EXHIBIT 99.1
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
as Depositor
U.S. BANK NATIONAL ASSOCIATION,
as Grantor Trustee
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer and Securities Administrator
and
EMC MORTGAGE CORPORATION,
as Seller
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SERVICING AGREEMENT
Dated as of February 28, 2005
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Structured Asset Mortgage Investments II. Inc.
Bear ▇▇▇▇▇▇▇ ARM Trust 2005-2,
Mortgage-Backed Notes, Series 2005-2
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions.......................................................................................................2
Section 1.01 Definitions.....................................................................................2
Section 1.02 Other Definitional Provisions...................................................................2
Section 1.03 Representations and Warranties Regarding the Master Servicer....................................3
ARTICLE II
Administration and Servicing of Mortgage Loans....................................................................4
Section 2.01 Master Servicer.................................................................................4
Section 2.02 Monitoring of Servicer..........................................................................5
Section 2.03 Fidelity Bond...................................................................................6
Section 2.04 Power to Act; Procedures........................................................................7
Section 2.05 Due-on-Sale Clauses; Assumption Agreements......................................................7
Section 2.06 Release of Mortgage Files.......................................................................7
Section 2.07 Documents, Records and Funds in Possession of Master Servicer To Be Held for the Grantor
Trustee.........................................................................................8
Section 2.08 Standard Hazard Insurance and Flood Insurance Policies..........................................9
Section 2.09 Presentment of Claims and Collection of Proceeds................................................9
Section 2.10 Maintenance of the Primary Mortgage Insurance Policies.........................................10
Section 2.11 Grantor Trustee to Retain Possession of Certain Insurance Policies and Documents...............10
Section 2.12 Realization Upon Defaulted Mortgage Loans......................................................11
Section 2.13 Compensation for the Master Servicer...........................................................11
Section 2.14 REO Property...................................................................................11
Section 2.15 Annual Officer's Certificate as to Compliance..................................................12
Section 2.16 Annual Independent Accountant's Servicing Report...............................................12
Section 2.17 Reserved.......................................................................................13
Section 2.18 UCC............................................................................................13
Section 2.19 Foreclosure Proceedings, and Optional Purchase of Delinquent and Defaulted Mortgage Loans......13
Section 2.20 Monthly Advances...............................................................................13
Section 2.21 Compensating Interest Payments.................................................................14
ARTICLE III
Accounts.........................................................................................................15
Section 3.01 Protected Accounts.............................................................................15
Section 3.02 Master Servicer Collection Account.............................................................16
Section 3.03 Permitted Withdrawals and Transfers from the Master Servicer Collection Account................18
ARTICLE IV
The Master Servicer..............................................................................................19
Section 4.01 Liabilities of the Master Servicer.............................................................19
Section 4.02 Merger or Consolidation of the Master Servicer.................................................19
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TABLE OF CONTENTS
PAGE
Section 4.03 Indemnification of the Grantor Trustee, Owner Trustee, the Master Servicer and
the Securities Administrator...................................................................19
Section 4.04 Limitations on Liability of the Master Servicer and Others.....................................20
Section 4.05 Master Servicer Not to Resign..................................................................21
Section 4.06 Successor Master Servicer......................................................................21
Section 4.07 Sale and Assignment of Master Servicing........................................................21
ARTICLE V
Default..........................................................................................................23
Section 5.01 Master Servicer Events of Default..............................................................23
Section 5.02 Grantor Trustee to Act; Appointment of Successor...............................................25
Section 5.03 Notification to Grantor Trust Certificateholders...............................................26
Section 5.04 Waiver of Defaults.............................................................................26
ARTICLE VI
Miscellaneous Provisions.........................................................................................27
Section 6.01 Amendment......................................................................................27
Section 6.02 Recordation of Agreement.......................................................................28
Section 6.03 Governing Law..................................................................................28
Section 6.04 Notices........................................................................................28
Section 6.05 Severability of Provisions.....................................................................29
Section 6.06 Successors and Assigns.........................................................................29
Section 6.07 Article and Section Headings...................................................................29
Section 6.08 Counterparts...................................................................................29
Section 6.09 Notice to Rating Agencies......................................................................29
Section 6.10 Termination....................................................................................30
Section 6.11 No Petition....................................................................................30
Section 6.12 No Recourse....................................................................................30
Section 6.13 Additional Terms Regarding Indenture...........................................................30
EXHIBITS
Exhibit A.........- Mortgage Loan Schedule
Exhibit B.........- ▇▇▇▇▇ Fargo Servicing Agreement
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SERVICING AGREEMENT
Servicing Agreement, dated as of February 28, 2005 (the "Agreement"),
among Structured Asset Mortgage Investments II Inc. a Delaware corporation, as
depositor (the "Depositor"), U.S. Bank National Association, a national banking
association, not in its individual capacity but solely as grantor trustee (the
"Grantor Trustee"), ▇▇▇▇▇ Fargo Bank, National Association ("▇▇▇▇▇ Fargo"), as
master servicer (in that capacity, the "Master Servicer") and as securities
administrator (in that capacity, the "Securities Administrator") and EMC
Mortgage Corporation, as seller (the "Seller").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor acquired the Mortgage
Loans from EMC pursuant to the Mortgage Loan Purchase Agreement. The Depositor
will establish Bear ▇▇▇▇▇▇▇ ARM Grantor Trust 2005-2, a New York trust (the
"Grantor Trust") pursuant to a Grantor Trust Agreement, dated as of February 1,
2005. The Depositor will deposit the Mortgage Loans into the Grantor Trust in
exchange for the Class A Grantor Trust Certificates, which will evidence the
entire beneficial ownership interest in the Mortgage Loans (such certificate
being referred to herein as the "Grantor Trust Certificate"). Prior to the
Closing Date, pursuant to a Trust Agreement, as amended and restated on the
Closing Date, the Depositor created Bear ▇▇▇▇▇▇▇ ARM Trust 2005-2, a Delaware
statutory trust, for the purpose of issuing the Owner Trust Certificates (the
"Owner Trust Certificates") in exchange for the Grantor Trust Certificate
pursuant to the Trust Agreement, and the Notes, pursuant to the Indenture.
