EXECUTION COPY
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BEAR XXXXXXX ASSET BACKED SECURITIES, INC.,
as Depositor,
XXXXX UNION BANK AND TRUST COMPANY,
as Seller and Master Servicer,
XXXXX WHOLE LOAN HOME EQUITY TRUST 2003-C,
as Issuer,
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
as Indenture Trustee
SALE AND SERVICING AGREEMENT
Dated as of August 1, 2003
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS......................................................1
Section 1.01. Definitions..............................................1
Section 1.02. Interpretive Provisions..................................1
Section 1.03. Interest Calculations....................................2
ARTICLE II CONVEYANCE OF MORTGAGE LOANS.....................................2
Section 2.01. Conveyance of Mortgage Loans.............................2
Section 2.02. Treatment of Transfer....................................3
Section 2.03. Mortgage File............................................3
Section 2.04. Representations and Warranties of the Master Servicer....4
Section 2.05. Representations and Warranties of the Issuer.............5
Section 2.06. Representations and Warranties of the Depositor..........5
Section 2.07. Representations and Warranties Regarding
the Mortgage Loans.......................................7
Section 2.08. Enforcement of Representations and Warranties...........16
Section 2.09. Future Advances.........................................17
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..................17
Section 3.01. Appointment of the Master Servicer......................17
Section 3.02. Subservicing Agreements Between the Master Servicer
and Subservicers........................................19
Section 3.03. Collection of Mortgage Loan Payments....................21
Section 3.04. Permitted Withdrawals from the Collection Account.......22
Section 3.05. Maintenance of Insurance................................23
Section 3.06. Fidelity Bond; Errors and Omissions Policy..............24
Section 3.07. Enforcement of Due-on-Sale Clauses;
Assumption Agreements.................................. 25
Section 3.08. Realization upon Defaulted Mortgage Loans...............26
Section 3.09. Indenture Trustee to Cooperate; Release of Mortgage Files;
Trust Estates; Related Documents........................27
Section 3.10. Servicing Fee; Payment of Certain Expenses
by Master Servicer......................................29
Section 3.11. Access to Certain Documentation and Information Regarding
the Mortgage Loans......................................29
Section 3.12. Reserved................................................30
Section 3.13. Recordation of Assignments..............................30
Section 3.14. Annual Statement as to Compliance.......................30
Section 3.15. Annual Independent Public Accountants' Servicing Report.30
Section 3.16. Xxxxxxxx-Xxxxx..........................................31
Section 3.17. Indemnification; Third-Party Claims.....................31
Section 3.18. Maintenance of Existence and Licenses; Merger or
Consolidation of the Master Servicer....................31
Section 3.19. Excluded Amounts........................................32
ARTICLE IV REPORT TO NOTEHOLDERS...........................................32
Section 4.01. Report to Noteholders...................................32
ARTICLE V THE ACCOUNTS....................................................34
Section 5.01. Accounts................................................34
Section 5.02. Collection Account......................................34
Section 5.03. Trustee Collection Account..............................36
ARTICLE VI THE MASTER SERVICER.............................................37
Section 6.01. Liability of the Master Servicer........................37
Section 6.02. Merger or Consolidation or Assumption of the Obligations
of the Master Servicer..................................37
Section 6.03. Limitation on Liability of the Master Servicer
and Others..............................................37
Section 6.04. Master Servicer Not to Resign...........................38
Section 6.05. Delegation of Duties....................................38
Section 6.06. Indenture Trustee Fees and Expenses; Indemnification....38
Section 6.07. Indemnification of Owner Trustee by Master Servicer.....40
ARTICLE VII DEFAULT.........................................................40
Section 7.01. Default.................................................40
Section 7.02. Indenture Trustee to Act; Appointment of Successor......42
Section 7.03. Notification to Securityholders.........................43
ARTICLE VIII MISCELLANEOUS PROVISIONS........................................43
Section 8.01. Amendment...............................................43
Section 8.02. Governing Law...........................................44
Section 8.03. Notices.................................................44
Section 8.04. Severability of Provisions..............................44
Section 8.05. Third-Party Beneficiaries...............................44
Section 8.06. Counterparts............................................44
Section 8.07. Effect of Headings and Table of Contents................45
Section 8.08. Termination; Clean-Up Call..............................45
Section 8.09. Certain Matters Affecting the Indenture Trustee.........46
Section 8.10. Owner Trustee Not Liable for Mortgage Documents or
Related Documents.......................................46
Section 8.11. Rights of the Enhancer........ERROR! BOOKMARK NOT DEFINED.
