EXHIBIT 99.1
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.,
as Depositor
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS TRUST, SERIES 2005-2,
as Issuer
HSBC BANK USA, NATIONAL ASSOCIATION,
as Indenture Trustee
▇▇▇▇▇ FARGO BANK, N.A.,
as Master Servicer and Securities Administrator
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.,
as Seller and Company
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SALE AND SERVICING AGREEMENT
Dated as of August 31, 2005
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▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Mortgage-Backed Notes, Series MLCC 2005-2
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................... 2
Section 1.01. ...................................................... 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........... 6
Section 2.03. Assignment of Interest in the Mortgage Loan
Purchase Agreement................................ 8
Section 2.04. Substitution of Mortgage Loans....................... 9
Section 2.05. Representations and Warranties Concerning the
Depositor......................................... 10
Section 2.06. Representations and Warranties Regarding the Master
Servicer.......................................... 11
Section 2.07. Assignment of Agreement.............................. 12
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.............. 14
Section 3.01. Master Servicer...................................... 14
Section 3.02. Monitoring of Servicer............................... 15
Section 3.03. Fidelity Bond........................................ 17
Section 3.04. Power to Act; Procedures............................. 17
Section 3.05. Due-on-Sale Clauses; Assumption Agreements........... 17
Section 3.06. Release of Mortgage Files............................ 18
Section 3.07. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Issuer and Indenture
Trustee........................................... 18
Section 3.08. Standard Hazard Insurance and Flood Insurance
Policies.......................................... 19
Section 3.09. Presentment of Claims and Collection of Proceeds..... 20
Section 3.10. Maintenance of the Primary Mortgage Insurance
Policies.......................................... 20
Section 3.11. Indenture Trustee to Retain Possession of Certain
Insurance Policies and Documents.................. 21
Section 3.12. Realization Upon Defaulted Mortgage Loans............ 21
Section 3.13. Compensation for the Master Servicer................. 21
Section 3.14. REO Property......................................... 22
Section 3.15. Annual Officer's Certificate as to Compliance........ 22
Section 3.16. Annual Independent Accountant's Servicing Report..... 23
Section 3.17. Reports Filed with Securities and Exchange
Commission........................................ 23
Section 3.18. UCC.................................................. 24
Section 3.19. Optional Purchase Deliquent and Defaulted
Mortgage Loans.................................... 24
Section 3.20. Monthly Advances..................................... 25
Section 3.21. Compensating Interest Payments....................... 25
ARTICLE IV ACCOUNTS..................................................... 26
Section 4.01. Protected Accounts................................... 26
Section 4.02. Master Servicer Collection Account................... 27
Section 4.03. Permitted Withdrawals and Transfers from the Master
Servicer Collection Account....................... 28
Section 4.04. Payment Account...................................... 29
Section 4.05. Permitted Withdrawals and Transfers from the Payment
Account........................................... 30
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TABLE OF CONTENTS
(continued)
Page
ARTICLE V THE MASTER SERVICER........................................... 32
Section 5.01. Liabilities of the Master Servicer................... 32
Section 5.02. Merger or Consolidation of the Master Servicer....... 32
Section 5.03. Indemnification of the Indenture Trustee, Owner
Trustee, the Master Servicer and the Securities
Administrator..................................... 32
Section 5.04. Limitations on Liability of the Master Servicer and
Others............................................ 33
Section 5.05. Master Servicer Not to Resign........................ 34
Section 5.06. Successor Master Servicer............................ 34
Section 5.07. Sale and Assignment of Master Servicing.............. 34
ARTICLE VI DEFAULT ..................................................... 36
Section 6.01. Master Servicer Events of Default.................... 36
Section 6.02. Indenture Trustee to Act; Appointment of Successor... 38
Section 6.03. Notification to Noteholders.......................... 39
Section 6.04. Waiver of Defaults................................... 39
ARTICLE VII MISCELLANEOUS PROVISIONS.................................... 40
Section 7.01. Amendment............................................ 40
Section 7.02. Recordation of Agreement............................. 41
Section 7.03. Governing Law........................................ 41
Section 7.04. Notices.............................................. 41
Section 7.05. Severability of Provisions........................... 42
Section 7.06. Successors and Assigns............................... 42
Section 7.07. Article and Section Headings......................... 42
Section 7.08. Counterparts......................................... 42
Section 7.09. Notice to Rating Agencies............................ 42
Section 7.10. Termination.......................................... 42
Section 7.11. No Petition.......................................... 43
Section 7.12. No Recourse.......................................... 43
Section 7.13. Additional Terms Regarding Indenture................. 43
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TABLE OF CONTENTS
(continued)
Page
EXHIBITS
Exhibit A - Mortgage Loan Schedule
Exhibit B - Request for Release of Documents
Exhibit C-1 - ▇▇▇▇▇ Fargo Servicing Agreement
Exhibit C-2 - PHH Servicing Agreement
Exhibit D-1 - ▇▇▇▇▇ Fargo Assignment Agreement
Exhibit D-2 - PHH Assignment Agreement
Exhibit E - Mortgage Loan Purchase Agreement
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SALE AND SERVICING AGREEMENT
Sale and Servicing Agreement dated as of August 31, 2005 (the
"Agreement"), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., a Delaware
corporation, as depositor (the "Depositor"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors
Trust, Series 2005-2, a Delaware statutory trust, as issuer (the "Issuer"), HSBC
Bank USA, National Association, a national banking association, as indenture
trustee (the "Indenture Trustee"), ▇▇▇▇▇ Fargo Bank, N.A. ("▇▇▇▇▇ Fargo"), as
master servicer (in such capacity, the "Master Servicer") and as securities
administrator (in such capacity, the "Securities Administrator"), and ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Lending, Inc., 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2005-2, 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 $1,220,525,429.03.
In consideration of the mutual agreements herein contained, each of the
Depositor, the Issuer, the Master Servicer, the Securities Administrator, the
Seller, the Company and the Indenture Trustee undertakes and agrees to perform
their respective duties hereunder as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions contained in Appendix A to the Indenture which
is incorporated by reference herein. All other capitalized terms used herein
shall have the meanings specified herein.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document, to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
(d) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
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ARTICLE II
Conveyance of Mortgage Loans
Section 2.01. Conveyance of Mortgage Loans to Issuer. (a) The Depositor
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Issuer without recourse all its right, title and interest in
and to (i) the Mortgage Loans and the proceeds thereof and all rights under the
Related Documents; (ii) all funds on deposit from time to time in the Master
Servicer Collection Account, excluding any investment income from such funds;
(iii) all funds on deposit from time to time in the Payment Account and in all
proceeds thereof; (iv) any REO Property; (v) all rights under (I) the Mortgage
Loan Purchase Agreement as assigned to the Issuer to the extent provided in
Section 2.03(a), (II) 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) and (III) the rights with respect to the Servicing
Agreements, each as assigned to the Issuer by the related Assignment Agreement;
and (vi) 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 such transfer and assignment of the Mortgage
Loans, the Depositor shall deliver to, and deposit with, or cause to be
delivered to and deposited with, the Custodian, on behalf of the Issuer, the
following documents or instruments with respect to each Mortgage Loan so
transferred and assigned:
(i) The original Mortgage Note endorsed, "Pay to the order of
___________, without recourse" and signed in the name of the name of last
endorsee, by an authorized officer of the last endorsee. If the Mortgage Loan
was acquired by the last endorsee in a merger or other type of acquisition, the
endorsement must be by "[name of last endorsee], successor [by merger to or in
interest to, as applicable] [name of predecessor]"; and if the Mortgage Loan was
acquired or originated by the last endorsee while doing business under another
name, the endorsement must be by "[name of last endorsee], successor in interest
to [previous name]." The Mortgage Note shall include all intervening
endorsements showing a complete chain of title from the originator to the last
endorsee. A lost note affidavit (including a copy of the original Mortgage Note)
may be delivered in lieu of the original Mortgage Note.
(ii) The original recorded Mortgage, with evidence of recording
thereon, or, if the original Mortgage has not yet been returned from the
recording office, a copy of the original Mortgage certified by the previous
owner to be a true copy of the original of the Mortgage which has been delivered
for recording in the appropriate recording office of the jurisdiction in which
the Mortgaged Property is located.
(iii) The original Assignment of Mortgage, executed in blank by
either MLML or its Servicer. If the Mortgage Loan was acquired by the last
endorsee in a merger or other type
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of acquisition, the assignment must be by "[name of last assignee], successor
[by merger to or in interest to, as applicable] [name of predecessor]"; and if
the Mortgage Loan was acquired or originated by the last endorsee while doing
business under another name, the assignment must be by "[name of last assignee],
successor in interest to [previous name]."
(iv) The original policy of title insurance (or a preliminary title
report if the original title insurance policy has not been received from the
title insurance company).
(v) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment has not
yet been returned from the recording office, a copy of such assignment certified
by the Seller to be a true copy of the original of the assignment which has been
delivered for recording in the appropriate recording office of the jurisdiction
in which the Mortgaged Property is located.
(vi) With respect to a Mortgage Loan that, according to the
Mortgage Loan Schedule is covered by a primary mortgage insurance policy, the
original or a copy of primary mortgage insurance certificate, if any.
(vii) If indicated on the Mortgage Loan Schedule, originals of all
assumption and modification agreements, if any, with originals or copies of the
underlying instruments being modified.
(viii) With respect to each Additional Collateral Mortgage Loan,
(A) copy of the related Mortgage 100 Pledge Agreement for
Securities Account or the Parent Power Guaranty and Security Agreement for
Securities Account or the Parent Power Guaranty Agreement for Real Estate, as
the case may be;
(B) copy of the UCC-1 (applicable for South Carolina and
Rhode Island only);
(C) an original form UCC-3, if applicable;
(D) for loans originated by a correspondent lender, an
original assignment of security interest of the related Mortgage 100 Pledge
Agreement or Parent Power Agreement, as the case may be.
(ix) With respect to each Cooperative Loan:
(A) the original proprietary lease;
(B) the original recognition agreement;
(C) the original security agreement;
(D) the original or copy of the assignment of proprietary
lease;
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(E) the original cooperative stock certificate and stock
power executed by borrower in blank;
(F) the original UCC-1 Financing Statements;
(G) the original UCC-3 Financing Statements; and
(x) Power of Attorney, if applicable.
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 related 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, the
Depositor may deliver lost note affidavits from the Seller; and (z) the
Depositor shall not be required to deliver intervening assignments or Mortgage
Note endorsements between the related Servicer 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 the Mortgage Loans which have been prepaid in full after the Cut-off
Date and prior to the Closing Date, the Depositor, in lieu of delivering the
above documents, may deliver to the Indenture Trustee, a certification to such
effect and shall deposit all amounts paid in respect of such Mortgage Loans in
the Master Servicer Collection Account on the Closing Date. The Depositor shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) to the 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
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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, with respect to the Mortgage Loans, in accordance with the Custodial
Agreement, the Custodian shall verify with respect to each Mortgage Loan by
delivery to the Depositor, the Seller, the Indenture Trustee and the Issuer of
an Initial Certification, that (a) all documents described in Sections
2.01(b)(i), (ii), (iii), (iv) and (iv) hereof and to the extent provided by
Section 2.01(b) and all documents described in Sections 2.01(b)(vi), (vii),
(viii), (ix) and (x) hereof, if applicable, are in its possession, (b) such
documents have been reviewed by it and appear regular on their face and relate
to such Mortgage Loan, (c) based on its examination and only as to the foregoing
documents, the information set forth in terms (i), (ii) excluding the zip code
requirement, (viii) and (xiv), of the definition of "Mortgage Loan Schedule"
respecting such Mortgage Loan is correct, and which as to items (xxv) and (xxix)
for adjustable rate Mortgage Loan Documents and (d) each Mortgage Note has been
endorsed and each Assignment of Mortgage has been executed as provided in
Section 2.01 hereof. 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 within 90
days from the Indenture Trustee's notification, provide a Substitute Mortgage
Loan or purchase such Mortgage Loan at the
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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 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 the
Master Servicer the Repurchase
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Price for deposit in the Master Servicer Collection Account and the Seller shall
provide to the Securities Administrator and the Indenture Trustee written
notification detailing the components of the Repurchase Price. Upon deposit of
the Repurchase Price in the Master Servicer Collection Account, the Depositor
shall notify the Indenture Trustee and the 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 Master Servicer Collection 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 Master Servicer
Collection Account. The Master Servicer shall amend the Mortgage Loan Schedule,
which was previously delivered to it by the Depositor in a form agreed to
between the Depositor, 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) The Depositor hereby assigns to the Issuer, all of its right,
title and interest in the Mortgage Loan Purchase Agreement, including but not
limited to the Depositor's rights and obligations pursuant to the Servicing
Agreements (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 related Servicer under the related Servicing Agreement to
enforce the provisions thereof and to seek all or any available remedies). The
Depositor hereby acknowledges that such right, title and interest in the
Mortgage Loan Purchase Agreement, will be pledged by the Issuer to the Indenture
Trustee pursuant to the Indenture. The obligations of the Seller to substitute
or repurchase, as applicable, a Mortgage Loan shall be the Issuer's, the
Indenture Trustee's and the Noteholders' sole remedy for any breach thereof. At
the request of the Issuer or the Indenture Trustee, the Depositor shall take
such actions as may be necessary to enforce the above right, title and interest
on behalf of the Issuer, the Indenture Trustee and the Noteholders 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. 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 2.05 of this Agreement, shall purchase the Mortgage Loan or any property
acquired with respect thereto from the Issuer; provided, however, that if there
is a breach of any representation set forth in the Mortgage Loan Purchase
Agreement or Section 2.05 of this Agreement, and the Mortgage Loan or the
related property
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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
Master Servicer for deposit in the Master Servicer Collection Account and
written notification detailing the components of such Repurchase Price. The
Depositor shall submit to the Indenture Trustee and the Custodian a Request for
Release, and the Indenture Trustee shall cause the Custodian to release, upon
receipt of certification from the Master Servicer that the Repurchase Price has
been deposited in the Master Servicer Collection Account, to the Seller the
related Mortgage File and the Indenture Trustee shall execute and deliver all
instruments of transfer or assignment furnished to it by the Seller, without
recourse, representation or warranty as are necessary to vest in the Seller
title to and rights under the Mortgage Loan or any property acquired with
respect thereto. Such purchase shall be deemed to have occurred on the date on
which the Repurchase Price in available funds is deposited in the Master
Servicer Collection Account. The Master Servicer shall amend the Mortgage Loan
Schedule to reflect such repurchase and shall promptly deliver to the Issuer,
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
Master Servicer for deposit in the Master Servicer Collection Account the
amount, if any, by which the Outstanding Principal Balance as of the next
preceding Due Date of the Mortgage Loan for which substitution is being made,
after giving effect to the Scheduled Principal due on such date, exceeds the
Outstanding Principal Balance as of such date of the Substitute Mortgage Loan,
after giving effect to Scheduled Principal due on such date, which amount shall
be treated for the purposes of this Agreement as if it were the payment by the
Seller of the Repurchase Price for the purchase of a Mortgage Loan by the
Seller. After such notification to the Seller and, if any such excess exists,
upon receipt of certification from the Master Servicer that such excess has been
deposited in the Master Servicer Collection Account, the Indenture Trustee shall
accept such Substitute Mortgage Loan which shall thereafter be deemed to be a
Mortgage Loan hereunder. In the event of such a substitution, accrued interest
on the Substitute Mortgage Loan for the month in which the substitution occurs
and any Principal Prepayments made thereon during such month shall be the
property of the
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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
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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 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
United 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;
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(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
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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.
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ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. Master Servicer. The Master Servicer shall supervise,
monitor and oversee the obligations of the Servicers to service and administer
the Mortgage Loans in accordance with the terms of the related 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 Servicers 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 Servicers and shall cause the
Servicers to perform and observe the covenants, obligations and conditions to be
performed or observed by such Servicer under the related Servicing Agreement.
The Master Servicer shall independently and separately monitor the Servicers'
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 Servicers' and Master
Servicer's records, and based on such reconciled and corrected information, the
Master Servicer shall provide such information to the Securities Administrator
as shall be necessary in order for it to prepare the statements specified in
Section 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 Servicers pursuant to the Servicing Agreements.
