee, with the consent of the Holders of Notes aggregating
at least 51% of Note Principal Balance of the Notes, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders; provided, however, that no such amendment shall (i) reduce in
any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Note without the
consent of the Holder of such Note or (ii) reduce the aforesaid percentage of
Notes the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all Notes then outstanding.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to this Section 7.01(b), Notes
registered in the name of or held for the benefit of the Issuer, the
Depositor, the Securities Administrator, the Master Servicer, or the
Indenture Trustee or any Affiliate thereof shall be entitled to vote their
Percentage Interests with respect to matters affecting such Notes.
(c) Promptly after the execution of any such amendment, the Indenture
Trustee shall furnish a copy of such amendment or written notification of the
substance of such amendment to each Noteholder, with a copy to the Rating
Agencies.
(d) In the case of an amendment under Subsection 7.01(b) above, it shall
not be necessary for the Noteholders to approve the particular form of such
an amendment. Rather, it shall be sufficient if the Noteholders approve the
substance of the amendment. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Noteholders shall be
subject to such reasonable regulations as the Indenture Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Indenture Trustee shall be entitled to receive and rely upon an Opinion of
Counsel addressed to the Indenture Trustee stating that the execution of such
amendment is authorized or permitted by this Agreement. The Indenture
Trustee, the Master Servicer and the Securities Administrator may, but shall
not be obligated to, enter into any such amendment which affects its own
respective rights, duties or immunities under this Agreement.
Section 7.02. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other
comparable jurisdictions in which any or all of the Mortgaged Properties are
situated, and in any other appropriate public recording office or elsewhere.
The Depositor shall effect such recordation, at the expense of the Trust
Estate upon the request in writing of a Noteholder, but only if such
direction is accompanied by an Opinion of Counsel (provided at the expense of
the Noteholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the Noteholders or
is required by law.
Section 7.03. Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 51401 OF THE
GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE
CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 7.04. Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice
President-Servicing, telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇, or to such other
address as may hereafter be furnished to the other parties hereto in writing;
(ii) in the case of the Indenture Trustee, at the Corporate Trust Office or
such other address as may hereafter be furnished to the other parties hereto
in writing; (iii) in the case of the Company, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice President-Servicing, telecopier number: (212)
272-5591, or to such other address as may hereafter be furnished to the other
parties hereto in writing; (iv) in the case of the Master Servicer or
Securities Administrator, ▇▇▇▇▇ Fargo Bank, National Association, ▇.▇. ▇▇▇
▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or, in the case of overnight deliveries, ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 21045) (Attention: Corporate Trust
Services - MortgageIT 2004-1), facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇, or such other
address as may hereafter be furnished to the other parties hereto in writing;
or (v) in the case of the Issuer, to MortgageIT Trust 2004-1 c/o Wilmington
Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration, or such other
address as may hereafter be furnished to the other parties hereto in writing;
(vi) in the case of the Owner Trustee, to Wilmington Trust Company, ▇▇▇▇▇▇
Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration, or such other address as may
hereafter be furnished to the other parties hereto in writing; and (vii) in
the case of the Rating Agencies, Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Any notice delivered to the Depositor, the Master Servicer, the Securities
Administrator, the Indenture Trustee, the Issuer or the Owner Trustee under
this Agreement shall be effective only upon receipt. Any notice required or
permitted to be mailed to a Noteholder, unless otherwise provided herein,
shall be given by first-class mail, postage prepaid, at the address of such
Noteholder as shown in the Note Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given when mailed, whether or not the Noteholder receives such notice.
Section 7.05. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the Notes
or the rights of the Noteholders thereof.
Section 7.06. Successors and Assigns. The provisions of this Agreement
shall be binding upon the parties hereto, the Noteholders and their
respective successors and assigns. The Indenture Trustee shall have the
right to exercise all rights of the Issuer under this Agreement.
Section 7.07. Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 7.08. Counterparts. This Agreement may be executed in two or
more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same
instrument.
Section 7.09. Notice to Rating Agencies. The Indenture Trustee shall
promptly provide notice to each Rating Agency with respect to each of the
following of which a Responsible Officer of the Indenture Trustee has actual
knowledge or written notice:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Master Servicer Event of Default that has not
been cured;
3. The resignation or termination of the Master Servicer, the Indenture
Trustee or the Securities Administrator; and
4. Any change in the location of the Payment Account.
Section 7.10. Termination. The respective obligations and
responsibilities of the parties hereto created hereby shall terminate upon
the satisfaction and discharge of the Indenture pursuant to Section 4.10
thereof and, if applicable, the optional redemption of the Notes pursuant to
Section 8.07 thereof. Upon the presentation and surrender of the Notes, the
Securities Administrator shall distribute to the remaining Noteholders, in
accordance with their respective interests, all distributable amounts
remaining in the Payment Account. Following such final Payment Date, the
Indenture Trustee shall, or shall cause the Custodian to, release promptly to
the Issuer or its designee the Mortgage Files for the remaining Mortgage
Loans, and the Payment Account shall terminate, subject to the Securities
Administrator's obligation to hold any amounts payable to the Noteholders in
trust without interest pending final distributions pursuant to the Indenture.