Pursuant to the Indenture, the Issuer will pledge all of its right, title and
interest in and to the Grantor Trust Certificate and other property acquired
from the Depositor to the Indenture Trustee to secure the Notes issued pursuant
to the Indenture. The Depositor will receive from the Issuer the Owner Trust
Certificates evidencing the entire beneficial ownership interest in the Issuer
and the Notes representing indebtedness of the Issuer.
In consideration of the mutual agreements herein contained, each of the
Depositor, the Master Servicer and the Grantor Trustee undertakes and agrees to
perform its 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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Section 1.03 REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER
SERVICER. The Master Servicer represents and warrants to the Grantor Trustee,
for the benefit of the Grantor Trust Certificateholders, to the Indenture
Trustee, for the benefit of the Noteholders, to the Issuer, as pledgee of the
Grantor Trust Certificate, and to the Owner Trustee, on behalf of the Holder of
the Owner Trust Certificate, as of the Cut-off Date, 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;
(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 Grantor Trust Certificate 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.
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ARTICLE II
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 2.01 MASTER SERVICER. The Master Servicer shall supervise,
monitor and oversee the obligations of the Servicer to service and administer
the Mortgage Loans in accordance with the terms of the ▇▇▇▇▇ Fargo Servicing
Agreement and shall have full power and authority to do any and all things which
it may deem necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the Master Servicer
shall act in a manner consistent with Accepted Master Servicing Practices.
Furthermore, the Master Servicer shall oversee and consult with the Servicer as
necessary from time-to-time to carry out the Master Servicer's obligations
hereunder, shall receive, review and evaluate all reports, information and other
data provided to the Master Servicer by the Servicer and shall cause the
Servicer to perform and observe the covenants, obligations and conditions to be
performed or observed by such Servicer under the ▇▇▇▇▇ Fargo Servicing
Agreement. The Master Servicer shall independently and separately monitor the
Servicer's servicing activities with respect to the Mortgage Loans, reconcile
the results of such monitoring with such information provided in the previous
sentence on a monthly basis and coordinate corrective adjustments to the
Servicer's and Master Servicer's records, and based on such reconciled and
corrected information, the Master Servicer shall provide such information to the
Securities Administrator as shall be necessary in order for it to prepare the
statements specified in the Grantor Trust Agreement and the Indenture, and
prepare any other information and statements required to be forwarded by the
Master Servicer hereunder. The Master Servicer shall reconcile the results of
its Mortgage Loan monitoring with the actual remittances of the Servicer
pursuant to the ▇▇▇▇▇ Fargo Servicing Agreement. Notwithstanding anything in
this Agreement or the ▇▇▇▇▇ Fargo Servicing Agreement to the contrary, the
Master Servicer shall have no duty or obligation to supervise, monitor or
oversee the activities of the Servicer or enforce the obligations of the
Servicer under the ▇▇▇▇▇ Fargo Servicing Agreement with respect to any Pledged
Assets securing any Pledged Asset Loan, including, without limitation, the
collection of any amounts owing to the Grantor Trust in respect therof.
The Grantor Trustee shall furnish the Servicer and the Master Servicer
with any powers of attorney and other documents in form as provided to it
necessary or appropriate to enable the Servicer and the Master Servicer to
service and administer the related Mortgage Loans and REO Property. The Grantor
Trustee shall not be liable for the Servicer's or the Master Servicer's use or
misuse of such powers of attorney.
The Grantor Trustee shall provide access to the records and
documentation in possession of the Grantor 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 Grantor Trustee. The Grantor 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 Grantor Trustee's actual costs.
The Grantor Trustee shall execute and deliver to the Servicer or the
Master Servicer, as applicable based on the requesting party, any court
pleadings, requests for trustee's sale or other
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documents necessary or reasonably desirable to (i) the foreclosure or trustee's
sale with respect to a Mortgaged Property; (ii) any legal action brought to
obtain judgment against any Mortgagor on the Mortgage Note or Security
Instrument; (iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any other rights or remedies provided by the Mortgage Note or Security
Instrument or otherwise available at law or equity.
Section 2.02 MONITORING OF SERVICER. (a) The Master Servicer shall be
responsible for reporting to the Grantor Trustee and the Depositor the
compliance by the Servicer with its duties under the ▇▇▇▇▇ Fargo Servicing
Agreement. In the review of the Servicer's activities, the Master Servicer may
rely upon an officer's certificate of the Servicer (or similar document signed
by an officer of the Servicer) with regard to such Servicer's compliance with
the terms of the ▇▇▇▇▇ Fargo Servicing Agreement. In the event that the Master
Servicer, in its judgment, determines that the Servicer 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 Grantor
Trustee thereof in writing. Pursuant to its receipt of such written notification
from the Master Servicer, the Grantor Trustee shall issue such notice of
termination to the Servicer or take such other action as it deems appropriate.
(b) In the event that the Servicer fails to perform its obligations in
accordance with the ▇▇▇▇▇ Fargo Servicing Agreement, subject to the preceding
paragraph, the Grantor Trustee shall terminate the rights and obligations of the
Servicer and enter into a new Servicing Agreement with a successor Servicer
selected by the Grantor Trustee; provided, however, it is understood and
acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of the ▇▇▇▇▇ Fargo
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 Grantor
Trustee, in its good faith business judgment, would require were it the owner of
the related Mortgage Loans. The Grantor Trustee shall pay the costs of such
enforcement at its own expense, provided that the Grantor Trustee shall not be
required to prosecute or defend any legal action except to the extent that the
Grantor 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 Grantor Trustee to assume or succeed to the duties or
obligations of the Servicer or the Master Servicer.