Notwithstanding the foregoing or any other provision of this Agreement or
any Servicing Agreement to the contrary, the Master Servicer shall have no duty
or obligation to supervise, monitor or oversee the activities of or to enforce
the obligation of any Servicer under a Servicing Agreement with respect to any
Additional Collateral or any Surety Bond, including, without limitation, the
collection of any amounts owing to the trust in respect thereof (unless and
until the Master Servicer shall have assumed the obligations of the related
Servicer as successor Servicer under such Servicing Agreement pursuant to
Section 3.02 hereof, in which case, as successor Servicer, it shall be bound to
service and administer the Additional Collateral and the Surety Bonds in
accordance with the provisions of such Servicing Agreement).
The Indenture Trustee shall furnish the Servicers and the Master Servicer
with any powers of attorney and other documents in form as provided to it
necessary or appropriate to enable the related 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 Servicers' or the Master
Servicer's use or misuse of such powers of attorney.
The Indenture Trustee shall provide access to the records and
documentation in possession of the Indenture Trustee regarding the related
Mortgage Loans and REO Property and the servicing thereof to the Noteholders,
the FDIC, and the supervisory agents and examiners of the FDIC, such access
being afforded only upon reasonable prior written request and during normal
business hours at the office of the Indenture Trustee; provided, however, that,
unless otherwise required by law, the Indenture Trustee shall not be required to
provide access to such records and documentation to the Noteholders if the
provision thereof would violate the legal
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right to privacy of any Mortgagor. The Indenture Trustee shall allow
representatives of the above entities to photocopy any of the records and
documentation and shall provide equipment for that purpose at a charge that
covers the Indenture Trustee's actual costs.
The Indenture Trustee shall execute and deliver to the related 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) effect the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) take 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. Monitoring of Servicer. (a) The Master Servicer shall be
responsible for reporting to the Issuer, the Indenture Trustee and the Depositor
the compliance by each Servicer with its duties under the related Servicing
Agreement. In the review of the Servicers' activities, the Master Servicer may
rely upon an officer's certificate of the related Servicer (or similar document
signed by an officer of the related Servicer) with regard to such Servicer's
compliance with the terms of the related Servicing Agreement. In the event that
the Master Servicer, in its judgment, determines that a Servicer (other than
▇▇▇▇▇ Fargo) should be terminated in accordance with the related Servicing
Agreement, or that a notice should be sent pursuant to the related 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. In
the event that the Master Servicer, in its judgment, determines that ▇▇▇▇▇ Fargo
should be terminated in accordance with the ▇▇▇▇▇ Fargo Servicing Agreement, or
that a notice should be sent pursuant to the ▇▇▇▇▇ Fargo 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 and
the Indenture Trustee thereof in writing. Pursuant to its receipt of such
written notification from the Master Servicer, the Indenture Trustee shall issue
such notice of termination to ▇▇▇▇▇ Fargo 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 Servicers
under the related Servicing Agreement, and shall, in the event that a Servicer
other than ▇▇▇▇▇ Fargo fails to perform its obligations in accordance with the
related Servicing Agreement, subject to the preceding paragraph, terminate the
rights and obligations of such Servicer thereunder and act as servicer of the
related Mortgage Loans or cause the Issuer and the Indenture Trustee to enter
into a new Servicing Agreement with a successor servicer selected by the Master
Servicer; provided, however, it is understood and acknowledged by the parties
hereto that there will be a period of transition (not to exceed 90 days) before
the actual servicing functions can be fully transferred to such successor
servicer. In the event that ▇▇▇▇▇ Fargo fails to perform its obligations in
accordance with the ▇▇▇▇▇ Fargo Servicing Agreement, subject to the preceding
paragraph, the Master Servicer shall notify the Indenture Trustee in writing of
such failure. Pursuant to its receipt of such notification from the Master
Servicer, the Indenture Trustee shall terminate the rights and obligations of
▇▇▇▇▇ Fargo under the ▇▇▇▇▇ Fargo Servicing Agreement and enter in to a new
Servicing Agreement with a successor Servicer selected by the Indenture Trustee;
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provided, however, it is understood and acknowledged by the parties hereto that
there will be a period of transition (not to exceed 90 days) before the actual
servicing functions can be fully transferred to such successor Servicer. In
either event, such enforcement, including, without limitation, the legal
prosecution of claims, termination of the related 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 (or in the case ▇▇▇▇▇
Fargo is terminated as the Servicer, the Indenture Trustee), 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. In the event that ▇▇▇▇▇ Fargo is terminated as the Servicer, the
Indenture Trustee shall pay the costs of such enforcement at its own expense,
subject to its right to be reimbursed for such costs from the Master Servicer
Collection Account pursuant to Section 3.03(c); provided that the Indenture
Trustee shall not be required to prosecute or defend any legal action except to
the extent that the Indenture Trustee shall have received reasonable indemnity
for its costs and expenses in pursuing such action. Nothing herein shall impose
any obligation on the part of the Indenture Trustee to assume or succeed to the
duties or obligations of ▇▇▇▇▇ Fargo or the Master Servicer.
(c) In the event that ▇▇▇▇▇ Fargo is terminated as Servicer, to the
extent that the costs and expenses of the Indenture Trustee related to any
termination of ▇▇▇▇▇ Fargo, or the enforcement or prosecution of related claims,
rights or remedies, or the appointment of a successor Servicer (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
▇▇▇▇▇ Fargo as a result of an event of default by ▇▇▇▇▇ Fargo 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 Servicer to service the Mortgage Loans in accordance with
the related Servicing Agreement) are not fully and timely reimbursed by ▇▇▇▇▇
Fargo after such termination, the Indenture Trustee shall be entitled to
reimbursement of such costs and expenses from the Master Servicer Collection
Account (which the Master Servicer hereby agrees to pay to the Indenture Trustee
from the Master Servicer Collection Account upon demand) or, to the extent not
paid from such account, the Indenture Trustee shall be entitled to reimburse
itself for such costs and expenses from the Payment Account. In all other cases,
to the extent that the costs and expenses of the Master Servicer related to any
termination of a Servicer (other than ▇▇▇▇▇ Fargo), appointment of a successor
servicer or the transfer and assumption of servicing by the Master Servicer with
respect to the related Servicing Agreement (including, without limitation, (i)
all out of pocket legal costs and expenses and all due diligence costs and
expenses associated with an evaluation of the potential termination of a
Servicer as a result of an event of default by such Servicer and (ii) all costs
and expenses associated with the complete transfer of servicing, including all
servicing files and all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the successor servicer
to correct any errors or insufficiencies in the servicing data or otherwise to
enable the successor service to service the Mortgage Loans in accordance with
the related Servicing Agreement) are not fully and timely reimbursed by the
terminated Servicer, the Master Servicer shall be entitled to reimbursement of
such costs and expenses from the Master Servicer Collection Account.
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(d) The Master Servicer shall require the Servicers to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.
(e) If the Master Servicer acts as a Servicer, it will not assume
liability for the representations and warranties of the Servicer (other than
▇▇▇▇▇ Fargo), if any, that it replaces.
Section 3.03. 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 3.04. 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 related 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
related 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 related 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 related 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 6.11 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 3.05. Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the related Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
related Servicer to enforce such clauses in accordance with the related
Servicing Agreement. If applicable law prohibits the enforcement of
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a due-on-sale clause or such clause is otherwise not enforced in accordance with
the related Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with the related Servicing Agreement.
Section 3.06. Release of Mortgage Files. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the related 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 related
Servicer will, if required under the related Servicing Agreement, or the Master
Servicer may 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 such Servicer pursuant to the related Servicing
Agreement have been so deposited) and shall request that the Indenture Trustee
deliver or cause the Custodian to deliver to such 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 related Servicer and the Indenture Trustee shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in full,
the related 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 related Servicing
Agreement, the Indenture Trustee shall execute such documents as shall be
prepared and furnished to the Indenture Trustee by the Servicers 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 related 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 related Servicer or the Master Servicer, as applicable. The related
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 such
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
related Servicer or the Master Servicer.
Section 3.07. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Issuer and Indenture Trustee.
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(a) The Master Servicer shall transmit and the Servicers (to the extent
required by the related Servicing Agreement) shall transmit to the Indenture
Trustee such documents and instruments coming into the possession of the Master
Servicer or the Servicers from time to time as are required by the terms hereof,
or in the case of the Servicers, the related Servicing Agreement, to be
delivered to the Indenture Trustee. Any funds received by the Master Servicer or
by any Servicer in respect of any Mortgage Loan or which otherwise are collected
by the Master Servicer or by any Servicer as Liquidation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan shall be held for the benefit of the
Issuer and the Indenture Trustee subject to the Master Servicer's right to
retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement and the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the related Servicing Agreement. The Master Servicer shall, and (to the
extent provided in the related Servicing Agreement) shall cause each 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 Servicers
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 such Servicer under
this Agreement or the related Servicing Agreement.
Section 3.08. Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related 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
related Servicing Agreement. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
related 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.
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(b) Pursuant to Section 4.01 and 4.02, any amounts collected by the
related 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
related Servicing Agreement) shall be deposited into the Master Servicer
Collection Account, subject to withdrawal pursuant to Section 4.02 and 4.03. Any
cost incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Noteholders and shall be recoverable by the Master Servicer or such Servicer
pursuant to Section 4.02 and 4.03.
Section 3.09. Presentment of Claims and Collection of Proceeds. The Master
Servicer shall (to the extent provided in the related Servicing Agreement) cause
the related 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 any Servicer and remitted to the Master Servicer) in respect of such
policies, bonds or contracts shall be promptly deposited in the Master Servicer
Collection Account upon receipt, except that any amounts realized that are to be
applied to the repair or restoration of the related Mortgaged Property as a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable Insurance Policy need not be so deposited
(or remitted).
Section 3.10. Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the related 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 such Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause the Servicers (to the
extent required under the related 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 related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
the Servicers (to the extent required under the related 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 related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to cause the Servicers (to the extent
required under the related Servicing Agreement) to present, on behalf of the
Issuer, the Indenture Trustee and the Noteholders, claims to the insurer under
any Primary Mortgage Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01 and 4.02, any amounts collected by the Master Servicer or the
Servicers under any Primary
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Mortgage Insurance Policies shall be deposited in the Master Servicer Collection
Account, subject to withdrawal pursuant to Sections 4.02 and 4.03.
Section 3.11. 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 3.12. 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 Servicers (to the extent required under and subject to
the provisions of the related Servicing Agreement and subject to the provisions
of Section 3.19 hereof) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such Mortgage Loans, all
in accordance with the related Servicing Agreement. The related 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 such Servicer as contemplated in Section 4.05.
In addition, the Servicers may also, in their discretion, as an
alternative to foreclosure, sell defaulted Mortgage Loans at fair market value
to third parties, if such Servicer reasonably believes that such sale would
maximize proceeds to the Noteholders in the aggregate (on a present value basis)
with respect to that Mortgage Loan.
Section 3.13. 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 Master Servicer Collection
Account and the Payment Account, pursuant to Article IV, for the performance of
its activities hereunder (the "Master Servicer Compensation"). Servicing
compensation in the form of assumption fees, if any, late payment charges, as
collected, if any, or otherwise (including any prepayment premium or penalty)
shall be retained by the related 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.
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Section 3.14. 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 related
Servicing Agreement, cause the Servicers to sell any REO Property as
expeditiously as possible and in accordance with the provisions of the related
Servicing Agreement, as applicable. Pursuant to its efforts to sell such REO
Property, the Master Servicer shall cause the Servicers to protect and conserve,
such REO Property in the manner and to the extent required by the related
Servicing Agreement.
(b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the Servicers 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 Servicers, 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 related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the related 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 Master
Servicer Collection Account on the next succeeding Servicer Remittance Date.
Section 3.15. 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, 2006, 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 related Servicer has failed to perform any of its duties,
responsibilities and obligations under the related 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.
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(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 3.16. 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, 2006
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.
Prior to (i) March 15, 2006 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 each
Servicer, in each case, required to be delivered pursuant to the related
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 this Agreement.
Section 3.17. 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, file a Form 15
Suspension Notice with respect to the Trust Estate, if applicable. Prior to (i)
March 15, 2006 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
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annual statement of compliance of each Servicer, in each case, required to be
delivered pursuant to the related 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 3.15 and
3.16. Prior to (i) March 31, 2006, 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 3.17; 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 3.17 shall not be reimbursable from the Trust Estate.
Section 3.18. 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 3.19. Foreclosure Proceedings, and Optional Purchase of Delinquent
and Defaulted Mortgage Loans. (a) For so long as (i) the Investor holds all of
the Classes of Privately Offered Notes (other than any such Notes with respect
to which a "will be debt" opinion has been rendered by nationally recognized tax
counsel and furnished to the Master Servicer) and the Certificates and (ii) has
not forfeited its rights set forth in Section 4.02 of the related Servicing
Agreement, the Master Servicer (A) shall promptly notify the Investor of its
receipt of any Foreclosure Notice and any Non-Foreclosure Notice and (B) shall
promptly notify the Investor of the Fair Value Prices (as defined in the related
Servicing Agreement) and related calculations of the purchase price of the
Mortgage Loans determined pursuant to Section 4.02 of the related Servicing
Agreement. In the event that the Investor has notified the Master Servicer in
writing that the Investor no longer holds all of the Privately Offered Notes
(other than any such Note with respect to which a "will be debt" opinion has
been rendered by nationally recognized tax counsel and furnished to the Master
Servicer) and the Certificates and the related Servicer, as applicable, has
notified the Master Servicer that the Investor has forfeited its rights
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set forth in Section 4.02 of the related Servicing Agreement, the Master
Servicer shall provide the related Servicer with an Expiration Notice indicating
such event.
Section 3.20. 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 related Servicer was required to
make an advance pursuant to the related Servicing Agreement exceeds the amount
deposited in the Master Servicer Collection Account which will be used for an
advance with respect to such Mortgage Loan, the Master Servicer will deposit in
the Master Servicer Collection Account not later than the related 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 related Servicer is
required to do so under the related 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 3.21. Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each Payment
Account Deposit Date an amount equal to the lesser of (i) the sum of the
aggregate amounts required to be paid by the Servicers under the related
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 related Servicer and (ii) the Master
Servicing Compensation for such Payment Date (such amount, the "Compensating
Interest Payment"). The Master Servicer shall not be entitled to any
reimbursement of any Compensating Interest Payment.
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ARTICLE IV
Accounts
Section 4.01. Protected Accounts. (a) The Master Servicer shall enforce
the obligation of the Servicers to establish and maintain a Protected Account in
accordance with the related 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 two (2) Business Days (or as of such other time
specified in the related Servicing Agreement) of receipt, all collections of
principal and interest on any Mortgage Loan and any REO Property received by the
Servicers, including Principal Prepayments, Insurance Proceeds, Liquidation
Proceeds, and advances made from the Servicers' own funds (less servicing
compensation as permitted by the related Servicing Agreement) and all other
amounts to be deposited in the related Protected Account. Each Protected Account
shall be an Eligible Account. Each Servicer is hereby authorized to make
withdrawals from and deposits to the related Protected Account for purposes
required or permitted by this Agreement. To the extent provided in the related
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 related Servicing Agreement, amounts
on deposit in the Protected Account may be invested in Permitted Investments in
the name of the Indenture Trustee for the benefit of Noteholders and, except as
provided in the preceding paragraph, not commingled with any other funds. Such
Permitted Investments shall mature, or shall be subject to redemption or
withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the Master Servicer Collection Account, and shall be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the related
Servicer under the related 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 related Servicer. The related Servicer
(to the extent required by the related 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 related Servicing Agreement and
subject to this Article IV, on or before each Servicer Remittance Date, the
Servicers shall withdraw or shall cause to be withdrawn from its Protected
Account and shall immediately deposit or cause to be deposited in the Master
Servicer Collection Account amounts representing the following collections and
payments (other than with respect to principal of or interest on the Mortgage
Loans due on or before the Cut-off Date):
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the Servicers pursuant to the related
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 related Servicer with respect to the Mortgage Loans in the
related Prepayment Period, with
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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), 4.02 and 4.03; to reimburse the
Master Servicer or the Servicers for Monthly Advances which have been recovered
by subsequent collections from the related Mortgagor; to remove amounts
deposited in error; to remove fees, charges or other such amounts deposited on a
temporary basis; or to clear and terminate the account at the termination of
this Agreement in accordance with Section 7.10. As provided in Sections 4.01(a)
and 4.02(b) certain amounts otherwise due to the related Servicer may be
retained by it and need not be deposited in the Master Servicer Collection
Account.