Section 8.12. Limitation of Liability of Owner Trustee................46
Section 8.13. Tax Treatment of Servicing Fee and Other Amounts........46
EXHIBITS
Exhibit A - Mortgage Loan Purchase and Servicing Agreement
Exhibit B - Mortgage Loan Schedule
Exhibit C - Limited Power of Attorney
Exhibit D - Request for Release of Documents
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Final Certification of Trustee
Exhibit G Form of Certification to be Provided by the Master
Servicer with Form 10-K
This SALE AND SERVICING AGREEMENT (the "Agreement"), dated as of August 1,
2003, is among Bear Xxxxxxx Asset Backed Securities, Inc., as depositor (the
"Depositor"), Xxxxx Union Bank and Trust Company, as seller (the "Seller") and
as master servicer (the "Master Servicer"), Xxxxx Whole Loan Home Equity Trust
2003-C, as issuer (the "Issuer") and Xxxxx Fargo Bank Minnesota, National
Association, as indenture trustee (the "Indenture Trustee").
WITNESSETH:
WHEREAS, pursuant to the terms of a Mortgage Loan Purchase and Servicing
Agreement, dated as of June 13, 2003, attached as Exhibit A hereto, the Seller
sold the Mortgage Loans to the Depositor, together with the applicable Mortgage
Documents and Related Documents on June 13, 2003, and thereafter, until the end
of the Managed Amortization Period, the Seller will sell to the Issuer all
Additional Balances relating thereto created after the Cut-Off Date;
WHEREAS, the Depositor will sell the Mortgage Loans and assign all of its
rights under the Mortgage Loan Purchase and Servicing Agreement to the Issuer,
together with the applicable Mortgage Documents and Related Documents, on the
Closing Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer will
issue the Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue the
Notes; and
WHEREAS, pursuant to the terms of this Agreement, the Master Servicer will
service the Mortgage Loans directly or through one or more Subservicers.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in Appendix A to the indenture dated as of August 1,
2003 (the "Indenture"), between the Issuer and the Indenture Trustee, which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02. INTERPRETIVE PROVISIONS. Unless the context otherwise
requires, (i) a term has the meaning assigned to it; (ii) an accounting term not
otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles as in effect from time to time; (iii) "or"
includes "and/or"; (iv) "including" means including without limitation; (v)
words in the singular include the plural and words in the plural include the
singular; (vi) the term "proceeds" has the meaning ascribed thereto in the UCC;
(vii) any agreement, instrument or statute defined or referred to herein or in
any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; and (viii)
references to a Person are also to such Person's permitted successors and
assigns.