(c) To the extent that the costs and expenses of the Grantor Trustee
related to any termination of the Servicer, appointment of a successor servicer
or the transfer and assumption of servicing by a successor Servicer with respect
to the ▇▇▇▇▇ Fargo Servicing Agreement (including, without limitation, (i) all
legal costs and expenses and all due diligence costs and expenses associated
with an evaluation of the potential termination of the Servicer as a result of
an event of default by the Servicer and (ii) all costs and expenses associated
with the complete transfer of servicing, including all servicing files and all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
service to service the Mortgage Loans in accordance with the ▇▇▇▇▇ Fargo
Servicing Agreement) are not fully and timely reimbursed by the terminated
Servicer, the Grantor Trustee shall be
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entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account.
(d) The Master Servicer shall require the Servicer to comply with the
remittance requirements and other obligations set forth in the ▇▇▇▇▇ Fargo
Servicing Agreement.
(e) If the Grantor Trustee acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces.
Section 2.03 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.
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Section 2.04 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 Grantor
Trust Certificateholders and the Grantor 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 ▇▇▇▇▇ Fargo Servicing Agreement, as
applicable. The Grantor Trustee shall furnish the Servicer or the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer or the Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with the ▇▇▇▇▇ Fargo Servicing
Agreement and this Agreement, and the Grantor 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 Grantor Trustee shall have no liability for use or misuse of
any such powers of attorney by the Master Servicer or the Servicer). If the
Master Servicer or the Grantor 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 Grantor Trustee or that the Grantor 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 Grantor
Trustee in the appointment of a co-trustee pursuant to the Grantor Trust
Agreement. 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 Grantor Trustee, be deemed to
be the agent of the Issuer or the Grantor Trustee.
Section 2.05 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the extent
provided in the ▇▇▇▇▇ Fargo Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicer to enforce such clauses in accordance with the ▇▇▇▇▇ Fargo Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the ▇▇▇▇▇ Fargo
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the ▇▇▇▇▇
Fargo Servicing Agreement.
Section 2.06 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Grantor Trust Certificateholders on the next
Payment Date, the Servicer will, if required under the ▇▇▇▇▇ Fargo Servicing
Agreement, promptly furnish to the Grantor Trustee two copies of a certification
substantially in the form of Exhibit Four to the Custodial Agreement 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
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all amounts received in connection with such payment that are required to be
deposited in the Protected Account maintained by the Servicer pursuant to the
▇▇▇▇▇ Fargo Servicing Agreement have been so deposited) and shall request that
the Grantor Trustee deliver or cause the Custodian to deliver to the Servicer
the related Mortgage File. Upon receipt of such certification and request, the
Grantor Trustee shall promptly release or cause the Custodian to release the
related Mortgage File to the Servicer and the Grantor Trustee shall have no
further responsibility with regard to such Mortgage File. Upon any such payment
in full, the Servicer is authorized, to give, as agent for the Grantor 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 ▇▇▇▇▇ Fargo
Servicing Agreement, the Grantor Trustee shall execute such documents as shall
be prepared and furnished to the Grantor Trustee by the Servicer or the Master
Servicer (in form reasonably acceptable to the Grantor Trustee) and as are
necessary to the prosecution of any such proceedings. The Grantor Trustee shall,
upon the request of the Servicer or the Master Servicer, and delivery to the
Grantor Trustee, of two copies of a request for release signed by a Servicing
Officer substantially in the form of Exhibit Four to the Custodial Agreement (or
in a mutually agreeable electronic format which will, in lieu of a signature on
its face, originate from a Servicing Officer), release or cause the Custodian to
release the related Mortgage File held in its or the Custodian's possession or
control to the Servicer or the Master Servicer, as applicable. The Servicer or
the Master Servicer shall be obligated to return the Mortgage File to the
Grantor Trustee or the Custodian when the need therefor by the Servicer or the
Master Servicer, as it reasonably determines, no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of a Servicing Officer similar to that hereinabove specified, the Mortgage File
shall be released by the Grantor Trustee or the Custodian to the Servicer or the
Master Servicer.
Section 2.07 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER TO BE HELD FOR THE GRANTOR Trustee. (a) The Master Servicer shall
transmit and the Servicer (to the extent required by the ▇▇▇▇▇ Fargo Servicing
Agreement) shall transmit to the Grantor Trustee such documents and instruments
coming into the possession of the Master Servicer or the Servicer from time to
time as are required by the terms hereof, or in the case of the Servicer, the
▇▇▇▇▇ Fargo Servicing Agreement, to be delivered to the Grantor Trustee. Any
funds received by the Master Servicer or by the Servicer in respect of any
Mortgage Loan or which otherwise are collected by the Master Servicer or by the
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be held for the benefit of the Depositor and the Grantor
Trustee subject to the Master Servicer's right to retain or withdraw from the
Master Servicer Collection Account the Master Servicer Compensation and other
amounts provided in this Agreement and the right of the Servicer to retain its
Servicing Fee and other amounts as provided in the ▇▇▇▇▇ Fargo Servicing
Agreement. The Master Servicer shall, and (to the extent provided in the ▇▇▇▇▇
Fargo Servicing Agreement) shall cause the Servicer to, provide access to
information and documentation regarding the Mortgage Loans to the Issuer, the
Grantor Trustee,
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and their respective agents and accountants at any time upon reasonable request
and during normal business hours, and to Grantor Trust Certificateholders 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 Grantor Trustee and the Grantor Trust Certificateholders and shall be and
remain the sole and exclusive property of the Grantor Trustee; provided,
however, that the Master Servicer and the Servicer shall be entitled to set off
against, and deduct from, any such funds any amounts that are properly due and
payable to the Master Servicer or the Servicer under this Agreement or the ▇▇▇▇▇
Fargo Servicing Agreement.