Section 4.02. Master Servicer Collection Account. (a) The Master Servicer
shall establish and maintain in the name of the Indenture Trustee, for the
benefit of the Noteholders, the Master Servicer Collection Account as a
segregated trust account or accounts. The Master Servicer Collection Account may
be a sub-account of the Payment Account but in any event shall be an Eligible
Account. The Master Servicer will deposit in the Master Servicer Collection
Account as identified by the Master Servicer and as received by the Master
Servicer, the following amounts:
(i) Any amounts withdrawn from the Protected Account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds received by
or on behalf of the Master Servicer or which were not deposited in the Protected
Account;
(iv) The Repurchase Price with respect to any Mortgage Loans
purchased by the Seller pursuant to the Mortgage Loan Purchase Agreement or
Sections 2.02 or 2.03 hereof, any amounts which are to be treated pursuant to
Section 2.04 of this Agreement as the payment of a Repurchase Price in
connection with the tender of a Substitute Mortgage Loan by the Seller and the
Repurchase Price with respect to any Mortgage Loans purchased by the
Certificateholder pursuant to Section 3.19;
(v) Any amounts required to be deposited by the Master Servicer
with respect to losses on investments of deposits in the Master Servicer
Collection Account or Payment Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer and required to be deposited in the Master Servicer Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account
shall be held by the Master Servicer in the name of the Indenture Trustee in
trust for the benefit of the
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Noteholders in accordance with the terms and provisions of this Agreement and
the Indenture. The requirements for crediting the Master Servicer Collection
Account or the Payment Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (x), (xi) and (xii), need not be
credited by the Master Servicer or the related Servicer to the Master Servicer
Collection Account or remitted by the Master Servicer or related Servicer to the
Securities Administrator for deposit in the Payment Account, as applicable. 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 amount at any time credited to the Master Servicer Collection
Account may be invested, in the name of the Indenture Trustee, or its nominee,
for the benefit of the Noteholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Payment Account Deposit Date. Any and all investment earnings on
amounts on deposit in the Master Servicer Collection Account from time to time
shall be for the account of the Master Servicer. The Master Servicer from time
to time shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Master Servicer Collection Account. The risk of
loss of moneys required to be distributed to the Noteholders resulting from such
investments shall be borne by and be the risk of the Master Servicer. The Master
Servicer shall deposit the amount of any such loss in the Master Servicer
Collection Account within two Business Days of receipt of notification of such
loss but not later than the second Business Day prior to the Payment Date on
which the moneys so invested are required to be distributed to the Noteholders.
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 Master Servicer Collection Account pursuant to subclauses
(i) through (iv) of Section 3.25 of the Indenture 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 remitted to the Securities
Administrator for deposit in the Payment Account under Section 4.03 of this
Agreement.
Section 4.03. Permitted Withdrawals and Transfers from the Master Servicer
Collection Account. (a) The Master Servicer will, from time to time on demand of
the related Servicer or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 7.10 and
remove amounts from time to time deposited in error.
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(b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (i) any expenses, costs and liabilities
recoverable by the Master Servicer or the Securities Administrator pursuant to
Sections 3.02 and 5.04 hereof and Section 6.07 of the Indenture and (ii) any
amounts payable to the Master Servicer as set forth in Section 3.13; provided
however, that the Master Servicer shall be obligated to pay from its own funds
any amounts which it is required to pay under Section 5.03(a).
(c) In addition, on or before each Payment Account Deposit Date, the
Master Servicer shall deposit in the Payment Account any Monthly Advances
required to be made by the Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Payment Account
Deposit Date, the Master Servicer will transfer all Available Funds on deposit
in the Master Servicer Collection Account with respect to the related Payment
Date to the Securities Administrator for deposit in the Payment Account.
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.
(b) All amounts deposited to the Payment Account shall be held by the
Securities Administrator in the name of the Indenture Trustee in trust for the
benefit of the Noteholders in accordance with the terms and provisions of this
Agreement.
(c) The Payment Account shall constitute a non-interest bearing trust
account of the Trust Estate segregated on the books of the 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
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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 related Servicing Agreement or as
the Securities Administrator has instructed hereunder for the following purposes
(limited in the case of amounts due the Master Servicer to those not withdrawn
from the Master Servicer Collection Account as certified by the Securities
Administrator in accordance with the terms of this Agreement but not in any
order of priority):
(i) to reimburse the Master Servicer or the related Servicer for
any Monthly Advance of its own funds, the right of the Master Servicer or the
related 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 related 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 related 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 related 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 related 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;
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(v) to reimburse the Master Servicer or the related 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 3.13;
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 3.02,
5.04(c) and (d), to the extent that the Master Servicer has not already
reimbursed itself for such amounts from the Master Servicer Collection Account;
(viii)to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by the
related Servicer;
(ix) to reimburse or pay the related Servicer any such amounts as
are due thereto under the related Servicing Agreement and have not been retained
by or paid to the related Servicer, to the extent provided in the related
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 Master Servicer
Collection Account;
(xi) to remove amounts deposited in error; and
(xii) to clear and terminate the Payment Account pursuant to Section
7.10.
(b) The Master Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Payment Account pursuant to subclauses (i) through (iv)
or with respect to any such amounts which would have been covered by such
subclauses had the amounts not been retained by the Master Servicer without
being deposited in the Payment Account under Section 4.02(b).
(c) On each Payment Date, pursuant to Section 3.03 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 3.03 of the Indenture.
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ARTICLE V
The Master Servicer
Section 5.01. Liabilities of the Master Servicer. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 5.02. Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Notes or any of the Mortgage Loans and to perform its duties under this
Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 5.03. Indemnification of the Indenture Trustee, Owner Trustee, the
Master Servicer and the Securities Administrator. 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 Servicing Agreements, the Assignment Agreements 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
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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 and the Indenture Trustee, to the extent it becomes a party
to the ▇▇▇▇▇ Fargo Servicing Agreement pursuant to Section 3.03, and any
officer, director, employee or agent of the Indenture Trustee, 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 related Servicing Agreement (except to the extent that the
Master Servicer or the Indenture Trustee, as the case may be, is indemnified by
the related Servicer thereunder), other than (i) any such loss, liability or
expense related to the Master Servicer's failure to perform its duties in
compliance with this Agreement (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement), or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to this Agreement or the Indenture and the rights and duties of the parties
hereto and the interests of the Noteholders hereunder and thereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Estate, and the
Master Servicer shall be entitled to be reimbursed therefor out of the Master
Servicer Collection Account as provided by Section 4.03. Nothing in this
Subsection 5.04(d) shall affect the Master Servicer's obligation to supervise,
or to take such actions as are necessary to ensure, the servicing and
administration of the Mortgage Loans pursuant to Subsection 3.01(a).
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(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the 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
a Servicer, with the exception of ▇▇▇▇▇ Fargo, except as otherwise expressly
provided herein.
(g) It is expressly understood and agreed by the parties hereto that (i)
this Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as trustee of the Trust, in the exercise
of the powers and authority conferred and vested in it under the Trust
Agreement, (ii) each of the representations, undertakings and agreements herein
made on the part of the Trust is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but is
made and intended for the purpose of binding only the Trust and (iii) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Agreement or the other Transaction Documents.
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. Any resignation of the Master Servicer
shall result in the automatic resignation of the Securities Administrator.
Section 5.06. Successor Master Servicer. In connection with the
appointment of any successor master servicer or the assumption of the duties of
the Master Servicer, the Company or the Indenture Trustee may make such
arrangements for the compensation of such successor master servicer out of
payments on the Mortgage Loans as the Company or the Indenture Trustee and such
successor master servicer shall agree. If the successor master servicer does not
agree that such market value is a fair price, such successor master servicer
shall obtain two quotations of market value from third parties actively engaged
in the servicing of single-family mortgage loans. Notwithstanding the foregoing,
the compensation payable to a successor master servicer may not exceed the
compensation which the Master Servicer would have been entitled to retain if the
Master Servicer had continued to act as Master Servicer hereunder.
Section 5.07. Sale and Assignment of Master Servicing. The Master Servicer
may sell and assign its rights and delegate its duties and obligations in its
entirety as Master Servicer
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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 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.
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ARTICLE VI
Default
Section 6.01. Master Servicer Events of Default. "Master Servicer Event of
Default," wherever used herein, means any one of the following events (whatever
the reason for such Master Servicer Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) and only with respect to the defaulting
Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Payment Account any amount so required to be deposited pursuant to this
Agreement (other than a Monthly Advance), and such failure continues unremedied
for a period of three Business Days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any
material respect any other material covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements materially
affect the rights of Noteholders, and such failure continues unremedied for a
period of 60 days after the date on which written notice of such failure,
properly requiring the same to be remedied, shall have been given to the Master
Servicer by the Indenture Trustee or to the Master Servicer and the Indenture
Trustee by the Holders of Notes aggregating at least 25% of the Note Principal
Balance of the Notes; or
(iii) There is entered against the Master Servicer a decree or order
by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order is unstayed and in effect for a
period of 60 consecutive days, or an involuntary case is commenced against the
Master Servicer under any applicable insolvency or reorganization statute and
the petition is not dismissed within 60 days after the commencement of the case;
or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Master Servicer or substantially all of its property; or the Master Servicer
admits in writing its inability to pay its debts generally as they become due,
files a petition to take advantage of any applicable insolvency or
reorganization statute, makes an assignment for the benefit of its creditors, or
voluntarily suspends payment of its obligations;
(v) The Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 5.05 or 5.07; or
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(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.
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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
▇▇▇▇▇▇ Mae- 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 it and such successor shall agree; provided, however, that
the provisions of Section 5.06 shall apply, the compensation shall not be in
excess of that which the Master Servicer would have been entitled to if the
Master Servicer had continued to act hereunder, and that such successor shall
undertake and assume the obligations of the Master Servicer to pay compensation
to any third Person acting as an agent or independent contractor in the
performance of master servicing responsibilities hereunder. The Indenture
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) If the Indenture Trustee shall succeed to any duties of the Master
Servicer respecting the Mortgage Loans as provided herein, it shall do so in a
separate capacity and not in its capacity as Indenture Trustee and, accordingly,
the provisions of Article VI of the Indenture shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Master Servicer in the
servicing of the Mortgage Loans (although such provisions shall continue to
apply to the Indenture Trustee in its capacity as Indenture Trustee); the
provisions of Article V, however, shall apply to it in its capacity as successor
master servicer.
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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.
-39-
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.
-40-
Section 7.02. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Depositor
shall effect such recordation, at the expense of the Trust Estate upon the
request in writing of a Noteholder, but only if such direction is accompanied by
an Opinion of Counsel (provided at the expense of the Noteholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Noteholders or is required by law.
Section 7.03. Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE CHOICE OF
SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 7.04. Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 4 World Financial Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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, 4 World Financial Center,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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, N.A., ▇.▇. ▇▇▇
▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or, in the case of overnight deliveries, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 21045) (Attention: Corporate Trust Services -
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Series 2005-2), facsimile no.: (410)
715-2380, 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Investors Trust, Series 2005-2 c/o Wilmington Trust Company, ▇▇▇▇▇▇
Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Corporate Trust Administrator, 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
Administrator; 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
-41-
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:
a) Any material change or amendment to this Agreement;
b) The occurrence of any Master Servicer Event of Default that
has not been cured;
c) The resignation or termination of the Master Servicer, the
Indenture Trustee or the Securities Administrator; and
d) Any change in the location of the Master Servicer Collection
Account.
Section 7.10. Termination. The respective obligations and responsibilities
of the parties hereto created hereby shall terminate upon the satisfaction and
discharge of the Indenture pursuant to Section 4.10 thereof and, if applicable,
the optional redemption of the Notes pursuant to Section 8.07 thereof. In the
event that this Agreement is terminated by reason of the payment or liquidation
of all Mortgage Loans or the disposition of all property acquired with respect
to all Mortgage Loans under this Section, the Master Servicer shall deliver to
the Securities Administrator for deposit in the Payment Account all
distributable amounts remaining in the Master Servicer Collection Account. Upon
the presentation and surrender of the Notes, the Securities Administrator shall
distribute to the remaining Noteholders, in accordance with their respective
interests, all distributable amounts remaining in the Payment Account. Upon
deposit by the Master Servicer of such distributable amounts, and following such
final Payment Date, the Indenture Trustee shall, or shall cause the Custodian
to, release promptly to the Issuer or its
-42-
designee the Mortgage Files for the remaining Mortgage Loans, and the Master
Servicer Collection Account 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.
-43-
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.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS,
INC., as Depositor
By: /S/ ▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS
TRUST, SERIES 2005-2, as Issuer
By: WILMINGTON TRUST COMPANY,
but solely as Owner Trustee
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Financial Services Officer
HSBC BANK USA, NATIONAL
ASSOCIATION, as Indenture Trustee
By: /S/ ▇▇▇▇▇ ▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING,
INC., as Seller and Company
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
-44-
▇▇▇▇▇ FARGO BANK, N.A., as Master
Servicer
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, N.A., as Securities
Administrator
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of August, 2005 before me, a notary public in and for said
State, personally appeared ▇▇▇ ▇▇▇▇▇▇▇, known to me to be a(n) Authorized
Signatory of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, 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.
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Notary Public
[Notarial Seal]
-46-
STATE OF DELAWARE )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 31st day of August, 2005 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇, known to me to be a(n) Senior
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.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Notary Public
[Notarial Seal]
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of August, 2005 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇ ▇▇▇, known to me to be a(n) Vice President of
HSBC Bank USA, 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.
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Notary Public
[Notarial Seal]
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 31st day of August, 2005 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, known to me to be a(n) Vice
President of ▇▇▇▇▇ Fargo Bank, N.A., 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.
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Notary Public
[Notarial Seal]
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 31st day of August, 2005 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ known to me to be a(n) Vice President
of ▇▇▇▇▇ Fargo Bank, N.A., 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.
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Notary Public
[Notarial Seal]
-50-
-51-
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[PROVIDED UPON REQUEST]
A-1
EXHIBIT B
REQUEST FOR RELEASE OF DOCUMENTS
To: HSBC Bank USA, National Association
Corporate Trust & Loan Agency
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, N.A. (the "Custodian")
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Inventory Control
RE: Sale and Servicing Agreement, dated as of August 31, 2005 (the "Sale and
Servicing Agreement"), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2005-2 as Issuer, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as
Depositor, HSBC Bank USA, National Association, as Indenture Trustee,
▇▇▇▇▇ Fargo Bank, N.A., as Securities Administrator and Master Servicer
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc. , as Seller and Company.
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, or if applicable California Mortgage Loan, Paid in Full
and proceeds have been deposited into the Payment Account
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation
_____ 5. Nonliquidation Reason: ____________________
B-1
By: _______________________
B-2
(authorized signer)
Issuer:____________________
Address:___________________
Date:______________________
B-3
EXHIBIT C-1
▇▇▇▇▇ FARGO SERVICING AGREEMENT
[Provided Upon Request]
C-1-1
EXHIBIT C-2
PHH SERVICING AGREEMENT
[Provided Upon Request]
C-2-1
EXHIBIT D-1
▇▇▇▇▇ FARGO ASSIGNMENT AGREEMENT
[Provided Upon Request]
D-1-1
EXHIBIT D-2
PHH ASSIGNMENT AGREEMENT
[Provided Upon Request]
D-2-1
EXHIBIT E
MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of August 31, 2005, as
amended and supplemented by any and all amendments hereto (collectively, the
"Agreement"), by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC., a Delaware
corporation (the "Mortgage Loan Seller") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS,
INC., a Delaware corporation (the "Purchaser").