Section 1.03. INTEREST CALCULATIONS. All calculations of interest hereunder
that are made in respect of any HELOC originated by the Master Servicer shall be
made on an average daily balance basis using a 365/366 day year. All
calculations of interest hereunder that are made in respect of any HLTV or any
HEL originated before January 1, 2000 shall be made either on a daily basis
using a 365/366-day year or on the basis of a 360-day year assumed to consist of
twelve 30-day months, except upon loan payoff, when interest is calculated on an
actual 365/366 day basis. All calculations of interest on the Notes (other than
the Class A-IO Notes) shall be made on the basis of the actual number of days in
the related Interest Period and a year assumed to consist of 360 days. All
calculations of interest on any other Security shall be made on the basis of a
360-day year assumed to consist of twelve 30-day months. The calculation of the
Servicing Fee shall be made on the basis of the actual number of days in the
related Interest Period and a 360-day year.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
Section 2.01. CONVEYANCE OF MORTGAGE LOANS. In consideration of the
Issuer's delivery to or upon the order of the Depositor of executed and
authenticated Notes and Certificates, in authorized denominations and in
aggregate amounts equal to the aggregate Initial Note Balance, the Depositor
does hereby sell, transfer, assign and otherwise convey to the Issuer, in trust
for the benefit of the Securityholders, without recourse, subject to the
Depositor's obligations herein:
(a) all right, title and interest of the Depositor in and to the Mortgage
Loans listed in Exhibit B hereto and all principal and interest collected after
the Cut-Off Date relating to the Cut-Off Date Principal Balances of the Mortgage
Loans, and any Additional Balances relating thereto created on or after the
Cut-Off Date until the end of the Managed Amortization Period;
(b) all right, title and interest of the Depositor in the Lien on the
Mortgaged Properties created by the related Mortgage Documents;
(c) all right, title and interest of the Depositor in any Liquidation
Proceeds and Insurance Proceeds covering the Mortgage Loans or the related
Mortgaged Properties or Mortgagors;
(d) all right, title and interest (but none of the obligations) of the
Depositor under the Mortgage Loan Purchase and Servicing Agreement, including,
but not limited to, the right to enforce, on behalf of the Depositor, the
representations and warranties made by the Seller in Section 7.01 thereof
relating to itself, the representations and warranties made by the Seller in
Section 7.02 thereof relating to the Mortgage Loans sold thereunder, and the
rights of the Depositor under Section 7.03 thereof for any breaches of those
representations and warranties.
(e) any proceeds of the foregoing and all other assets included or to be
included in the Trust for the benefit of the Securityholders.
Section 2.02. TREATMENT OF TRANSFER. It is the intention of the Depositor
that the transfer and assignment contemplated by this Agreement shall
constitute, as of its execution, a sale of all of its right, title and interest
in and to the Mortgage Loans and other property of the Trust Estate from the
Depositor to the Issuer and the beneficial interest in and title to the Mortgage
Loans and the other property shall not be part of the Depositor's estate in the
event of the filing of a bankruptcy petition by or against the Depositor under
any bankruptcy law. In the event that, notwithstanding the intent of the
Depositor, the transfer and assignment contemplated hereby is held not to be a
sale, this Agreement shall be deemed to have constituted a grant of a security
interest in the property referred to in this Section for the benefit of the
Securityholders.
Notwithstanding the characterization of certain classes of the Notes as
debt for federal, state and local income and franchise tax purposes, the parties
hereto intend to treat the transfer of the Mortgage Loans to the Trust as
provided herein as a sale, for certain non-tax purposes, of all the Depositor's
right, title and interest in and to the Mortgage Loans, whether now existing or
hereafter created, and the other property described above and all proceeds
thereof. In the event such transfer is deemed not to be a sale for such
purposes, the Depositor shall be deemed to have granted to the Trust a security
interest in all of the Depositor's right, title and interest in, to and under
the Mortgage Loans, whether now existing or hereafter created, and the other
property described above and all proceeds thereof; and this Agreement shall
constitute a security agreement under applicable law.
The Issuer hereby appoints the Indenture Trustee as its custodian for
purposes of taking possession of the Trust Estate in order to perfect any
security interest arising as a result of the operation of this Section 2.02.