Section 2.08 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.
(a) For each Mortgage Loan, the Master Servicer shall enforce any obligation of
the Servicer under the ▇▇▇▇▇ Fargo 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 ▇▇▇▇▇ Fargo Servicing
Agreement. It is understood and agreed that such insurance shall be with
insurers meeting the eligibility requirements set forth in the ▇▇▇▇▇ Fargo
Servicing Agreement and that no earthquake or other additional insurance is to
be required of any Mortgagor or to be maintained on property acquired in respect
of a defaulted loan, other than pursuant to such applicable laws and regulations
as shall at any time be in force and as shall require such additional insurance.
(b) Pursuant to Section 3.01, any amounts collected by the Servicer or
the Master Servicer, under any insurance policies (other than amounts to be
applied to the restoration or repair of the property subject to the related
Mortgage or released to the Mortgagor in accordance with the ▇▇▇▇▇ Fargo
Servicing Agreement) shall be deposited into the Master Servicer Collection
Account, subject to withdrawal pursuant to the Indenture. Any cost incurred by
the Master Servicer or the Servicer in maintaining any such insurance if the
Mortgagor defaults in its obligation to do so shall be added to the amount owing
under the Mortgage Loan where the terms of the Mortgage Loan so permit;
provided, however, that the addition of any such cost shall not be taken into
account for purposes of calculating the distributions to be made to Grantor
Trust Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to the Indenture.
Section 2.09 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Master Servicer shall (to the extent provided in the ▇▇▇▇▇ Fargo Servicing
Agreement) cause the Servicer to prepare and present on behalf of the Depositor,
the Grantor Trustee and the Grantor Trust Certificateholders 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
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to realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to the Servicer and remitted to the Master Servicer) in
respect of such policies, bonds or contracts shall be promptly deposited in the
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 2.10 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
(a) The Master Servicer shall not take, or permit the Servicer (to the extent
such action is prohibited under the ▇▇▇▇▇ Fargo Servicing Agreement) to take,
any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the Master
Servicer or the Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause the Servicer (to the
extent required under the ▇▇▇▇▇ Fargo 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 ▇▇▇▇▇ Fargo Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
the Servicer (to the extent required under the ▇▇▇▇▇ Fargo 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 ▇▇▇▇▇ Fargo Servicing Agreement, as applicable.
(b) The Master Servicer agrees to cause the Servicer (to the extent
required under the ▇▇▇▇▇ Fargo Servicing Agreement) to present, on behalf of the
Depositor, the Grantor Trustee and the Grantor Trust Certificateholders, 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 the Indenture, any amounts collected by the Master Servicer
or the Servicer under any Primary Mortgage Insurance Policies shall be deposited
in the Master Servicer Collection Account, subject to withdrawal pursuant to the
Indenture.
Section 2.11 GRANTOR TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE
POLICIES AND DOCUMENTS. The Grantor 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 Grantor Trust Certificates have been
distributed in full and the Grantor Trust Agreement has been terminated in
accordance with the Grantor Trust Agreement, the Grantor 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 Grantor 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.
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Section 2.12 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 Servicer (to the extent required under and
subject to the provisions of the ▇▇▇▇▇ Fargo Servicing Agreement and subject to
the provisions of Section 2.19 hereof) to foreclose upon, repossess or otherwise
comparably convert the ownership of Mortgaged Properties securing such of the
Mortgage Loans, as come and continue to be in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments, all
in accordance with the ▇▇▇▇▇ Fargo Servicing Agreement.
Section 2.13 COMPENSATION FOR THE MASTER SERVICER. On each Payment Date
the Master Servicer shall be entitled to all income and gain realized for a
period of two (2) Business Days from any investment of funds in the Master
Servicer Collection Account, pursuant to Article III, for the performance of its
activities hereunder (the "Master Servicer Compensation"). The remainder of such
investment income shall be payable to the Holders of the Class B Grantor Trust
Certificate as set forth in the Grantor Trust Agreement. Servicing compensation
in the form of assumption fees, if any, late payment charges, as collected, if
any, or otherwise (but not including any prepayment premium or penalty) shall be
retained by the Servicer and shall not be deposited in the Protected Account.
Moreover, additional servicing compensation in the form of investment income on
amounts in the Protected Account and other receipts not required to be deposited
in the Protected Account as specified in Section 3.01 shall be retained by the
Servicer. The Master Servicer shall be required to pay all expenses incurred by
it in connection with its activities hereunder and, in addition the fees of the
Grantor Trustee, Indenture Trustee and any Custodian as agreed on by each such
party and the Master Servicer, and shall not be entitled to reimbursement
therefor except as provided in this Agreement.
Section 2.14 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 Grantor Trustee, or to its
nominee, on behalf of the Grantor Trust Certificateholders. The Master Servicer
shall, to the extent provided in the ▇▇▇▇▇ Fargo Servicing Agreement, cause the
Servicer to sell any REO Property as expeditiously as possible and in accordance
with the provisions of the ▇▇▇▇▇ Fargo Servicing Agreement, as applicable.
Pursuant to its efforts to sell such REO Property, the Master Servicer shall
cause the Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the ▇▇▇▇▇ Fargo Servicing Agreement.
(b) The Master Servicer shall, to the extent required by the ▇▇▇▇▇
Fargo Servicing Agreement, cause the Servicer to deposit all funds collected and
received in connection with the operation of any REO Property in the Protected
Account.