Upon the terms and subject to the conditions of this Agreement, the
Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase,
certain conventional, first lien mortgage loans secured primarily by one- to
four-family residential properties and individual condominium units
(collectively, the "Mortgage Loans") as described herein. The Purchaser has
established ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Series 2005-2, a Delaware
statutory trust (the "Issuer") pursuant to a Short Form Trust Agreement, dated
as of August 19, 2005, as amended and restated on August 31, 2005 (the "Trust
Agreement"), among the Purchaser, Wilmington Trust Company (the "Owner Trustee")
and ▇▇▇▇▇ Fargo Bank, N.A. (the "Securities Administrator"). The Purchaser
intends to sell the Mortgage Loans to the Issuer pursuant to a Sale and
Servicing Agreement, dated as of August 31, 2005 (the "Sale and Servicing
Agreement") among the Purchaser, the Issuer, the Mortgage Loan Seller, HSBC Bank
USA, National Association, as indenture trustee (the "Indenture Trustee") and
▇▇▇▇▇ Fargo Bank, N.A. as securities administrator (in such capacity, the
"Securities Administrator") and as master servicer (in such capacity, the
"Master Servicer"). The Issuer, pursuant to an Indenture, dated as of August 31,
2005 (the "Indenture") among the Issuer, the Indenture Trustee and the
Securities Administrator intends to pledge the Mortgage Loans to the Indenture
Trustee and, issue and transfer to the Purchaser the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors Trust, Series 2005-2, Mortgage-Backed Notes, Series MLCC 2005-2 and
the Certificates issued pursuant to the Trust Agreement (the "Certificates").
The Certificates will be transferred by the Purchaser to the Mortgage Loan
Seller as partial consideration for the sale of the Mortgage Loans. The Master
Servicer will master service the Mortgage Loans on behalf of the Issuer pursuant
to the Sale and Servicing Agreement. The servicing of the Mortgage Loans will be
provided by ▇▇▇▇▇ Fargo Bank, N.A. and PHH Mortgage Corporation pursuant to its
related servicing agreement as specified in Appendix A to the Indenture which
(other than with respect to certain rights of the Mortgage Loan Seller against
the related servicer) will be assigned to the Issuer on the Closing Date
pursuant to the related Assignment Agreement. The representations and warranties
made by the related Underlying Seller and the remedies for breach thereof will
be assigned to the Issuer on the Closing Date pursuant to, and to the extent
provided in the related Assignment Agreement.
The Purchaser has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (Number 333-127233)
relating to its Mortgage-Backed Notes and the offering of certain series thereof
(including certain classes of the Notes) from time to time in accordance with
Rule 415 under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder (the "Securities Act").
Such registration statement, when it became effective under the Securities Act,
and the prospectus relating to the public offering of certain classes of the
Notes by the Purchaser (the "Public Offering"), as from time to time each is
amended or supplemented pursuant to the
Securities Act or otherwise, are referred to herein as the "Registration
Statement" and the "Prospectus," respectively. The "Prospectus Supplement" shall
mean that supplement, dated August 31, 2005 to the Prospectus, dated August 26,
2005, relating to certain classes of the Notes. With respect to the Public
Offering of certain classes of the Notes, the Purchaser and ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") have entered into a terms
agreement dated as of August 31, 2005 to an underwriting agreement dated August
31, 2005, between the Purchaser and ▇▇▇▇▇▇▇ ▇▇▇▇▇ (collectively, the
"Underwriting Agreement").
Now, therefore, in consideration of the premises and the mutual
agreements set forth herein, the parties hereto agree as follows:
SECTION 1. Definitions. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in Appendix A to the Indenture. The following other terms are defined
as follows:
Additional Collateral: (i) With respect to any Mortgage 100(SM)
Loan, the Securities Account and the financial assets held therein subject to a
security interest pursuant to the related Mortgage 100(SM) Pledge Agreement, or
(ii) with respect to any Parent Power(R) Mortgage Loan, the related Parent
Power(R) Agreement
Additional Collateral Mortgage Loan: Each Mortgage Loan, as
identified on the Mortgage Loan Schedule, as to which Additional Collateral was
required to be provided at the closing thereof
Adjustable Rate Mortgage Loan: An Adjustable Rate Mortgage Loan
purchased pursuant to this Agreement.
Agreement: This Master Mortgage Loan Purchase Agreement including
all exhibits hereto, amendments hereof and supplements hereto.
Closing Date: August 31, 2005.
Control Agreement: With respect to each Mortgage 100(SM) Loan, the
▇▇▇▇▇▇▇ ▇▇▇▇▇ Pledged Collateral Account Control Agreement between the Guarantor
or Mortgagor, as applicable, the Mortgage Loan Seller and ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, pursuant to which the Guarantor or Mortgagor, as
applicable, has granted a security interest to the Mortgage Loan Seller in a
Securities Account.
Co-op Lease: With respect to a Co-op Loan, the lease with respect to
a dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Co-op Stock: With respect to a Co-op Loan, the single outstanding
class of stock, partnership interest or other ownership instrument in the
related residential cooperative housing corporation.
D-2-2
Cut-off Date: August 1, 2005.
Cut-off Date Balance: $1,220,525,429.03.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by
a Substitute Mortgage Loan.
Due Date: With respect to each Mortgage Loan, the first day in each
month.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio of the original outstanding principal amount of the Mortgage Loan to (i)
the Appraised Value of the related Mortgaged Property at origination with
respect to a Refinanced Mortgage Loan, and (ii) the lesser of the Appraised
Value of the related Mortgaged Property at origination or the purchase price of
the related Mortgaged Property with respect to all other Mortgage Loans.
▇▇▇▇▇▇▇ ▇▇▇▇▇: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or its successors in
interest.
Mortgage: The mortgage or deed of trust creating a first lien on an
interest in real property securing a Mortgage Note.
Mortgage File: The items referred to in Exhibit 1 and Exhibit 2
pertaining to a particular Mortgage Loan and any additional documents required
to be added to such documents pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne by a
Mortgage Note as stated therein.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement as identified on the Mortgage Loan Schedule attached as Exhibit
3, which Mortgage Loan includes without limitation the Mortgage File, any
related Mortgage 100sm Pledge Agreement or Parent Power Agreement, the Control
Agreement, the Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds, any escrow
accounts related to the Mortgage Loan, and all other rights, benefits, proceeds
and obligations arising from or in connection with such Mortgage Loan, excluding
replaced or repurchased mortgage loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to a Mortgage Loan that is not a
Co-op Loan, the underlying real property securing repayment of a Mortgage Note,
consisting of a fee simple parcel of real estate or a leasehold estate, the term
of which is equal to or longer than the term of the related Mortgage Note. With
respect to a Co-op Loan, the related Co-op Stock and Co-op Lease securing the
indebtedness of the Mortgagor under the related Mortgage Loan.
Mortgagor: The obligor(s) on a Mortgage Note.
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Net Rate: For each Mortgage Loan, the Mortgage Interest Rate for
such Mortgage Loan less the Servicing Fee Rate and the Lender-Paid PMI Rate (if
applicable) expressed as a per annum rate.
Offered Notes: Shall mean the Class 1-A, Class 2-A and Class 3-A
Notes issued pursuant to the Indenture.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to the
Indenture Trustee.
Originators: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation and ▇▇▇▇▇ Fargo Bank,
N.A., each an "Originator."
Person: Any legal person, including any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pledge Agreement: Any Mortgage 100(SM) Pledge Agreement or Parent
Power(R) Guaranty and Security Agreement for Securities Account related to an
Additional Collateral Mortgage Loan.
Primary Mortgage Insurance Policy: Each policy of primary mortgage
insurance satisfying the requirements of the Servicing Standards.
Purchase Price: With respect to any Mortgage Loan required to be
purchased by the Mortgage Loan Seller pursuant to the applicable provisions of
this Agreement, an amount equal to the sum of (i) 100% of the principal
remaining unpaid on such Mortgage Loan as of the date of purchase (including if
a foreclosure has already occurred, the principal balance of the related
Mortgage Loan at the time the Mortgaged Property was acquired), and (ii) accrued
and unpaid interest thereon at the Mortgage Interest Rate through and including
the last day of the month of purchase (iii) any costs and damages incurred by
the Trust in connection with any violation by such Mortgage Loan of any
predatory or abusive-lending law.
Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., its successors in
interest and permitted assigns.
Rating Agencies: S&P and Moody's, each a "Rating Agency."
S&P: Standard & Poor's, a division of The McGraw Hill Companies,
Inc., or its successors in interest.
Securities Account: With respect to any Additional Collateral
Mortgage Loans, the account, together with the financial assets held therein,
that are the subject of the related Pledge Agreement.
Securities Act: The Securities Act of 1933, as amended.
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Security Instrument: A written instrument creating a valid first
lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.
Servicing Agreement: Shall have the meaning assigned to such term in
Appendix A to the Indenture.
Servicers: ▇▇▇▇▇ Fargo Bank, N.A. and PHH Mortgage Corporation, each
a "Servicer."
Substitute Mortgage Loan: A mortgage loan substituted for a Deleted
Mortgage Loan which must meet on the date of such substitution the requirements
stated herein and in the Sale and Servicing Agreement; upon such substitution,
such mortgage loan shall be a "Mortgage Loan" hereunder.
Surety Bond: The limited purpose surety bond (Policy No. AB0039BE),
dated February 28, 1996 in respect to Mortgage Loans originated by ▇▇▇▇▇▇▇ ▇▇▇▇▇
Credit Corporation, issued by the Surety Bond Issuer for the benefit of certain
beneficiaries, but only to the extent that such Surety Bond covers any
Additional Collateral Mortgage Loan.
Underwriting Standards: As to each Mortgage Loan, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Credit Corporation's written underwriting guidelines in effect as of the
origination date of the Mortgage Loan(s).
Value: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.
SECTION 2. Purchase and Sale of the Mortgage Loans and Related
Rights. (a) Upon satisfaction of the conditions set forth in Section 10 hereof,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate Cut-off Date Balance of $1,220,525,429.03.
(b) The closing for the purchase and sale of the Mortgage Loans and
the closing for the issuance of the Notes will take place on the Closing Date at
the office of the Purchaser's counsel in New York, New York or such other place
as the parties shall agree.
(c) Upon the satisfaction of the conditions set forth in Section 10
hereof, on the Closing Date, in consideration of the purchase of the Mortgage
Loans, the Purchaser shall pay to the Mortgage Loan Seller an amount equal to
the net sale proceeds of the Offered Notes plus accrued interest (the "Purchase
Price") in immediately available funds by wire transfer to such account or
accounts as shall be designated by the Mortgage Loan Seller.
(d) In addition to the foregoing, on the Closing Date the Mortgage
Loan Seller assigns to the Purchaser all of its right, title and interest in the
▇▇▇▇▇ Fargo Servicing Agreement (other than its right to enforce the
representations and warranties set forth therein) and the PHH
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Servicing Agreement (other than its right to enforce the representations and
warranties set forth therein).
(e) The Seller and the Purchaser each acknowledge that on the
Closing Date, (i) the Seller will immediately transfer the Mortgage Loans to the
Purchaser and (ii) the Purchaser will then immediately deposit the Mortgage
Loans into the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Series 2005-2.
SECTION 3. Mortgage Loan Schedules. The Mortgage Loan Seller agrees
to provide to the Purchaser as of the date hereof a preliminary listing of the
Mortgage Loans (the "Preliminary Mortgage Loan Schedule") setting forth the
information listed on Exhibit 3 to this Agreement with respect to each of the
Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes to
the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall provide
to the Purchaser as of the Closing Date a final schedule (the "Final Mortgage
Loan Schedule") setting forth the information listed on Exhibit 3 to this
Agreement with respect to each of the Mortgage Loans being sold by the Mortgage
Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "Amendment"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.
SECTION 4. Mortgage Loan Transfer.
(a) The Purchaser will be entitled to all scheduled payments of
principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereon, other than
scheduled principal and interest due on or before the Cut-off Date but received
after the Cut-off Date. The Mortgage Loan Seller will be entitled to all
scheduled payments of principal and interest on the Mortgage Loans due on or
before the Cut-off Date (including payments collected after the Cut-off Date)
and all payments thereon, other than scheduled principal and interest due after
the Cut-off Date but received on or before the Cut-off Date. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.
(b) Pursuant to various conveyancing documents to be executed on the
Closing Date and pursuant to the Sale and Servicing Agreement, the Purchaser
will sell, assign and transfer on the Closing Date all of its right, title and
interest in and to the Mortgage Loans to the Issuer and, pursuant to the
Indenture, the Issuer will assign all of its right, title and interest to the
Mortgage Loans to the Indenture Trustee for the benefit of the Noteholders, to
secure the Notes issued pursuant to the Indenture. In connection with such
transfers and assignments of the Mortgage Loans, the Mortgage Loan Seller has
delivered or will deliver or cause to be delivered to the Indenture Trustee, or
the Custodian on its behalf, by the Closing Date or such later date as is agreed
to by the Purchaser and the Mortgage Loan Seller (each of the Closing Date and
such later date is referred to as a "Mortgage File Delivery Date"), the items of
each Mortgage File, provided, however, that in lieu of the foregoing, the
Mortgage Loan Seller may deliver the
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following documents, under the circumstances set forth below: (i) 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
the Security Instruments required to be included thereon, be delivered to
recording offices for recording and have not been returned to the Mortgage Loan
Seller in time to permit their delivery as specified above, the Mortgage Loan
Seller may deliver a true copy thereof with a certification by the Mortgage Loan
Seller, on the face of such copy, substantially as follows: "Certified to be a
true and correct copy of the original, which has been transmitted for
recording"; (ii) in lieu of the Security Instrument, assignments to the
Indenture Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents or if the originals are
lost (in each case, as evidenced by a certification from the Mortgage Loan
Seller to such effect) the Mortgage Loan Seller may deliver photocopies of such
documents containing an original certification by the judicial or other
governmental authority of the jurisdiction where such documents were recorded;
(iii) in lieu of the Mortgage Notes relating to the Mortgage Loans, each
identified in the list delivered by the Purchaser to the Indenture Trustee on
the Closing Date and attached hereto as Exhibit 5, the Mortgage Loan Seller may
deliver lost note affidavits and indemnities of the Mortgage Loan Seller; and
(iv) the Mortgage Loan Seller shall not be required to deliver intervening
assignments or Mortgage Note endorsements between the related Underlying Seller
and the Mortgage Loan Seller, between the Mortgage Loan Seller and the
Depositor, between the Depositor and the Issuer and between the Issuer and the
Indenture Trustee; and provided further, however, that in the case of Mortgage
Loans which have been prepaid in full after the Cut-off Date and prior to the
Closing Date, the Mortgage Loan Seller, in lieu of delivering the above
documents, may deliver to the Indenture Trustee and the Custodian a
certification by the Mortgage Loan Seller or the Master Servicer to such effect
and shall deposit all amounts paid in respect of such Mortgage Loans in the
Master Servicer Collection Account on the Closing Date. The Mortgage Loan Seller
shall deliver such original documents (including any original documents as to
which certified copies had previously been delivered) or such certified copies
to the Indenture Trustee promptly after they are received. The Mortgage Loan
Seller shall cause the Mortgage and intervening assignments, if any, and the
assignment of the Security Instrument to be recorded not later than 180 days
after the Closing Date, unless such assignment is not required to be recorded
under the terms set forth in Section 6(a) hereof.
(c) The Mortgage Loan Seller and the Purchaser acknowledge hereunder
that all of the Mortgage Loans and the related servicing will ultimately be
assigned to HSBC Bank USA, National Association, as Indenture Trustee on behalf
of the Noteholders, on the date hereof.
SECTION 5. Examination of Mortgage Files.
(a) On or before the Mortgage File Delivery Date, the Mortgage Loan
Seller will have made the Mortgage Files available to the Purchaser or its agent
for examination which may be at the offices of the Indenture Trustee or the
Mortgage Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that
the Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure, repurchase, substitution or other relief as provided in
this Agreement. In furtherance of the foregoing, the Mortgage Loan Seller shall
make the Mortgage
D-2-7
Files available to the Purchaser or its agent from time to time so as to permit
the Purchaser to confirm the Mortgage Loan Seller's compliance with the delivery
and recordation requirements of this Agreement and the Sale and Servicing
Agreement. In addition, upon request of the Purchaser, the Mortgage Loan Seller
agrees to provide to the Purchaser, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and to any investors or
prospective investors in the Notes information regarding the Mortgage Loans and
their servicing, to make the Mortgage Files available to the Purchaser, ▇▇▇▇▇▇▇
▇▇▇▇▇ and to such investors or prospective investors (which may be at the
offices of the Mortgage Loan Seller and/or the Mortgage Loan Seller's custodian)
and to make available personnel knowledgeable about the Mortgage Loans for
discussions with the Purchaser, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and such investors or prospective
investors, upon reasonable request during regular business hours, sufficient to
permit the Purchaser, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and such investors or potential investors to
conduct such due diligence as any such party reasonably believes is appropriate.