Section 7.11. No Petition. Each party to this Agreement (and with
respect to ▇▇▇▇▇ Fargo, solely in its capacities as Master Servicer and
Securities Administrator and not in its individual or corporate capacity) by
entering into this Agreement, hereby covenants and agrees that it will not at
any time institute against the Issuer, or join in any institution against the
Issuer, any bankruptcy proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations of the Issuer.
This section shall survive the termination of this Agreement by one year.
Section 7.12. No Recourse. The Master Servicer acknowledges that no
recourse may be had against the Issuer, except as may be expressly set forth
in this Agreement.
Section 7.13. Additional Terms Regarding Indenture. The Indenture
Trustee shall have only such duties and obligations under this Agreement as
are expressly set forth herein, and no implied duties on its part shall be
read into this Agreement. In entering into and acting under this Agreement,
the Indenture Trustee shall be entitled to all of the rights, immunities,
indemnities and other protections set forth in Article VI of the Indenture.
IN WITNESS WHEREOF, the Depositor, the Issuer, the Company, the
Indenture Trustee, the Master Servicer and the Securities Administrator have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.
STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC., as Depositor
By:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
MortgageIT TRUST 2004-1,
as Issuer
By: WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely as Owner
Trustee
By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Financial Services Officer
DEUTSCHE BANK NATIONAL TRUST COMPANY, as
Indenture Trustee
By:
Name:
Title:
EMC MORTGAGE CORPORATION
By:
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer
By:
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
By:
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of September, 2004 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, known to me to be a
Vice President of Structured Asset Mortgage Investments II Inc., the
corporation that executed the within instrument, and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF DELAWARE )
) ss.:
COUNTY OF WILMINGTON )
On the 30th day of September, 2004 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, known to me to be a
Financial Services Officer of Wilmington Trust Company, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 30th day of September, 2004 before me, a notary public in and
for said State, personally appeared _______________, known to me to be an
Associate of Deutsche Bank National Trust Company, the entity that executed
the within instrument, and also known to me to be the person who executed it
on behalf of said entity, and acknowledged to me that such entity executed
the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 30th day of September, 2004 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an
Assistant Vice President of ▇▇▇▇▇ Fargo Bank, National Association, the
entity that executed the within instrument, and also known to me to be the
person who executed it on behalf of said entity, and acknowledged to me that
such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 30th day of September, 2004 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an
Assistant Vice President of ▇▇▇▇▇ Fargo Bank, National Association, the
entity that executed the within instrument, and also known to me to be the
person who executed it on behalf of said entity, and acknowledged to me that
such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 30th day of September, 2004 before me, a notary public in and
for said State, personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇, known to me to be an Senior
Vice President of EMC Mortgage Corporation, the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[Provided Upon Request]
EXHIBIT B
REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company (the "Indenture Trustee")
[_______________]
[_______________]
Deutsche Bank National Trust Company (the "Custodian")
[_______________]
[_______________]
RE: Sale and Servicing Agreement, dated as of September 30, 2004 (the
"Sale and Servicing Agreement"), among MortgageIT Mortgage Loan Trust
2004-1 as Issuer, Structured Asset Mortgage Investments II Inc., as
Depositor, Deutsche Bank National Trust Company, as Indenture
Trustee, ▇▇▇▇▇ Fargo Bank, National Associations, as Securities
Administrator and Master Servicer and EMC Mortgage Corporation, as
Seller.
In connection with the administration of the Mortgage Loans held by the
Custodian for the benefit of the Indenture Trustee pursuant to the
above-captioned Sale and Servicing Agreement, we request the release, and
hereby acknowledge receipt, of the Mortgage File for the Mortgage Loan
described below, for the reason indicated.
This release will not invalidate any insurance coverage provided in
respect of the Mortgage Loan under any of the Insurance Policies.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
____ 1. Mortgage Paid in Full and proceeds have been deposited into the
Payment Account
____ 2. Foreclosure
____ 3. Substitution
____ 4. Other Liquidation
____ 5. Nonliquidation Reason:
____ 6. California Mortgage Loan paid in full
By:
(authorized signer)
Issuer:
Address:
Date:
EXHIBIT C
MORTGAGEIT SERVICING AGREEMENT
[Provided Upon Request]
EXHIBIT D
ASSIGNMENT AGREEMENT
[Provided Upon Request]
EXHIBIT E
MORTGAGE LOAN PURCHASE AGREEMENT