(c) The Master Servicer and the Servicer, upon the final disposition of
any REO Property, shall be entitled to reimbursement for any related
unreimbursed Monthly Advances and other unreimbursed advances as well as any
unpaid Servicing Fees from Liquidation Proceeds received in connection with the
final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
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(d) To the extent provided in the ▇▇▇▇▇ Fargo Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the Servicer as provided above shall be
deposited in the Protected Account on or prior to the Determination Date in the
month following receipt thereof and be remitted by wire transfer in immediately
available funds to the Master Servicer for deposit into the Master Servicer
Collection Account on the next succeeding Servicer Remittance Date.
Section 2.15 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE. (a) The
Master Servicer shall deliver to the Grantor 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 Servicer has failed to perform
any of its duties, responsibilities and obligations under the ▇▇▇▇▇ Fargo
Servicing Agreement in all material respects throughout such year, or, if there
has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any Grantor Trust
Certificateholder upon request, by the Master Servicer or by the Grantor 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 Grantor
Trustee with such statement or (ii) the Grantor Trustee shall be unaware of the
Master Servicer's failure to provide such statement).
Section 2.16 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT; MASTER
SERVICER CERTIFICATION. 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 Grantor 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 Grantor Trust
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Certificateholder upon request by the Master Servicer, or by the Grantor 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 Grantor 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 the
Servicer, in each case, required to be delivered pursuant to the ▇▇▇▇▇ Fargo
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 2.17 RESERVED.
Section 2.18 UCC. The Depositor shall inform the Grantor 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 Grantor Trustee
promptly upon receipt by the Depositor. If directed by the Depositor in writing,
the Grantor 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 2.19 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 ▇▇▇▇▇ Fargo 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 ▇▇▇▇▇ Fargo Servicing Agreement) and related
calculations of the purchase price of the Mortgage Loans determined pursuant to
Section 4.02 of the ▇▇▇▇▇ Fargo 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
Servicer, as applicable, has notified the Master Servicer that the Investor has
forfeited its rights set forth in Section 4.02 of the ▇▇▇▇▇ Fargo Servicing
Agreement, the Master Servicer shall provide the Servicer with an Expiration
Notice indicating such event.
Section 2.20 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 Servicer was required to make an
advance pursuant to the ▇▇▇▇▇ Fargo 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 Grantor Trustee
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(solely in its capacity as successor Servicer) will deposit in the Master
Servicer Collection Account not later than the related Payment Date an amount
equal to such deficiency, net of the Servicing Fee for such Mortgage Loan except
to the extent the Grantor Trustee determines any such advance to be a
Nonrecoverable Advance. Subject to the foregoing, the Grantor Trustee (solely in
its capacity as successor Servicer) shall continue to make such advances through
the date that the Servicer is required to do so under the ▇▇▇▇▇ Fargo Servicing
Agreement. If the Grantor Trustee deems an advance to be a Nonrecoverable
Advance, on the Payment Date, the Grantor Trustee shall present an Officer's
Certificate to the Securities Administrator (i) stating that the Grantor Trustee
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 2.21 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 Servicer under the ▇▇▇▇▇ Fargo
Servicing Agreement with respect to subclauses (a) and (b) of the definition of
Interest Shortfalls with respect to the Mortgage Loans for the related
Prepayment Period, and not so paid by the Servicer and (ii) the Master Servicing
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 III
ACCOUNTS
Section 3.01 PROTECTED ACCOUNTS. (a) The Master Servicer shall enforce
the obligation of the Servicer to establish and maintain a Protected Account in
accordance with the ▇▇▇▇▇ Fargo 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 ▇▇▇▇▇ Fargo Servicing Agreement) of receipt, all
collections of principal and interest on any Mortgage Loan and any REO Property
received by the Servicer, including Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds, and advances made from the Servicer's own funds (less
servicing compensation as permitted by the ▇▇▇▇▇ Fargo Servicing Agreement in
the case of the Servicer) and all other amounts to be deposited in the Protected
Account. The Protected Account shall be an Eligible Account. The Servicer is
hereby authorized to make withdrawals from and deposits to the Protected Account
for purposes required or permitted by this Agreement. To the extent provided in
the ▇▇▇▇▇ Fargo 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 Grantor Trustee for the benefit of the Grantor
Trust Certificateholders.
(b) To the extent provided in the ▇▇▇▇▇ Fargo Servicing Agreement,
amounts on deposit in the Protected Account may be invested in Permitted
Investments in the name of the Grantor Trustee for the benefit of Grantor Trust
Certificateholders 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 3.01
shall be paid to the Servicer under the ▇▇▇▇▇ Fargo Servicing Agreement, and the
risk of loss of moneys required to be distributed to the Grantor Trust
Certificateholders resulting from such investments shall be borne by and be the
risk of the Servicer. The Servicer (to the extent required by the ▇▇▇▇▇ Fargo
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 Grantor Trust
Certificateholders.
(c) To the extent required by the ▇▇▇▇▇ Fargo Servicing Agreement and
subject to this Article IV, on or before each Servicer Remittance Date, the
Servicer shall withdraw or shall cause to be withdrawn from its Protected
Account and shall immediately deposit or cause to be deposited in the 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 Servicer pursuant to the ▇▇▇▇▇ Fargo
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;
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(ii) Principal Prepayments in full and any Liquidation
Proceeds received by the Servicer with respect to the Mortgage Loans in the
related Prepayment Period, with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the Servicing Fee;
(iii) Principal Prepayments in part received by the Servicer
for the Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals may be made from the Protected Account only to make
remittances as provided in Section 3.01(c) of this Agreement and as provided in
the Indenture; to reimburse the Master Servicer or the Servicer for Monthly
Advances which have been recovered by subsequent collections from the related
Mortgagor; to remove amounts deposited in error; to remove fees, charges or
other such amounts deposited on a temporary basis; or to clear and terminate the
account at the termination of this Agreement in accordance with Section 6.10. As
provided in Section 3.02 of this Agreement and Section 3.25 of the Indenture
certain amounts otherwise due to the Servicer may be retained by it and need not
be deposited in the Master Servicer Collection Account or the Payment Account.