(b) Pursuant to the Custodial Agreement, on the Closing Date the
Custodian, on behalf of the Indenture Trustee, for the benefit of the
Noteholders, will review items of the Mortgage Files as set forth on Exhibit 1
and will deliver to the Mortgage Loan Seller, the Purchaser and the Issuer a
certification in the form attached as Exhibit One to the Custodial Agreement.
(c) Pursuant to the Custodial Agreement, the Indenture Trustee will
review or shall cause the Custodian to review the Mortgage Files within 180 days
of the Closing Date and will deliver to the Mortgage Loan Seller a final
certification substantially in the form of Exhibit Two to the Custodial
Agreement. If the Indenture Trustee or Custodian, as its agent, is unable to
deliver a final certification with respect to the items listed in Exhibit 2 due
to any document that is missing, has not been executed, is unrelated, determined
on the basis of the Mortgagor name, original principal balance and loan number,
to the Mortgage Loans identified in the Final Mortgage Loan Schedule (a
"Material Defect"), the Indenture Trustee or Custodian, as its agent, shall
notify the Mortgage Loan Seller of such Material Defect. The Mortgage Loan
Seller shall correct or cure any such Material Defect within 90 days from the
date of notice from the Indenture Trustee or Custodian, as its agent, of the
Material Defect and if the Mortgage Loan Seller does not correct or cure such
Material Defect within such period and such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Mortgage Loan Seller will, in accordance with the terms of the Sale and
Servicing Agreement, within 90 days of the date of notice, provide the Indenture
Trustee with a Substitute Mortgage Loan (if within two years of the Closing
Date) or purchase the related Mortgage Loan at the applicable Purchase Price;
provided, however, that if such defect relates solely to the inability of the
Mortgage Loan Seller to deliver the original security instrument or intervening
assignments thereof, or a certified copy because the originals of such
documents, or a certified copy, have not been returned by the applicable
jurisdiction, the Mortgage Loan Seller shall not be required to purchase such
Mortgage Loan if the Mortgage Loan Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 360 days after
the Closing Date. The foregoing repurchase obligation shall not apply in the
event that the Mortgage Loan Seller cannot deliver such original or copy of any
document submitted for recording to the appropriate recording office in the
applicable jurisdiction because such document has not been returned by such
office; provided that the Mortgage Loan Seller shall instead deliver a recording
receipt of such recording office or, if such receipt is not available, a
certificate of the Mortgage Loan Seller confirming that such documents have been
accepted for recording, and delivery to
D-2-8
the Indenture Trustee or Custodian, as its agent, shall be effected by the
Mortgage Loan Seller within thirty days of its receipt of the original recorded
document.
(d) At the time of any substitution, the Mortgage Loan Seller shall
deliver or cause to be delivered the Substitute Mortgage Loan, the related
Mortgage File and any other documents and payments required to be delivered in
connection with a substitution pursuant to the Sale and Servicing Agreement. At
the time of any purchase or substitution, the Indenture Trustee in accordance
with the terms of the Sale and Servicing Agreement shall (i) assign to the
Mortgage Loan Seller and cause the Custodian to release the documents
(including, but not limited to, the Mortgage, Mortgage Note and other contents
of the Mortgage File) in the possession of the Custodian relating to the Deleted
Mortgage Loan and (ii) execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be necessary to vest in the
Mortgage Loan Seller title to such Deleted Mortgage Loan.
SECTION 6. Recordation of Assignments of Mortgage.
(a) The Mortgage Loan Seller will, promptly after the Closing Date,
cause each Mortgage and each assignment of Mortgage from the Mortgage Loan
Seller to the Indenture Trustee, and all unrecorded intervening assignments, if
any, delivered on or prior to the Closing Date, to be recorded in all recording
offices in the jurisdictions where the related Mortgaged Properties are located;
provided, however, the Mortgage Loan Seller need not cause to be recorded any
assignment which relates to a Mortgage Loan in any jurisdiction under the laws
of which, as evidenced by an Opinion of Counsel delivered by the Mortgage Loan
Seller to the Indenture Trustee and the Rating Agencies, the recordation of such
assignment is not necessary to protect the Indenture Trustee's interest in the
related Mortgage Loan; provided, however, notwithstanding the delivery of any
Opinion of Counsel, each assignment of Mortgage shall be submitted for recording
by the Mortgage Loan Seller in the manner described above, at no expense to the
Trust Fund or Indenture Trustee, upon the earliest to occur of (i) reasonable
direction by the Holders of Notes evidencing, in the aggregate, not less than
25% of the Voting Rights, (ii) the occurrence of an Event of Default, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgage
Loan Seller, (iv) the occurrence of a servicing transfer as described in Section
6.02 of the Sale and Servicing Agreement or (v) with respect to any one
assignment of Mortgage, the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage.
While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Indenture Trustee a certified copy of such Mortgage or assignment. In the event
that, within 180 days of the Closing Date, the Indenture Trustee has not
provided an Opinion of Counsel as described above or received evidence of
recording with respect to each Mortgage Loan delivered to the Purchaser pursuant
to the terms hereof or as set forth above, the failure to provide evidence of
recording or such Opinion of Counsel shall be considered a Material Defect, and
the provisions of Section 5(c) and (d) shall apply. All customary recording fees
and reasonable expenses relating to the recordation of the assignments of
mortgage to the Indenture Trustee or the Opinion of Counsel, as the case may be,
shall be borne by the Mortgage Loan Seller.
D-2-9
(b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser to secure a debt or
other obligation of the Mortgage Loan Seller. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held by a
court of competent jurisdiction to continue to be property of the Mortgage Loan
Seller, then (i) this Agreement shall also be deemed to be a security agreement
within the meaning of Articles 8 and 9 of the applicable Uniform Commercial
Code; (ii) the transfer of the Mortgage Loans provided for herein shall be
deemed to be a grant by the Mortgage Loan Seller to the Purchaser of a security
interest in all of the Mortgage Loan Seller's right, title and interest in and
to the Mortgage Loans and all amounts payable to the holders of the Mortgage
Loans in accordance with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, to the extent the Purchaser would otherwise be entitled to own
such Mortgage Loans and proceeds pursuant to Section 4 hereof, including all
amounts, other than investment earnings, from time to time held or invested in
any accounts created pursuant to the Indenture or the Sale and Servicing
Agreement, whether in the form of cash, instruments, securities or other
property; (iii) the possession by the Purchaser, the Issuer or the Indenture
Trustee of Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-313 (or comparable provision) of the applicable
Uniform Commercial Code; and (iv) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant to any
provision hereof or pursuant to the Sale and Servicing Agreement and any
subsequent assignment pursuant to the Indenture shall also be deemed to be an
assignment of any security interest created hereby. The Mortgage Loan Seller and
the Purchaser shall, to the extent consistent with this Agreement, take such
actions as may be reasonably necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of the
Indenture.
SECTION 7. Representations and Warranties of Mortgage Loan Seller
Concerning the Mortgage Loans. The Mortgage Loan Seller hereby represents and
warrants to the Purchaser as of the Closing Date or such other date as may be
specified below with respect to each Mortgage Loan being sold by it:
(a) The information set forth in the Mortgage Loan Schedule is
true and correct in all material respects as of the Cut-off Date;
(b) Each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulation Section 1.8600
2(a)(1);
D-2-10
(c) As of the related Closing Date, the Mortgage Loan is not
delinquent in payment more than 30 days and the Mortgage Loan has not been
dishonored; the Mortgage Loan has never been delinquent in payment for more than
60 days and has not more than once during the twelve months preceding the
Cut-Off Date been delinquent in payment for more than 30 days; there are no
material defaults under the terms of the Mortgage Loan; the Mortgage Loan Seller
has not advanced funds, or induced, solicited or knowingly received any advance
of funds from a party other than the owner of the Mortgaged Property subject to
the Mortgage, directly or indirectly, for the payment of any amount required by
the Mortgage Loan;
(d) With respect to those Mortgage Loans as to which the
Mortgagors are required to deposit funds into an escrow account for payment of
taxes, assessments, insurance premiums and similar items as they become due,
there are no delinquent taxes, ground rents, water charges, sewer rents,
assessments or other outstanding charges which constitute a lien on the related
Mortgaged Property, and all escrow deposits have been collected, are under the
control of the Servicer, and have been applied to the payment of such items in a
timely fashion, in accordance with such Mortgage. No escrow deposits or escrow
payments or other charges or payments due the Servicer have been capitalized
under the related Mortgage or Mortgage Note. With respect to those Mortgage
Loans for which escrow deposits are not required, to the best of the Mortgage
Loan Seller's knowledge, there are no delinquent taxes or other outstanding
charges affecting the related Mortgaged Property which constitute a lien on the
related Mortgaged Property;
(e) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments contained in the Mortgage File, approved, if necessary, by the
insurer under any Primary Mortgage Insurance Policy and recorded in all places
necessary to maintain the first priority of the lien, the substance of which
waiver, alteration or modification is reflected on the Mortgage Loan Schedule.
No Mortgagor has been released, in whole or in part, except in connection with
an assumption agreement which assumption agreement is part of the Mortgage File
and the terms of which are reflected in the Mortgage Loan Schedule;
(f) Neither the Mortgage Note nor the Mortgage is subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and to the best
of the Mortgage Loan Seller's knowledge, no such right of rescission, set-off,
counterclaim or defense has been asserted by any Person with respect thereto;
(g) All buildings upon the Mortgaged Property are required to be
insured by a generally acceptable insurer against loss by fire, hazards of
extended coverage and such other hazards as are customarily included in extended
coverage in the area where the Mortgaged Property is located, pursuant to
standard hazard insurance policies in an amount which is equal to the lesser of
(A) the replacement cost of the improvements securing such Mortgage Loan or (B)
the principal balance owing on such Mortgage Loan. To the best knowledge of the
Mortgage Loan Seller, all such standard hazard policies are in effect. On the
date of origination, such standard hazard policies contained a standard
mortgagee clause naming the Mortgage Loan
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Seller or the Originator of the Mortgage Loan and their respective successors in
interest as mortgagee and, to the best knowledge of the Mortgage Loan Seller,
such clause is still in effect and, to the best of the Mortgage Loan Seller's
knowledge, all premiums due thereon have been paid. If the Mortgaged Property is
located in an area identified by the Federal Emergency Management Agency as
having special flood hazards under the National Flood Insurance Act of 1994, as
amended, such Mortgaged Property is covered by flood insurance in the amount
required under the National Flood Insurance Act of 1994. The Mortgage obligates
the Mortgagor thereunder to maintain all such insurance at Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to maintain such insurance at Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;
(h) At the time of the origination of such Mortgage Loan, all
requirements of any federal, state or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws required to be complied
with by the Originator of the Mortgage Loan and applicable to the Mortgage Loan
have been complied with in all material respects;
(i) The Mortgage has not been satisfied as of the Closing Date,
canceled or subordinated, in whole, or rescinded, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part (except for
a release that does not materially impair the security of the Mortgage Loan or a
release the effect of which is reflected in the Loan-to-Value Ratio for the
Mortgage Loan as set forth in the Mortgage Loan Schedule), nor to the best of
the Mortgage Loan Seller's knowledge has any instrument been executed that would
effect any such release, cancellation, subordination or rescission;
(j) Ownership of the Mortgaged Property is held in fee simple or a
leasehold estate. With respect to Mortgage Loans that are secured by a leasehold
estate, (i) the lease is valid, in full force and effect, and conforms to all of
FNMA's requirements for leasehold estates; (ii) all rents and other payments due
under the lease have been paid; (iii) the lessee is not in default under any
provision of the lease; (iv) the term of the lease exceeds the maturity date of
the related Mortgage Loan by at least five (5) years; and (v) the terms of the
lease provide a Mortgagee with an opportunity to cure any defaults. Except as
permitted by the fourth sentence of this paragraph (i), the Mortgage is a valid,
subsisting and enforceable first lien on the Mortgaged Property, including all
buildings on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems affixed to such
buildings, and all additions, alterations and replacements made at any time with
respect to the foregoing securing the Mortgage Note's original principal
balance. The Mortgage and the Mortgage Note do not contain any evidence on their
face of any security interest or other interest or right thereto. Such lien is
free and clear of all adverse claims, liens and encumbrances having priority
over the first lien of the Mortgage subject only to (1) the lien of
non-delinquent current real property taxes and assessments not yet due and
payable, (2) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording which are
acceptable to mortgage lending institutions generally, or which are specifically
referred to in the lender's title insurance policy delivered to the Originator
of the Mortgage Loan and either (A) which are referred to or otherwise
considered in the appraisal made for the Originator of the Mortgage Loan, or (B)
which do not in the aggregate adversely affect the appraised value of the
Mortgaged Property as set forth in such appraisal, and (3) other matters to
which like properties
D-2-12
are commonly subject which do not in the aggregate materially interfere with the
benefits of the security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property. Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable first lien and first priority security interest on
the property described therein. With respect to each Co-op Loan, the security
instruments create a valid, enforceable and subsisting first priority security
interest in the Co-op Lease and Co-op Stock securing the related Mortgage Note
subject to only to (a) the lien of the related cooperative for unpaid
assessments representing the Mortgagor's pro rata share of payments for a
blanket mortgage, if any, current and future real property taxes, insurance
premiums, maintenance fees and other assessments to which like collateral is
commonly subject, and (b) other matters to which the collateral is commonly
subject which do not materially interfere with the benefits of the security
intended to be provided; provided, however, that the related Co-op Loan may be
subordinated or otherwise subject to the lien of a Mortgage on the cooperative
building;
(k) The Mortgage Note is not subject to a third party's security
interest or other rights or interest therein;
(l) The Mortgage Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms subject to bankruptcy, insolvency and
other laws of general application affecting the rights of creditors. All parties
to the Mortgage Note and the Mortgage had the legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage. The
Mortgage Note and the Mortgage have been duly and properly executed by such
parties. The proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvements and as to disbursements
of any escrow funds therefor have been complied with;
(m) Mortgage Loan Seller has good title to, and the full right to
transfer and sell, the Mortgage Loan free and clear of any encumbrance, equity,
lien, pledge, charge, claim or security interest, including, to the best
knowledge of the Mortgage Loan Seller, any lien, claim or other interest arising
by operation of law;
(n) Each Mortgage Loan is covered by an ALTA lender's title
insurance policy or other generally acceptable form of policy or insurance
acceptable to FNMA or FHLMC, issued by a title insurer acceptable to FNMA or
FHLMC and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained in paragraph
(ix)(1) (2) and (3) above) the Mortgage Loan Seller, its successors and assigns,
as to the first priority lien of the Mortgage in the original principal amount
of the Mortgage Loan. The Mortgage Loan Seller is the sole insured of such
lender's title insurance policy, such title insurance policy has been duly and
validly endorsed to the Purchaser or the assignment to the Purchaser of the
Mortgage Loan Seller's interest therein does not require the consent of or
notification to the insurer and such lender's title insurance policy is in full
force and effect and will be in full force and effect upon the consummation of
the transactions contemplated by this Agreement. To the best of the Mortgage
Loan Seller's knowledge, no claims have been made under such lender's title
insurance policy, and no prior holder of the
D-2-13
related Mortgage has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy;
(o) To the best of the Mortgage Loan Seller's knowledge, there is
no default, breach, violation or event of acceleration existing under the
Mortgage or the related Mortgage Note and no event which, with the passage of
time or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event permitting acceleration, except
for any Mortgage Loan payment which is not late by more than 30 days, and the
Mortgage Loan Seller has not waived any default, breach, violation or event
permitting acceleration;
(p) To the best of the Mortgage Loan Seller's knowledge, there are
no mechanics' or similar liens or claims which have been filed for work, labor
or material (and, to the best of the Mortgage Loan Seller's knowledge, no rights
are outstanding that under law could give rise to such lien) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(q) To the best of the Mortgage Loan Seller's knowledge, all
improvements subject to the Mortgage, lay wholly within the boundaries and
building restriction lines of the Mortgaged Property (and wholly within the
project with respect to a condominium unit) and no improvements on adjoining
properties encroach upon the Mortgaged Property except those which are insured
against by the title insurance policy referred to in paragraph (xiii) above and
all improvements on the property comply with all applicable zoning and
subdivision laws and ordinances;
(r) Each Mortgage Loan was originated by the Mortgage Loan Seller
or by a savings association, a savings bank, a commercial bank or similar
banking institution that is supervised and examined by a Federal or state
banking authority, a mortgagee approved by the Secretary of HUD pursuant to
Section 203 and 211 of the National Housing Act, or a FNMA- or FHLMC-approved
seller. Each Mortgage Loan was underwritten generally in accordance with the
Underwriting Standards as in effect at the time of origination. The Mortgage
contains the usual and customary provision of the Mortgage Loan Seller at the
time of origination for the acceleration of the payment of the unpaid principal
balance of the Mortgage Loan if the related Mortgaged Property is sold without
the prior consent of the mortgagee thereunder;
(s) The Mortgaged Property at origination or acquisition was and,
to the best of the Mortgage Loan Seller's knowledge, currently is free of
material damage and waste and at origination there was, and to the best of the
Mortgage Loan Seller's knowledge there currently is, no proceeding pending for
the total or partial condemnation thereof;
(t) The related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, including, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale or judicial foreclosure, and
(2) otherwise by judicial foreclosure. The Mortgage Loan Seller has no knowledge
of any homestead or other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage;
D-2-14
(u) If the Mortgage constitutes a deed of trust, a trustee, duly
qualified if required under applicable law to act as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable to the trustee under the deed of trust,
except in connection with a trustee's sale or attempted sale after default by
the Mortgagor;
(v) With respect to each Mortgage Loan, there is either (i) an
automated property valuation report or (ii) an appraisal on a FNMA-approved form
(or a narrative residential appraisal) of the related Mortgaged Property that
conforms to the applicable requirements of the Financial Institutions Reform
Recovery and Enforcement Act and that was signed prior to the approval of such
Mortgage Loan application by a qualified appraiser, appointed by the Originator
of such Mortgage Loan, who has no interest, direct or indirect, in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation is
not affected by the approval or disapproval of such Mortgage Loan;
(w) No Mortgage Loan contains "subsidized buydown" or "graduated
payment" features;
(x) The Mortgaged Property is a single-family (one- to four-unit)
dwelling residence erected thereon, or an individual condominium unit in a
condominium, or a Co-operative Apartment or an individual unit in a planned unit
development or in a de minimis planned unit development as defined by FNMA. No
such residence is a mobile home or a manufactured dwelling which is not
permanently attached to the land;
(y) No Mortgage Loan provides for negative amortization;
(z) No Mortgage Loan had an original term in excess of thirty (30)
years;
(aa) No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 and no Mortgage Loan is "high cost" as defined by any
applicable federal, state or local predatory or abusive lending law;
(bb) Each Mortgage Loan at the time it was made complied in all
material respects with applicable local, state and federal laws, including, but
not limited to, all applicable predatory or abusive lending laws; and
(cc) With respect to each Additional Collateral Mortgage Loan:
(i) Prior to its assignment to the Purchaser, the Mortgage Loan
Seller had a first priority perfected security interest in each Securities
Account, subject to the rights of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, and following the Mortgage Loan Seller's assignment of the
Pledge Agreements and related security interest and ▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Corporation's acknowledgement that it shall administer the Control
Agreement for the benefit of the Purchaser, the Purchaser has a first
priority perfected security interest in each Securities Account, subject
to the rights of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated;
D-2-15
(ii) The Additional Collateral Mortgage Loan is insured under the
terms and provisions of the Surety Bond, subject to the limitations set
forth therein;
(iii) The assignment of rights to the Purchaser under the Surety
Bond, as described herein, will not result in the Purchaser assuming any
obligations or liabilities of the Mortgage Loan Seller with respect
thereto, and that all such rights assigned to the Purchaser are fully and
freely assignable by the Mortgage Loan Seller to the Purchaser, subject to
the terms of the Surety Bond;
(iv) The forms of each Additional Collateral Agreement with respect
to the Additional Collateral have not been impaired, waived, altered or
modified in any material respect, and each Additional Collateral Agreement
is in full force and effect;
(v) Each Additional Collateral Agreement is not subject to any
right of rescission, setoff or defense with respect to the Additional
Collateral, including the defense of usury, nor will the operation of any
of the terms of such Additional Collateral Agreement, or the exercise of
any right thereunder, render such Additional Collateral Agreement
unenforceable, in whole or in part, or subject it to any right of
rescission, setoff or defense, including the defense of usury, and no such
right of rescission, setoff or defense has been asserted with respect
thereto with respect to the Additional Collateral; and
(vi) There is no default, breach, violation or event of
acceleration existing under any Additional Collateral Agreement with
respect to the Additional Collateral; there is no event that, with the
lapse of time, the giving of notice, or both, would constitute such a
default, breach, violation or event of acceleration; and in no event has
the Mortgage Loan Seller waived any of its material rights or remedies in
respect of any default, breach, violation or event of acceleration under
any Additional Collateral Agreement with respect to the Additional
Collateral.