Section 3.02 MASTER SERVICER COLLECTION ACCOUNT. (a) The Master
Servicer shall establish and maintain in the name of the Grantor Trustee, for
the benefit of the Grantor Trust Certificateholders, the Master Servicer
Collection Account as a segregated trust account or accounts. The Master
Servicer shall 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 EMC pursuant to the Mortgage Loan Purchase Agreement or the Grantor
Trust Agreement and any amounts which are to be treated pursuant to the Grantor
Trust Agreement as the payment of a Repurchase Price in connection with the
tender of a Substitute Mortgage Loan by EMC;
(v) Any amounts required to be deposited by the Master
Servicer or the Holder of the Class B Grantor Trust Certificate with respect to
losses on investments of deposits in the Master Servicer Collection 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 Grantor Trustee in trust
for the benefit of the Grantor Trust Certificateholders in accordance with the
terms and provisions of this Agreement. The requirements for crediting the
Master Servicer Collection Account shall be exclusive, it being
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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
3.25(a)(i), (ii), (iii), (iv), (vi), (vii), (viii), (ix), (x), (xi) and (xii) of
the Indenture, need not be credited by the Master Servicer or the Servicer to
the Master Servicer Collection Account or remitted by the Master Servicer or
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 Grantor Trustee, or its nominee, for
the benefit of the Grantor Trust Certificateholders, in Permitted Investments as
directed by the Master Servicer and consented to by the Class B Grantor Trust
Certificateholder (which consent shall not be unreasonably withheld or delayed).
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 Account from time to time shall be for the account of the Master
Servicer and the Class B Grantor Trust Certificateholder as set forth in this
Agreement. 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, subject to any required distributions to the Class
B Grantor Trust Certificateholder on each Payment Date. The risk of loss of
moneys required to be distributed to the Grantor Trust Certificateholders
resulting from such investments shall be borne by and be the risk of the Master
Servicer and the Class B Grantor Trust Certificateholder. The Master Servicer
shall deposit the amount of any related Loss Allocation Amount payable by it 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 Account Deposit Date on which the moneys so invested are required to
be remitted to the Securities Administrator.
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 3.05 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 3.03 of this
Agreement.
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Section 3.03 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER
SERVICER COLLECTION ACCOUNT. (a) The Master Servicer will, from time to time on
demand of the 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 ▇▇▇▇▇ Fargo Servicing Agreement. The Master Servicer may clear
and terminate the Master Servicer Collection Account pursuant to Section 6.10
and remove amounts from time to time deposited in error.
(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
any provision of any Basic Document as provided in this Agreement and the
Indenture and (ii) any amounts payable to the Master Servicer as set forth in
the Indenture; 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
4.03.
(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. No
later than the third Business Day of each month, the Master Servicer will remit
to the Securities Administrator the amount of investment income on funds in the
Master Servicing Collection Account payable to the Holder of the Class B Grantor
Trust Certificate pursuant to Section 3.02(c).
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ARTICLE IV
THE MASTER SERVICER
Section 4.01 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 4.02 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 4.03 INDEMNIFICATION OF THE GRANTOR TRUSTEE, OWNER TRUSTEE, THE
MASTER SERVICER AND THE SECURITIES ADMINISTRATOR. The Master Servicer agrees to
indemnify the Grantor Trustee, the Depositor and the 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 ▇▇▇▇▇ Fargo Servicing Agreement, the Assignment Agreement or the Grantor
Trust Certificates or the powers of attorney delivered by the Grantor 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 Grantor Trustee,
the Master Servicer and the Securities Administrator and the termination of this
Agreement.
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Section 4.04 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 4.03:
(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 Grantor Trust
Certificateholders for taking any action or for refraining from taking any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Master Servicer or
any such Person against any breach of warranties or representations made herein
or any liability which would otherwise be imposed by reason of such Person's
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer and any director, officer, employee or agent of
the Master Servicer shall be indemnified by the Trust Estate and held harmless
thereby against any loss, liability or expense (including reasonable legal fees
and disbursements of counsel) incurred on their part that may be sustained in
connection with, arising out of, or related to, any claim or legal action
(including any pending or threatened claim or legal action) relating to this
Agreement or any Basic Document (except to the extent that the Master Servicer
is indemnified by the Servicer under the ▇▇▇▇▇ Fargo Servicing Agreement), 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 Grantor Trust Certificateholders 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 paid therefor out
of the Master Servicer Collection Account as provided by Section 3.03. Nothing
in this Subsection 4.04(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 2.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust Estate might incur as a result
of such course of action by reason of the condition of the
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Mortgaged Properties but shall give written notice to the Grantor Trustee if it
has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions
of the Servicer, except as otherwise expressly provided herein.
Section 4.05 MASTER SERVICER NOT TO RESIGN. Except as provided in
Section 4.07, 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 Grantor Trustee and the Issuer to such effect delivered to the
Grantor Trustee and the Issuer. No such resignation by the Master Servicer shall
become effective until EMC or the Grantor Trustee or a successor to the Master
Servicer reasonably satisfactory to the Grantor Trustee shall have assumed the
responsibilities and obligations of the Master Servicer in accordance with
Section 5.02 hereof. The Grantor Trustee shall notify the Rating Agencies of the
resignation of the Master Servicer.
Section 4.06 SUCCESSOR MASTER SERVICER. In connection with the
appointment of any successor master servicer or the assumption of the duties of
the Master Servicer or the Grantor Trustee may make such arrangements for the
compensation of such successor master servicer out of payments on the Mortgage
Loans as EMC 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 master 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 4.07 SALE AND ASSIGNMENT OF MASTER SERVICING. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in its entirety as Master Servicer under this Agreement and EMC may terminate
the Master Servicer without cause and select a new Master Servicer; provided,
however, that: (i) the purchaser or transferee accepting such assignment and
delegation (a) shall be a Person which shall be qualified to master service
mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; (b) shall have a net worth of not
less than $10,000,000 (unless otherwise approved by each Rating Agency pursuant
to clause (ii) below); (c) shall be reasonably satisfactory to the Grantor
Trustee and EMC (as evidenced in a writing signed by the Grantor Trustee and
EMC); and (d) shall execute and deliver to the Grantor Trustee an agreement, in
form and substance reasonably satisfactory to the Issuer and the Grantor
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 Grantor Trustee; (iii) the Master Servicer
assigning and selling the master servicing shall deliver to the
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Issuer and the Grantor Trustee an Officer's Certificate and an Opinion of
Counsel addressed to the Issuer and the Grantor 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 EMC, EMC
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 V
DEFAULT
Section 5.01 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 Grantor Trust Certificateholders, 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 Grantor Trustee or to the Master
Servicer and the Grantor Trustee by the Holders of Grantor Trust Certificates
aggregating at least 25% of the Certificate Principal Balance of the Grantor
Trust Certificates; 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 4.05 or 4.07; 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 Business Day
before the Payment 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
Grantor Trustee or the Holders of Grantor Trust Certificates aggregating at
least 51% of the Certificate Principal Balance of the Grantor Trust
Certificates, by notice in writing to the Master Servicer (and to the Grantor
Trustee if given by such Grantor Trust Certificateholders), with a copy to the
Rating Agencies, and with the consent of EMC, 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 Grantor Trust Certificates,
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 5.02, automatically and without further
action pass to and be vested in the Grantor Trustee pursuant to this Section
5.01; and, without limitation, the Grantor 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 Grantor Trustee in
effecting the termination of the Master Servicer's rights and obligations
hereunder, including, without limitation, the transfer to the Grantor 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
Grantor 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 5.01 shall occur of which a Responsible Officer of
the Grantor Trustee has received written notice or has actual knowledge, the
Grantor 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 Grantor Trust Certificateholder or to
reimbursement of Monthly Advances and other advances of its own funds, and the
Grantor Trustee shall thereupon become the successor Master Servicer as provided
in Section 5.02 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 5.01. Any such action taken by
the Grantor Trustee must be prior to the distribution on the relevant Payment
Date.
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Section 5.02 GRANTOR TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon
the receipt by the Master Servicer of a notice of termination pursuant to
Section 5.01 or an Opinion of Counsel pursuant to Section 4.05 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 Grantor 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 EMC 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 Grantor 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 4.06, the Grantor 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 Grantor 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 Grantor 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 Grantor Trustee shall be the
successor and act in such capacity as hereinabove provided. In connection with
such appointment and assumption, the Grantor Trustee may make such arrangements
for the compensation of such successor out of payments on the Mortgage Loans as
EMC and such successor shall agree; provided, however, that the provisions of
Section 4.06 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 Grantor Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) If the Grantor 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 Grantor Trustee and, accordingly,
the provisions of the Grantor Trust Agreement shall be inapplicable to the
Grantor 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 Grantor Trustee in its capacity as Grantor Trustee); the provisions
of Article IV, however, shall apply to it in its capacity as successor master
servicer.
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Section 5.03 NOTIFICATION TO GRANTOR TRUST CERTIFICATEHOLDERS. Upon any
termination or appointment of a successor to the Master Servicer, the Grantor
Trustee shall give prompt written notice thereof to the Grantor Trust
Certificateholders at their respective addresses appearing in the Note Register
and to the Rating Agencies.
Section 5.04 WAIVER OF DEFAULTS. The Grantor Trustee shall transmit by
mail to all Grantor Trust Certificateholders, within 60 days after the
occurrence of any Master Servicer Event of Default of which a Responsible
Officer of the Grantor 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 Grantor Trust
Certificates aggregating at least 51% of the Note Principal Balance of the
Certificates may, on behalf of all Grantor Trust Certificateholders, 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 Grantor Trust Certificates, which
default may only be waived by Holders of Grantor Trust Certificates aggregating
100% of the Certificate Principal Balance of the Grantor Trust Certificates.
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 Grantor Trustee
shall give notice of any such waiver to the Rating Agencies.
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ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 AMENDMENT. (a) This Agreement may be amended from time to
time by the Depositor, the Master Servicer, the Securities Administrator and the
Grantor Trustee, without notice to or the consent of any of the Grantor Trust
Certificateholder, 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 Grantor Trustee, adversely affect in any
material respect the interests of any Grantor Trust Certificateholders.
(b) This Agreement may also be amended from time to time by the Master
Servicer, the Depositor, the Securities Administrator and the Grantor Trustee,
with the consent of the Holders of Grantor Trust Certificates aggregating at
least 51% of the Certificate Principal Balance of the Grantor Trust
Certificates, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Grantor Trust Certificateholders 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 Grantor Trust Certificate without the consent of the Holder
of such Certificate or (ii) reduce the aforesaid percentage of Grantor Trust
Certificates the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all Grantor Trust Certificates then
outstanding. Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 6.01(b),
Grantor Trust Certificates registered in the name of or held for the benefit of
the Depositor, the Securities Administrator, the Master Servicer, or the Grantor
Trustee or any Affiliate thereof shall be entitled to vote their Percentage
Interests with respect to matters affecting such Grantor Trust Certificates.