(dd) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in the then current Standard & Poor's
LEVELS(R) Glossary, which is now Version 5.6b Revised (attached hereto as
Exhibit 7) and no Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the "Georgia Fair Lending Act."
(ee) Each Mortgage Loan was originated in accordance with the
underwriting guidelines of the related originator;
(ff) Each original Mortgage has been recorded or is in the process
of being recorded in accordance with the requirements of Section 2.01 of the
Sale and Servicing Agreement in the appropriate jurisdictions wherein such
recordation is required to perfect the lien thereof for the benefit of the Trust
Fund;
(gg) The related Mortgage File contains each of the documents and
instruments listed in Section 2.01 of the Sale and Servicing Agreement, subject
to any exceptions, substitutions and qualifications as are set forth in such
Section;
D-2-16
It is understood and agreed that the representations and warranties
set forth in this Section 7 will inure to the benefit of the Purchaser, its
successors and assigns, notwithstanding any restrictive or qualified endorsement
on any Mortgage Note or assignment of Mortgage or the examination of any
Mortgage File. Upon any substitution for a Mortgage Loan, the representations
and warranties set forth above shall be deemed to be made by the Mortgage Loan
Seller as to any Substitute Mortgage Loan as of the date of substitution.
Upon discovery or receipt of notice by the Mortgage Loan Seller, the
Purchaser, the Issuer or the Indenture Trustee of a breach of any representation
or warranty of the Mortgage Loan Seller set forth in this Section 7 which
materially and adversely affects the value of the interests of the Purchaser,
the Issuer, the Noteholders or the Indenture Trustee in any of the Mortgage
Loans delivered to the Purchaser pursuant to this Agreement, the party
discovering or receiving notice of such breach shall give prompt written notice
to the others. In the case of any such breach of a representation or warranty
set forth in this Section 7, within 90 days from the date of discovery by the
Mortgage Loan Seller, or the date the Mortgage Loan Seller is notified by the
party discovering or receiving notice of such breach (whichever occurs earlier),
the Mortgage Loan Seller will (i) cure such breach in all material respects,
(ii) purchase the affected Mortgage Loan at the applicable Purchase Price or
(iii) if within two years of the Closing Date, substitute a qualifying
Substitute Mortgage Loan in exchange for such Mortgage Loan. The obligations of
the Mortgage Loan Seller to cure, purchase or substitute a qualifying Substitute
Mortgage Loan shall constitute the Purchaser's, the Issuer's, the Indenture
Trustee's and the Noteholder's sole and exclusive remedy under this Agreement or
otherwise respecting a breach of representations or warranties hereunder with
respect to the Mortgage Loans, except for the obligation of the Mortgage Loan
Seller to indemnify the Purchaser for such breach as set forth in and limited by
Section 14 hereof. With respect to the representations and warranties described
in the Agreement which are made to the best of the Seller's knowledge, if it is
discovered by any of the Depositor, the Seller or the Indenture Trustee that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan, then
notwithstanding the seller's lack of knowledge with respect to the substance of
such representation and warranty, such inaccuracy shall be deemed a breach of
the applicable representation or warranty.
Any cause of action against the Mortgage Loan Seller or relating to
or arising out of a breach by the Mortgage Loan Seller of any representations
and warranties made in this Section 7 shall accrue as to any Mortgage Loan upon
(i) discovery of such breach by the Mortgage Loan Seller or notice thereof by
the party discovering such breach and (ii) failure by the Mortgage Loan Seller
to cure such breach, purchase such Mortgage Loan or substitute a qualifying
Substitute Mortgage Loan pursuant to the terms hereof.
SECTION 8. Representations and Warranties Concerning the Mortgage
Loan Seller. As of the date hereof and as of the Closing Date, the Mortgage Loan
Seller represents and warrants to the Purchaser as to itself in the capacity
indicated as follows:
(a) the Mortgage Loan Seller (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and (ii) is qualified and in good standing to do business in each jurisdiction
where such qualification is necessary, except where the failure so to qualify
would not reasonably be expected to have a material adverse
D-2-17
effect on the Mortgage Loan Seller's business as presently conducted or on the
Mortgage Loan Seller's ability to enter into this Agreement and to consummate
the transactions contemplated hereby;
(b) the Mortgage Loan Seller has full power to own its property,
to carry on its business as presently conducted and to enter into and perform
its obligations under this Agreement;
(c) the execution and delivery by the Mortgage Loan Seller of this
Agreement have been duly authorized by all necessary action on the part of the
Mortgage Loan Seller; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Mortgage Loan Seller or its
properties or the charter or by-laws of the Mortgage Loan Seller, except those
conflicts, breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Mortgage Loan Seller's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(d) the execution, delivery and performance by the Mortgage Loan
Seller of this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;
(e) this Agreement has been duly executed and delivered by the
Mortgage Loan Seller and, assuming due authorization, execution and delivery by
the Purchaser, constitutes a valid and binding obligation of the Mortgage Loan
Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to the
knowledge of the Mortgage Loan Seller, threatened against the Mortgage Loan
Seller, before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions contemplated by
this Agreement or (ii) with respect to any other matter which in the judgment of
the Mortgage Loan Seller will be determined adversely to the Mortgage Loan
Seller and will if determined adversely to the Mortgage Loan Seller materially
and adversely affect the Mortgage Loan Seller's ability to perform its
obligations under this Agreement; and the Mortgage Loan Seller is not in default
with respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement; and
(g) the Mortgage Loan Seller's Information (as defined in Section
13(a) hereof) does not include any untrue statement of a material fact or omit
to state a material fact
D-2-18
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
SECTION 9. Representations and Warranties Concerning the Purchaser.
As of the date hereof and as of the Closing Date, the Purchaser represents and
warrants to the Mortgage Loan Seller as follows:
(a) the Purchaser (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (ii)
is qualified and in good standing as a foreign corporation to do business in
each jurisdiction where such qualification is necessary, except where the
failure so to qualify would not reasonably be expected to have a material
adverse effect on the Purchaser's business as presently conducted or on the
Purchaser's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(b) the Purchaser has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(c) the execution and delivery by the Purchaser of this Agreement
have been duly authorized by all necessary corporate action on the part of the
Purchaser; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or constitute a
default under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Purchaser or its properties or the
articles of incorporation or by-laws of the Purchaser, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on the Purchaser's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(d) the execution, delivery and performance by the Purchaser of
this Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made;
(e) this Agreement has been duly executed and delivered by the
Purchaser and, assuming due authorization, execution and delivery by the
Mortgage Loan Seller, constitutes a valid and binding obligation of the
Purchaser enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to the
knowledge of the Purchaser, threatened against the Purchaser, before or by any
court, administrative agency, arbitrator or governmental body (i) with respect
to any of the transactions contemplated by this Agreement or (ii) with respect
to any other matter which in the judgment of the Purchaser will be determined
adversely to the Purchaser and will if determined adversely to the Purchaser
materially and adversely affect the Purchaser's ability to perform its
obligations under this Agreement; and the Purchaser is not in default with
respect to any order of any court,
D-2-19
administrative agency, arbitrator or governmental body so as to materially and
adversely affect the transactions contemplated by this Agreement; and
(g) the Purchaser's Information (as defined in Section 13(b)
hereof) does not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.
SECTION 10. Conditions to Closing.
(a) The obligations of the Purchaser under this Agreement will be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:
(1) Each of the obligations of the Mortgage Loan Seller
required to be performed at or prior to the Closing Date pursuant to
the terms of this Agreement shall have been duly performed and
complied with in all material respects; all of the representations
and warranties of the Mortgage Loan Seller under this Agreement
shall be true and correct as of the date or dates specified in all
material respects; and no event shall have occurred which, with
notice or the passage of time, would constitute a default under this
Agreement, or the Sale and Servicing Agreement; and the Purchaser
shall have received certificates to that effect signed by authorized
officers of the Mortgage Loan Seller.
(2) The Purchaser shall have received all of the following
closing documents, in such forms as are agreed upon and reasonably
acceptable to the Purchaser, duly executed by all signatories other
than the Purchaser as required pursuant to the respective terms
thereof:
(b) If required pursuant to Section 3 hereof, the Amendment dated
as of the Closing Date and any documents referred to therein;
(i) If required pursuant to Section 3 hereof, the Final Mortgage
Loan Schedule containing the information set forth on Exhibit 3 hereto,
one copy to be attached to each counterpart of the Amendment;
(ii) The Trust Agreement, in form and substance reasonably
satisfactory to the Purchaser, and all documents required thereby duly
executed by all signatories;
(iii) The Sale and Servicing Agreement, in form and substance
reasonably satisfactory to the Indenture Trustee, the Issuer and the
Purchaser, and all documents required thereby duly executed by all
signatories;
(iv) The Indenture, in form and substance reasonably satisfactory
to the Indenture Trustee, the Issuer and the Purchaser, and all documents
required thereby duly executed by all signatories;
(v) A certificate of an officer of the Mortgage Loan Seller dated
as of the Closing Date, in a form reasonably acceptable to the Purchaser,
and attached thereto the
D-2-20
resolutions of the Mortgage Loan Seller's authorizing the transactions
contemplated by this Agreement, together with copies of the charter and
by-laws of the Mortgage Loan Seller;
(vi) One or more opinions of counsel from the Mortgage Loan
Seller's counsel otherwise in form and substance reasonably satisfactory
to the Purchaser, the Issuer, the Indenture Trustee and each Rating
Agency;
(vii) A letter from each of the Rating Agencies giving each Class of
Notes set forth on Schedule A the rating set forth on Schedule A; and
(viii)Such other documents, certificates (including additional
representations and warranties) and opinions as may be reasonably
necessary to secure the intended ratings from each Rating Agency for the
Notes.
(1) The Notes to be sold to ▇▇▇▇▇▇▇ ▇▇▇▇▇ pursuant to the
Underwriting Agreement and the Purchase Agreement shall have been
issued and sold to ▇▇▇▇▇▇▇ ▇▇▇▇▇.
(2) The Mortgage Loan Seller shall have furnished to the
Purchaser such other certificates of its officers or others and such
other documents and opinions of counsel to evidence fulfillment of
the conditions set forth in this Agreement and the transactions
contemplated hereby as the Purchaser and its counsel may reasonably
request.
(c) The obligations of the Mortgage Loan Seller under this
Agreement shall be subject to the satisfaction, on or prior to the Closing Date,
of the following conditions:
(1) The obligations of the Purchaser required to be
performed by it on or prior to the Closing Date pursuant to the
terms of this Agreement shall have been duly performed and complied
with in all material respects, and all of the representations and
warranties of the Purchaser under this Agreement shall be true and
correct in all material respects as of the date hereof and as of the
Closing Date, and no event shall have occurred which would
constitute a breach by it of the terms of this Agreement, and the
Mortgage Loan Seller shall have received a certificate to that
effect signed by an authorized officer of the Purchaser.