(c) Promptly after the execution of any such amendment, the Grantor
Trustee shall furnish a copy of such amendment or written notification of the
substance of such amendment to each Grantor Trust Certificateholder, with a copy
to the Rating Agencies.
(d) In the case of an amendment under Subsection 6.01(b) above, it
shall not be necessary for the Grantor Trust Certificateholders to approve the
particular form of such an amendment. Rather, it shall be sufficient if the
Grantor Trust Certificateholders approve the substance of the amendment. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Grantor Trust Certificateholders shall be subject to such
reasonable regulations as the Grantor Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Grantor Trustee shall be entitled to receive and rely upon an Opinion of Counsel
addressed to the Grantor Trustee stating that the execution of such amendment is
authorized or permitted by this Agreement. The Grantor Trustee, the Master
Servicer and the Securities Administrator may, but shall not be
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obligated to, enter into any such amendment which affects its own respective
rights, duties or immunities under this Agreement.
Section 6.02 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 Grantor Trust Certificateholders, but only if such
direction is accompanied by an Opinion of Counsel (provided at the expense of
the Grantor Trust Certificateholders requesting recordation) to the effect that
such recordation would materially and beneficially affect the interests of the
Grantor Trust Certificateholders or is required by law.
Section 6.03 GOVERNING LAW. THIS AGREEMENT 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 6.04 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, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or to such other
address as may hereafter be furnished to the other parties hereto in writing;
(ii) in the case of the Grantor 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 EMC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and its phone number is (▇▇▇) ▇▇▇-▇▇▇▇, 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, ▇▇▇▇▇ Fargo Bank, National Association, ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or, in the case of overnight deliveries, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 21045) (Attention: Corporate Trust Services -
Bear ▇▇▇▇▇▇▇ ARM Trust 2005-2), facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇, or such other
address as may hereafter be furnished to the other parties hereto in writing; or
(v) in the case of the Issuer, to Bear ▇▇▇▇▇▇▇ ARM Trust 2005-2 c/o Wilmington
Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration, or such other address
as may hereafter be furnished to the other parties hereto in writing; (vi) in
the case of the Owner Trustee, to Wilmington Trust Company, ▇▇▇▇▇▇ Square North,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Administration, or such other address as may hereafter be furnished to the other
parties hereto in writing; and (vii) in the case of the Rating Agencies,
Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Any notice delivered to the Depositor, the
Master Servicer, the Grantor 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 Grantor Trust Certificateholder, unless otherwise provided
herein, shall be given by first-class mail, postage prepaid, at the address of
such Grantor Trust
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Certificateholder as shown in the Note Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given when mailed, whether or not the Grantor Trust Certificateholder
receives such notice.
Section 6.05 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 Grantor Trust Certificateholders thereof.
Section 6.06 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon the parties hereto, the Grantor Trust Certificateholders
and their respective successors and assigns. The Grantor Trustee shall have the
right to exercise all rights of the Issuer under this Agreement.
Section 6.07 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 6.08 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 6.09 NOTICE TO RATING AGENCIES. The Grantor Trustee shall
promptly provide notice to each Rating Agency with respect to each of the
following of which a Responsible Officer of the Grantor Trustee has actual
knowledge or written notice:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Master Servicer Event of Default that
has not been cured;
3. The resignation or termination of the Master Servicer, the
Grantor Trustee or the Securities Administrator ; and
4. Any change in the location of the Master Servicer
Collection Account.
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Section 6.10 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
8.06 thereof. Upon the presentation and surrender of the Notes, the Securities
Administrator shall distribute to the remaining Securityholders, in accordance
with their respective interests, all distributable amounts remaining in the
Payment Account. Following such final Payment Date, the Grantor Trustee shall,
or shall cause the Custodian to, release promptly to the Issuer or its designee
the Mortgage Files for the remaining Mortgage Loans, and the Master Servicer
Collection Account and Payment Account shall terminate, subject to the
Securities Administrator's obligation to hold any amounts payable to the
Securityholders in trust without interest pending final distributions pursuant
to the Indenture.
Section 6.11 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 6.12 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 6.13 ADDITIONAL TERMS REGARDING INDENTURE. The Grantor 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 Grantor
Trustee shall be entitled to all of the rights, immunities, indemnities and
other protections set forth in the Grantor Trust Agreement.
-30-
IN WITNESS WHEREOF, the Depositor, Master Servicer, the Securities
Administrator, EMC and the Grantor Trustee have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., as Depositor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Master Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Securities Administrator
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
EMC MORTGAGE CORPORATION,
as Seller
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Grantor Trustee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 28th day of February, 2005 before me, a notary public in and for
said State, personally appeared _______________, known to me to be a
________________ of Structured Asset Mortgage Investments II Inc., the
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________
Notary Public
[Notarial Seal]
STATE OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
On the 28th day of February, 2005 before me, a notary public in and for
said State, personally appeared _______________, known to me to be a(n)
______________ of U.S. Bank National Association, the entity that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said entity, and acknowledged to me that such entity executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 28th day of February, 2005 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an Assistant
Vice President of ▇▇▇▇▇ Fargo Bank, National Association, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 28th day of February, 2005 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an Assistant
Vice President of ▇▇▇▇▇ Fargo Bank, National Association, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 28th day of February, 2005 before me, a notary public in and for
said State, personally appeared _______________, known to me to be a
________________ of EMC Mortgage Corporation, the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________
Notary Public
[Notarial Seal]
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[PROVIDED UPON REQUEST]
A-1
EXHIBIT B
▇▇▇▇▇ FARGO SERVICING AGREEMENT
[Provided Upon Request]