(2) The Mortgage Loan Seller shall have received copies of
all of the following closing documents, in such forms as are agreed
upon and reasonably acceptable to the Mortgage Loan Seller, duly
executed by all signatories other than the Mortgage Loan Seller as
required pursuant to the respective terms thereof:
(ii) If required pursuant to Section 3 hereof, the Amendment dated
as of the Closing Date and any documents referred to therein;
D-2-21
(iii) The Trust Agreement, in form and substance reasonably
satisfactory to the Mortgage Loan Seller, and all documents required
thereby duly executed by all signatories;
(iv) The Sale and Servicing Agreement, in form and substance
reasonably satisfactory to the Mortgage Loan Seller, and all documents
required thereby duly executed by all signatories;
(v) The Indenture, in form and substance reasonably satisfactory
to the Mortgage Loan Seller, and all documents required thereby duly
executed by all signatories;
(vi) A certificate of an officer of the Purchaser dated as of the
Closing Date, in a form reasonably acceptable to the Mortgage Loan Seller,
and attached thereto the resolutions of the Purchaser authorizing the
transactions contemplated by this Agreement and the Sale and Servicing
Agreement, together with copies of the Purchaser's articles of
incorporation, and evidence as to the good standing of the Purchaser dated
as of a recent date;
(vii) One or more opinions of counsel from the Purchaser's counsel
in form and substance reasonably satisfactory to the Mortgage Loan Seller;
and
(viii) Such other documents, certificates (including additional
representations and warranties) and opinions as may be reasonably
necessary to secure the intended rating from each Rating Agency for the
Notes;
SECTION 11. Fees and Expenses. Subject to Section 17 hereof, the
Mortgage Loan Seller shall pay on the Closing Date or such later date as may be
agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan
Seller's attorneys and the reasonable fees and expenses of the Purchaser's
attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the filing
fee charged by the Commission for the registration of the Notes, (iv) the fees
and expenses including counsel's fees and expenses in connection with any "blue
sky" and legal investment matters, (v) the fees and expenses of the Indenture
Trustee which shall include without limitation the fees and expenses of the
Indenture Trustee (and the fees and disbursements of its counsel) with respect
to (A) legal and document review of this Agreement, the Trust Agreement, the
Indenture, the Sale and Servicing Agreement, the Notes and related agreements,
(B) attendance at the Closing and (C) review of the Mortgage Loans to be
performed by the Custodian, (vi) the expenses for printing or otherwise
reproducing the Notes, the Prospectus and the Prospectus Supplement, (vii) the
fees and expenses of each Rating Agency (both initial and ongoing), (viii) the
fees and expenses relating to the preparation and recordation of mortgage
assignments (including intervening assignments, if any and if available, to
evidence a complete chain of title from the originator to the Indenture Trustee)
from the Mortgage Loan Seller to the Indenture Trustee or the expenses relating
to the Opinion of Counsel referred to in Section 6(a) hereof, as the case may
be, and (ix) Mortgage File due diligence expenses and other out-of-pocket
expenses incurred by the Purchaser in connection with the purchase of the
Mortgage Loans and by ▇▇▇▇▇▇▇ ▇▇▇▇▇ in connection with the sale of the Notes.
The Mortgage Loan Seller
D-2-22
additionally agrees to pay directly to any third party on a timely basis the
fees provided for above which are charged by such third party and which are
billed periodically.
D-2-23
SECTION 12. Accountants' Letters.
(a) Deloitte & Touche LLP will review the characteristics of a
sample of the Mortgage Loans described in the Final Mortgage Loan Schedule and
will compare those characteristics to the description of the Mortgage Loans
contained in the Prospectus Supplement under the captions "Summary of Prospectus
Supplement--The Mortgage Loans" and "The Mortgage Pool--General" and "--Tabular
Characteristics of the Mortgage Pool". The Mortgage Loan Seller will cooperate
with the Purchaser in making available all information and taking all steps
reasonably necessary to permit such accountants to complete the review and to
deliver the letters required of them under the Underwriting Agreement. Deloitte
& Touche LLP will also confirm certain calculations as set forth under the
caption "Yield on the Offered Notes" in the Prospectus Supplement.
(b) To the extent statistical information with respect to theeach
Servicer's servicing portfolio is included in the Prospectus Supplement under
the caption "The Master Servicer and the Servicers," a letter from the certified
public accountant for such Servicer or Servicers will be delivered to the
Purchaser dated the date of the Prospectus Supplement, in the form previously
agreed to by the Mortgage Loan Seller and the Purchaser, with respect to such
statistical information.
SECTION 13. Indemnification.
(a) The Mortgage Loan Seller shall indemnify and hold harmless the
Purchaser and its directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage or
liability or action in respect thereof, to which they or any of them may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon (i) any untrue
statement of a material fact contained in the Mortgage Loan Seller's Information
as identified in Exhibit 4, the omission to state in the Prospectus Supplement
or Prospectus (or any amendment thereof or supplement thereto approved by the
Mortgage Loan Seller and in which additional Mortgage Loan Seller's Information
is identified), in reliance upon and in conformity with Mortgage Loan Seller's
Information a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made,
not misleading, (ii) any representation or warranty assigned or made by the
Mortgage Loan Seller in Section 7 or Section 8 hereof being, or alleged to be,
untrue or incorrect, or (iii) any failure by the Mortgage Loan Seller to perform
its obligations under this Agreement; and the Mortgage Loan Seller shall
reimburse the Purchaser and each other indemnified party for any legal and other
expenses reasonably incurred by them in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action.
(b) The Mortgage Loan Seller shall indemnify and hold harmless the
Purchaser, the Trust Fund and the Indenture Trustee against any documented
out-of-pocket losses, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion by any third party that results
from, a material breach of the representations and warranties set forth in
Section 7 of this Agreement; provided, however, indemnification shall not be
available for any economic losses of the Purchaser due to reinvestment losses,
loss of investment income
D-2-24
or any other special, indirect or consequential losses. The Mortgage Loan Seller
shall indemnify and hold harmless the Purchaser, the Trust Fund and the
Indenture Trustee against any losses, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion by any third
party in connection with the Georgia Fair Lending Act; provided, however,
indemnification shall not be available for any economic losses of the Purchaser
due to reinvestment losses, loss of investment income or any other special,
indirect or consequential losses.
The foregoing indemnity agreement is in addition to any liability which
the Mortgage Loan Seller otherwise may have to the Purchaser or any other such
indemnified party.
(c) The Purchaser shall indemnify and hold harmless the Mortgage
Loan Seller and its respective directors, officers and controlling persons (as
defined in Section 15 of the Securities Act) from and against any loss, claim,
damage or liability or action in respect thereof, to which they or any of them
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon (i) any
untrue statement of a material fact contained in the Purchaser's Information as
identified in Exhibit 5, the omission to state in the Prospectus Supplement or
Prospectus (or any amendment thereof or supplement thereto approved by the
Purchaser and in which additional Purchaser's Information is identified), in
reliance upon and in conformity with the Purchaser's Information, a material
fact required to be stated therein or necessary to make the statements therein
in light of the circumstances in which they were made, not misleading, (ii) any
representation or warranty made by the Purchaser in Section 9 hereof being, or
alleged to be, untrue or incorrect, or (iii) any failure by the Purchaser to
perform its obligations under this Agreement; and the Purchaser shall reimburse
the Mortgage Loan Seller, and each other indemnified party for any legal and
other expenses reasonably incurred by them in connection with investigating or
defending or preparing to defend any such loss, claim, damage, liability or
action. The foregoing indemnity agreement is in addition to any liability which
the Purchaser otherwise may have to the Mortgage Loan Seller, or any other such
indemnified party,
(d) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 13 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent it may elect by written notice delivered to the
indemnified party promptly (but, in any event, within 30 days) after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have
D-2-25
charge of the defense of such action within a reasonable time after notice of
commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there is a conflict of interest between itself or
themselves and the indemnifying party in the conduct of the defense of any claim
or that the interests of the indemnified party or parties are not substantially
co-extensive with those of the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties (provided,
however, that the indemnifying party shall be liable only for the fees and
expenses of one counsel in addition to one local counsel in the jurisdiction
involved. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement or any claim or action
effected without its written consent; provided, however, that such consent was
not unreasonably withheld.
(e) If the indemnification provided for in paragraphs (a) and (b)
of this Section 13 shall for any reason be unavailable to an indemnified party
in respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to in Section 13, then the indemnifying party shall in lieu of
indemnifying the indemnified party contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, in such proportion as shall be appropriate to reflect
the relative benefits received by the Mortgage Loan Seller on the one hand and
the Purchaser on the other from the purchase and sale of the Mortgage Loans, the
offering of the Notes and the other transactions contemplated hereunder. No
person found liable for a fraudulent misrepresentation shall be entitled to
contribution from any person who is not also found liable for such fraudulent
misrepresentation.
(f) The parties hereto agree that reliance by an indemnified party
on any publicly available information or any information or directions furnished
by an indemnifying party shall not constitute negligence, bad faith or willful
misconduct by such indemnified party.
SECTION 14. Notices. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (Telecopy: 212-449-6710), and notices to the Purchaser
shall be directed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (Telecopy: 212-449-6710), Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇; or to any other address as may hereafter be furnished by one party to
the other party by like notice. Any such demand, notice or communication
hereunder shall be deemed to have been received on the date received at the
premises of the addressee (as evidenced, in the case of registered or certified
mail, by the date noted on the return receipt) provided that it is received on a
business day during normal business hours and, if received after normal business
hours, then it shall be deemed to be received on the next business day.
SECTION 15. Transfer of Mortgage Loans. The Purchaser retains the
right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Issuer, with the understanding that the Issuer will then assign
such rights to the Indenture Trustee pursuant to the Indenture, without the
consent of the Mortgage Loan Seller, and, upon such assignment, the Indenture
Trustee, as the ultimate assignee, shall succeed to the applicable rights and
obligations
D-2-26
of the Purchaser hereunder; provided, however, the Purchaser shall remain
entitled to the benefits set forth in Sections 11, 13 and 17 hereto and as
provided in Section 2(a). Notwithstanding the foregoing, the sole and exclusive
right and remedy of the Issuer or the Indenture Trustee with respect to a breach
of representation or warranty of the Mortgage Loan Seller shall be the cure,
purchase or substitution obligations of the Mortgage Loan Seller contained in
Sections 5 and 7 hereof.
SECTION 16. Termination. This Agreement may be terminated (a) by the
mutual consent of the parties hereto prior to the Closing Date, (b) by the
Purchaser, if the conditions to the Purchaser's obligation to close set forth
under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the Mortgage
Loan Seller's obligation to close set forth under Section 10(b) hereof are not
fulfilled as and when required to be fulfilled. In the event of termination
pursuant to clause (b), the Mortgage Loan Seller shall pay, and in the event of
termination pursuant to clause (c), the Purchaser shall pay, all reasonable
out-of-pocket expenses incurred by the other in connection with the transactions
contemplated by this Agreement. In the event of a termination pursuant to clause
(a), each party shall be responsible for its own expenses.
SECTION 17. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Mortgage Loan Seller
submitted pursuant hereto, shall remain operative and in full force and effect
and shall survive delivery of the Mortgage Loans to the Purchaser, delivery by
the Purchaser to the Issuer and the pledge by the Issuer to the Indenture
Trustee on behalf of the Noteholders. Subsequent to the delivery of the Mortgage
Loans to the Purchaser, the Mortgage Loan Seller's representations and
warranties contained herein with respect to the Mortgage Loans shall be deemed
to relate to the Mortgage Loans actually delivered to the Purchaser and included
in the Final Mortgage Loan Schedule and any Substitute Mortgage Loan and not to
those Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule
pursuant to Section 3 hereof prior to the Closing.
SECTION 18. Mandatory Delivery; Grant of Security Interest. The sale
and delivery on the Closing Date of the Mortgage Loans described on the Mortgage
Loan Schedule in accordance with the terms and conditions of this Agreement is
mandatory. It is specifically understood and agreed that each Mortgage Loan is
unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser in the event of the Mortgage Loan Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Mortgage Loan
Seller hereby grants to the Purchaser a lien on and a continuing security
interest in the Mortgage Loan Seller's interest in each Mortgage Loan and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Mortgage Loan Seller of its obligation hereunder, and the
Mortgage Loan Seller agrees that it holds such Mortgage Loans in custody for the
Purchaser, subject to the Purchaser's obligation to deliver or cause to be
delivered the consideration for the Mortgage Loans pursuant to Section 2 hereof.
The Mortgage Loan Seller agrees that, upon acceptance of the Mortgage Loans by
the Purchaser or its designee and delivery of payment to the Mortgage Loan
Seller, that its security interest in the Mortgage Loans shall be released. All
rights and remedies of the Purchaser under this Agreement are distinct from, and
D-2-27
cumulative with, any other rights or remedies under this Agreement or afforded
by law or equity and all such rights and remedies may be exercised concurrently,
independently or successively.
Notwithstanding the foregoing, if on the Closing Date, each of the
conditions set forth in Section 10 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the purchase price as
described in Section 2 hereof, or any such condition shall not have been waived
or satisfied and the Purchaser determines not to pay or cause to be paid the
purchase price, the Purchaser shall immediately effect the redelivery of the
Mortgage Loans, if delivery to the Purchaser has occurred and the security
interest created by this Section 18 shall be deemed to have been released.
SECTION 19. Severability. Any part, provision, representation or
warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof.
SECTION 20. Counterparts. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.
SECTION 21. Amendment. This Agreement cannot be amended or modified
in any manner without the prior written consent of each party.
SECTION 22. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE
BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
SECTION 23. Further Assurances. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by either Rating Agency.
SECTION 24. Successors and Assigns.
This Agreement shall bind and inure to the benefit of and be enforceable
by the Mortgage Loan Seller and the Purchaser and their permitted successors and
assigns and, to the extent specified in Section 13 hereof, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and
their directors, officers and controlling persons (within the meaning of federal
securities laws). The Mortgage Loan Seller acknowledges and agrees that the
Purchaser may assign its rights under this Agreement (including, without
D-2-28
limitation, with respect to the Mortgage Loan Seller's representations and
warranties respecting the Mortgage Loans) to the Issuer and that the Issuer may
further assign such rights to the Indenture Trustee. Any person into which the
Mortgage Loan Seller may be merged or consolidated (or any person resulting from
any merger or consolidation involving the Mortgage Loan Seller), any person
resulting from a change in form of the Mortgage Loan Seller or any person
succeeding to the business of the Mortgage Loan Seller, shall be considered the
"successor" of the Mortgage Loan Seller hereunder and shall be considered a
party hereto without the execution or filing of any paper or any further act or
consent on the part of any party hereto. Except as provided in the two preceding
sentences and in Section 15 hereto, this Agreement cannot be assigned, pledged
or hypothecated by either party hereto without the written consent of the other
parties to this Agreement and any such assignment or purported assignment shall
be deemed null and void.
SECTION 25. The Mortgage Loan Seller and the Purchaser. The Mortgage
Loan Seller and the Purchaser will keep in full effect all rights as are
necessary to perform their respective obligations under this Agreement.
SECTION 26. Entire Agreement. This Agreement contains the entire
agreement and understanding between the parties with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.
SECTION 27. No Partnership. Nothing herein contained shall be deemed
or construed to create a partnership or joint venture between the parties
hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
D-2-29
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.
By:
---------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE
INVESTORS, INC.
By:
---------------------------------
Name:
Title:
EXHIBIT 1
CONTENTS OF MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each
of the following items, which shall be available for inspection by the Purchaser
or its designee, and which shall be delivered to the Purchaser or its designee
pursuant to the terms of the Agreement.
(i) The original Mortgage Note, including any riders thereto,
endorsed by the Mortgage Loan Seller or the originator, as applicable,
without recourse in proper form to the order of the Indenture Trustee, at
the direction of the Purchaser, with any intervening endorsements showing
an unbroken chain of title from the originator to the Indenture Trustee or
with respect to the Mortgage Loans as to which the Mortgage Note has been
lost, lost note affidavits and if available, a copy of the lost Mortgage
Note;
(ii) An original duly executed assignment of Mortgage in recordable
form from the originator to the Indenture Trustee;
(iii) The original recorded Mortgage, if available. If, in
connection with any Mortgage Loan, the Mortgage Loan Seller cannot deliver
the original Mortgage with evidence of recording thereon on or prior to
the Closing Date because of its delivery to, or a delay caused by, the
public recording office where such Mortgage has been delivered for
recordation, or if such original Mortgage Loan has been retained by the
public recording office as a matter of policy, or has been lost, the
Mortgage Loan Seller shall deliver or cause to be delivered to the
Indenture Trustee a photocopy thereof, if available (certified by the
Mortgage Loan Seller to be a true and correct copy of the original which
has been transmitted for recordation), together with an officer's
certificate of the Mortgage Loan Seller stating that such Mortgage has
been dispatched to the appropriate recording official for recordation, has
been retained by such recording office as a matter of policy or has been
lost, as applicable;
(iv) If applicable and available, all original intervening recorded
assignments, if any, showing an unbroken chain of title to the Mortgage
from the originator to the Mortgage Loan Seller or the Indenture Trustee;
(v) The originals of each assumption, modification or substitution
agreement, if any and if available, relating to the Mortgage Loan. If in
connection with any Mortgage Loan the Mortgage Loan Seller cannot deliver
the assumption, modification or substitution agreement with evidence of
recording thereon on or prior to the Closing Date because of a delay
caused by the public recording office where such assumption, modification
or substitution agreement has been delivered for recordation, the Mortgage
Loan Seller shall deliver or cause to be delivered to the Indenture
Trustee a photocopy of such assumption, modification or substitution
agreement (certified by the Mortgage Loan Seller to be a true and correct
copy of the original which has been transmitted for recordation), together
with a certificate of an officer of the Mortgage Loan Seller stating
E-1-1
that such assumption, modification or substitution agreement has been
dispatched to the appropriate recording official for recordation, if
available;
(vi) the original mortgagee's title insurance policy or a written
commitment to issue such title insurance policy;
(vii) originals of all modification agreements, if applicable and
available;
(viii)with respect to each Additional Collateral Mortgage Loan,
(i) copy of the related Mortgage 100 Pledge Agreement
for Securities Account or the Parent Power Guaranty and Security Agreement for
Securities Account or the Parent Power Guaranty Agreement for Real Estate, as
the case may be;
(ii) copy of the UCC-1 (applicable for South Carolina
and Rhode Island only);
(iii) an original form UCC-3, if applicable;
(iv) for loans originated by a correspondent lender, an
original assignment of security interest of the related Mortgage 100 Pledge
Agreement or Parent Power Agreement, as the case may be;
(ix) with respect to each Cooperative Loan:
(i) the original proprietary lease;
(ii) the original recognition agreement;
(iii) the original security agreement;
(iv) the original or copy of the assignment of
proprietary lease;
(v) the original cooperative stock certificate and
stock power executed by borrower in blank;
(vi) the original UCC-1 Financing Statements;
(vii) the original UCC-3 Financing Statements; and
(x) Power of Attorney, if applicable.
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EXHIBIT 2
CONTENTS OF FINAL MORTGAGE FILE
(A) With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser or its agent, and which shall be delivered to the Purchaser pursuant
to the terms of the Agreement.
The original Mortgage Note, including any riders thereto, endorsed
by the Mortgage Loan Seller or the originator, as applicable, without
recourse in proper form to the order of the Indenture Trustee, at the
direction of the Purchaser, with any intervening endorsements showing an
unbroken chain of title from the originator to the Indenture Trustee, or
with respect to the Mortgage Loans as to which the Mortgage Note has been
lost, lost note affidavits and if available, a copy of the lost Mortgage
Note;
An original duly executed assignment of Mortgage in recordable form
from the Mortgage Loan Seller or the originator, as applicable, to the
Indenture Trustee, with evidence of recording indicated thereon; provided
that if such document is not included because of a delay by the public
recording office where such document has been delivered for recordation,
the Mortgage Loan Seller shall include or cause to be included a copy
thereof certified by the appropriate recording office;
The original recorded Mortgage, if available, with evidence of
recording indicated thereon; provided that if such document is not
included because of a delay by the public recording office where such
document has been delivered for recordation or such office as a matter of
policy does not return the original of such document or if such original
Mortgage has been lost, the Mortgage Loan Seller shall include or cause to
be included a copy thereof certified by the appropriate recording office,
if available;
The original intervening assignments, including warehousing
assignments, if any and if available, with evidence of recording thereon,
showing an unbroken chain of title to the Mortgage from the Mortgage Loan
Seller or the originator, as the case may be, to the Mortgage Loan Seller
or the Indenture Trustee; provided that if such document is not included
because of a delay by the public recording office where such document has
been delivered for recordation or such office as a matter of policy does
not return the original of such document, the Mortgage Loan Seller shall
include or cause to be included a copy thereof certified by the
appropriate recording office, if available;
The originals of each assumption, modification or substitution
agreement, if any and if available, relating to the Mortgage Loan; and
the original mortgagee's title insurance policy or, if a master
title policy has been issued by the title insurer, a mortgagee's
certificate of title insurance or a written commitment to issue such title
insurance policy.
E-2-1
EXHIBIT 3
MORTGAGE LOAN SCHEDULE INFORMATION
The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:
(i) the loan number of the mortgage loan;
(ii) the city, state and zip code of the Mortgage Property;
(iii) a code indicating whether the Mortgaged Property
is owner-occupied;
(iv) the type of Residential Dwelling constituting the
Mortgaged Property;
(v) the original months to maturity;
(vi) the original date of the mortgage;
(vii) the Loan-to-Value Ratio at origination;
(viii) the Mortgage Interest Rate at Origination;
(ix) the date on which the first Monthly Payment was due on
the Mortgage Loan;
(x) the stated maturity date;
(xi) the amount of the Monthly Payment at origination;
(xii) the amount of the Monthly Payment as of the Cut-off Date;
(xiii) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Stated Principal Balance;
(xiv) the original principal amount of the Mortgage Loan;
(xv) the Stated Principal Balance of the Mortgage Loan as of
the close of business on the Cut-off Date;
(xvi) a code indicating the purpose of the Mortgage Loan
(i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);
(xvii) a code indicating the documentation style (i.e.,
full, alternative or reduced);
(xviii) [reserved];
(xix) the Value of the Mortgaged Property;
E-3-1
(xx) the sale price of the Mortgaged Property, if applicable;
(xxi) the actual unpaid principal balance of the Mortgage Loan as
of the Cut-off Date;
(xxii) the Servicing Fee;
(xxiii) [reserved];
(xxiv) with respect to each adjustable-rate Mortgage Loan, the
next Interest Rate Adjustment Date;
(xxv) with respect to each adjustable-rate Mortgage Loan, the
Gross Margin;
(xxvi) with respect to each adjustable-rate Mortgage Loan,
the Minimum and Maximum Mortgage Rate under the terms of the Mortgage
Note;
(xxvii) with respect to each adjustable-rate Mortgage Loan,
the First Rate Cap;
(xxviii) with respect to each adjustable-rate Mortgage Loan, the
related Periodic Rate Cap;
(xxix) with respect to each adjustable-rate Mortgage Loan,
the related Lifetime Cap;
(xxx) with respect to each adjustable-rate Mortgage Loan,
whether additional collateral exists;
(xxxi) with respect to each adjustable-rate Mortgage Loan, whether
it is interest-only; and
(xxxii) with respect to each adjustable-rate Mortgage Loan,
the Seller.
Such schedule shall set forth the following information with respect
to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number of
Mortgage Loans; (2) the current principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
E-3-2
EXHIBIT 4
MORTGAGE LOAN SELLER'S INFORMATION
All information in the Prospectus Supplement described under the
following Sections: "SUMMARY OF PROSPECTUS SUPPLEMENT -- The Mortgage Loans,"
"DESCRIPTION OF THE MORTGAGE POOLS".
E-4-1
EXHIBIT 5
PURCHASER'S INFORMATION
All information in the Prospectus Supplement and the Prospectus,
except the Mortgage Loan Seller's Information.
E-5-1
EXHIBIT 6
SCHEDULE OF LOST NOTES
Available Upon Request
E-6-1
EXHIBIT 7
REVISED August 1, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇ - STANDARD & POOR'S PREDATORY LENDING CATEGORIES
Standard & Poor's has categorized loans governed by anti-predatory lending
laws in the Jurisdictions listed below into three categories based upon a
combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan Category because they included
thresholds and tests that are typical of what is generally considered High Cost
by the industry.
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
Category under
Name of Anti-Predatory Lending Applicable Anti-
State/Jurisdiction Law/Effective Date Predatory Lending Law
--------------------------------------------------------------------------------------------------------
Arkansas Arkansas Home Loan Protection Act, Ark. High Cost Home Loan
Code ▇▇▇. Sections ▇▇-▇▇-▇▇▇ et seq.
Effective July 16, 2003
--------------------------------------------------------------------------------------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Code Covered Loan
Sections 757.01 et seq.
Effective June 2, 2003
--------------------------------------------------------------------------------------------------------
Colorado Consumer Equity Protection, Colo. Stat. Covered Loan
▇▇▇. Sections 5-3.5-101 et seq.
Effective for covered loans offered or
entered into on or after January 1, 2003.
Other provisions of the Act took effect on
June 7, 2002
--------------------------------------------------------------------------------------------------------
Connecticut Connecticut Abusive Home Loan Lending High Cost Home Loan
Practices Act, Conn. Gen. Stat.
Sections 36a-746 et seq.
Effective October 1, 2001
--------------------------------------------------------------------------------------------------------
District of Columbia Home Loan Protection Act, D.C. Code Covered Loan
Sections 26-1151.01 et seq.
Effective for loans closed on or after
January 28, 2003
--------------------------------------------------------------------------------------------------------
Florida Fair Lending Act, Fla. Stat. ▇▇▇. High Cost Home Loan
Sections 494.0078 et seq.
Effective October 2, 2002
--------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - Mar. ▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇. Code ▇▇▇. High Cost Home Loan
2003) Sections 7-6A-1 et seq.
--------------------------------------------------------------------------------------------------------
E-7-1
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
Category under
Name of Anti-Predatory Lending Applicable Anti-
State/Jurisdiction Law/Effective Date Predatory Lending Law
--------------------------------------------------------------------------------------------------------
Effective October 1, 2002 - March 6,
2003
--------------------------------------------------------------------------------------------------------
Georgia as amended (Mar. 7, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇. Code ▇▇▇. High Cost Home Loan
- current) Sections 7-6A-1 et seq.
Effective for loans closed on or after
March 7, 2003
--------------------------------------------------------------------------------------------------------
HOEPA Section 32 Home Ownership and Equity Protection High Cost Loan
Act of 1994, 15 U.S.C. Section 1639, 12
C.F.R. Sections 226.32 and 226.34
Effective October 1, 1995, amendments
October 1, 2002
--------------------------------------------------------------------------------------------------------
Illinois High Risk Home Loan Act, Ill. Comp. High Risk Home Loan
Stat. tit. 815, Sections 137/5 et seq.
Effective January 1, 2004 (prior to this
date, regulations under Residential
Mortgage License Act effective from May
14, 2001)
--------------------------------------------------------------------------------------------------------
Kansas Consumer Credit Code, Kan. Stat. High Loan to Value
▇▇▇. Sections 16a-1-101 et seq. Consumer Loan (id.
Section 16a-3-207) and;
Sections 16a-1-301 and 16a-3-207 ------------------------
became effective April 14, 1999; Section High APR Consumer Loan
16a-3-308a became effective July 1, 1999 (id. Section 16a-3-308a)
--------------------------------------------------------------------------------------------------------
Kentucky 2003 KY H.B. 287 - High Cost Home Loan High Cost Home Loan
Act, Ky. Rev. Stat. Sections 360.100 et
seq.
Effective June 24, 2003
--------------------------------------------------------------------------------------------------------
Maine Truth in Lending, Me. Rev. Stat. tit. High Rate High Fee
9-A, Sections 8-101 et seq. Mortgage
Effective September 29, 1995 and as
amended from time to time
--------------------------------------------------------------------------------------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. High Cost Home Loan
Sections 32.00 et seq. and 209 C.M.R.
Sections 40.01 et seq.
--------------------------------------------------------------------------------------------------------
E-7-2
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
Category under
Name of Anti-Predatory Lending Applicable Anti-
State/Jurisdiction Law/Effective Date Predatory Lending Law
--------------------------------------------------------------------------------------------------------
Effective March 22, 2001 and amended
from time to time
--------------------------------------------------------------------------------------------------------
Nevada Assembly ▇▇▇▇ No. 284, Nev. Rev. Stat. Home Loan
Sections 598D.010 et seq.
Effective October 1, 2003
--------------------------------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Security Act High Cost Home Loan
of 2002, N.J. Rev. Stat. Sections
46:10B-22 et seq.
Effective for loans closed on or after
November 27, 2003
--------------------------------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. High Cost Home Loan
Stat. Sections 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
--------------------------------------------------------------------------------------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made on or
after April 1, 2003
--------------------------------------------------------------------------------------------------------
North Carolina Restrictions and Limitations on High High Cost Home Loan
Cost Home Loans, N.C. Gen. Stat.
Sections 24-1.1E et seq.
Effective July 1, 2000; amended October
1, 2003 (adding open-end lines of credit)
--------------------------------------------------------------------------------------------------------
Ohio H.B. 386 (codified in various sections Covered Loan
of the Ohio Code), Ohio Rev. Code ▇▇▇.
Sections 1349.25 et seq.
Effective May 24, 2002
--------------------------------------------------------------------------------------------------------
Oklahoma Consumer Credit Code (codified in Subsection 10 Mortgage
various sections of Title 14A)
Effective July 1, 2000; amended
effective January 1, 2004
--------------------------------------------------------------------------------------------------------
South Carolina South Carolina High Cost and Consumer High Cost Home Loan
Home Loans Act, S.C. Code
--------------------------------------------------------------------------------------------------------
E-7-3
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
Category under
Name of Anti-Predatory Lending Applicable Anti-
State/Jurisdiction Law/Effective Date Predatory Lending Law
--------------------------------------------------------------------------------------------------------
▇▇▇. Sections 37-23-10 et seq.
Effective for loans taken on or after
January 1, 2004
--------------------------------------------------------------------------------------------------------
West Virginia West Virginia Residential Mortgage West Virginia
Lender, Broker and Servicer Act, W. Va. Mortgage Loan Act
Code ▇▇▇. Sections 31-17-1 et seq. Loan
Effective June 5, 2002
--------------------------------------------------------------------------------------------------------
STANDARD & POOR'S COVERED LOAN CATEGORIZATION
Category under
Name of Anti-Predatory Lending Applicable Anti-
State/Jurisdiction Law/Effective Date Predatory Lending Law
--------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - Mar. ▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇. Code ▇▇▇. Covered Loan
2003) Sections 7-6A-1 et seq.
Effective October 1, 2002 - March 6, 2003
--------------------------------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Security Act Covered Home Loan
of 2002, N.J. Rev. Stat. Sections
46:10B-22 et seq.
Effective November 27, 2003 - July 5, 2004
--------------------------------------------------------------------------------------------------------
STANDARD & POOR'S HOME LOAN CATEGORIZATION
Category under
Name of Anti-Predatory Lending Applicable Anti-
State/Jurisdiction Law/Effective Date Predatory Lending Law
--------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - Mar. ▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇. Code ▇▇▇. Home Loan
2003) Sections 7-6A-1 et seq.
Effective October 1, 2002 - March 6, 2003
--------------------------------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Security Home Loan
--------------------------------------------------------------------------------------------------------
E-7-4
STANDARD & POOR'S HOME LOAN CATEGORIZATION
Category under
Name of Anti-Predatory Lending Applicable Anti-
State/Jurisdiction Law/Effective Date Predatory Lending Law
--------------------------------------------------------------------------------------------------------
Act of 2002, N.J. Rev. Stat. Sections
46:10B-22 et seq.
Effective for loans closed on or after
November 27, 2003
--------------------------------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Home Loan
Stat. Sections 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
--------------------------------------------------------------------------------------------------------
North Carolina Restrictions and Limitations on High Consumer Home Loan
Cost Home Loans, N.C. Gen. Stat.
Sections 24-1.1E et seq.
Effective July 1, 2000; amended October
1, 2003 (adding open-end lines of credit)
--------------------------------------------------------------------------------------------------------
South Carolina South Carolina High Cost and Consumer Consumer Home Loan
Home Loans Act, S.C. Code ▇▇▇. Sections
37-23-10 et seq.
Effective for loans taken on or after
January 1, 2004
--------------------------------------------------------------------------------------------------------
E-7-5
SCHEDULE A
REQUIRED RATINGS FOR EACH CLASS OF NOTES
Public Notes
Class S&P ▇▇▇▇▇'▇
------------------------------------- ----------------- -------------------
Class 1-A............................ AAA Aaa
Class 2-A............................ AAA Aaa
Class 3-A............................ AAA Aaa
None of the above ratings has been lowered since the respective dates of such
letters.
Private Notes
Class S&P ▇▇▇▇▇'▇
------------------------------------- ----------------- -------------------
Class X.............................. AA --
Class M-1............................ AA --
Class M-2............................ A --
Class M-3............................ BBB --
Class B-1............................ BB --
Class B-2............................ B --
Class B-3............................ -- --
None of the above ratings has been lowered since the respective dates of such
letters.
A-1
SCHEDULE B
MORTGAGE LOAN SCHEDULE
[Provided upon request]