Section 2.03. MORTGAGE FILE. In connection with the sale of the Mortgage
Loans to the Depositor pursuant to the Mortgage Loan Purchase and Servicing
Agreement, the Mortgage File with respect to each Mortgage Loan was delivered to
Xxxxx Fargo Bank Minnesota, National Association. In connection with the
transfer of the Mortgage Loans on the Closing Date, the Indenture Trustee will
deliver an initial certification, in the form of the certificate attached as
Exhibit E hereto, certifying that it has received a Mortgage File containing a
Mortgage Note or Loan Agreement for each such Mortgage Loan listed on the
Mortgage Loan Schedule to the Depositor. The Indenture Trustee shall not
distribute the initial certification to any other party. Within 120 days
following each such delivery of Mortgage Files, the Indenture Trustee shall
review each such Mortgage File to ascertain that the Mortgage Documents are
contained therein and that such Mortgage Documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule. Furthermore, the Indenture Trustee
shall review the following data elements contained in the Mortgage Loan Schedule
(a) the Seller's loan number, (b) the Mortgagor's name, (c) the address
(including city and state) of the related Mortgaged Property, (d) the original
principal balance and (e) the maturity of the related Mortgage Note. In so
doing, the Indenture Trustee may rely on the purported due execution and
genuineness of any signature thereon. If, within such 120 day period, the
Indenture Trustee finds any Mortgage Document (other than a Mortgage Note for
which the Indenture Trustee has received a lost note affidavit) constituting a
part of a Mortgage File not to have been executed or received or to be unrelated
to the Mortgage Loan identified in the Mortgage Loan Schedule, the Indenture
Trustee shall, promptly upon the conclusion of its review, notify the Master
Servicer and the Depositor in the form of the certificate attached as Exhibit F
hereto. The list of noted exceptions included on such Exhibit F or of any
exceptions still existing after delivery of the initial certification shall not
be provided by the Indenture Trustee to any Securityholder (or beneficial owner
thereof). The Master Servicer shall cause the Seller or, if applicable, the
Depositor within 120 days of its receipt of such notice, to correct or cure any
such defect or to cause such defect to be corrected or cured or to substitute
for or repurchase the affected Mortgage Loan pursuant to the terms of the
Mortgage Loan Purchase and Servicing Agreement.
The Indenture Trustee shall have no responsibility for reviewing any
Mortgage File except as expressly provided in this Section. In reviewing any
Mortgage File pursuant to this Section, the Indenture Trustee shall have,
without limitation, no responsibility for determining whether any document is
valid and binding, whether the text of any assignment or endorsement is in
proper or recordable form (except, if applicable, to determine if the Indenture
Trustee is the assignee or endorsee thereof), whether any document has been
recorded in accordance with the requirements of any applicable jurisdiction,
whether a blanket assignment is permitted in any applicable jurisdiction,
whether any Person executing any document is authorized to do so or whether any
signature thereon is genuine, but shall only be required to determine whether a
document has been executed and that it appears to be what it purports to be.
Section 2.04. REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER. The
Master Servicer represents and warrants to the Issuer and for the benefit of the
Indenture Trustee, as pledgee of the Mortgage Loans, as of the Closing Date:
(a) the Master Servicer is a bank duly organized and validly existing under
the laws of the State of Indiana, and has full power and authority to own its
assets and to transact the business in which it is currently engaged. The Master
Servicer (including, where appropriate, through its subsidiaries), is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the business transacted by it or properties owned or leased by
it requires such qualification and in which the failure to so qualify would have
a material adverse effect on the business, properties, assets or condition
(financial or otherwise) of the Master Servicer;
(b) the Master Servicer has full power and authority to make, execute,
deliver and perform this Agreement and all of the transactions contemplated
hereunder (including, where appropriate, through its subsidiaries), and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Agreement;
(c) the Master Servicer is not required to obtain the consent of any other
Person or any consent, license, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization or
registration or declaration as shall have been obtained or filed, as the case
may be;
(d) the execution and delivery of this Agreement and the performance of the
transactions contemplated hereby by the Master Servicer will not violate any
material provision of any existing law or regulation or any order or decree of
any court applicable to the Master Servicer or any provision of the articles or
bylaws of the Master Servicer, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Master Servicer is a party
or by which it may be bound; and
(e) except as disclosed in the Prospectus Supplement, no Proceeding of or
before any court, tribunal or governmental body is currently pending or, to the
knowledge of the Master Servicer, threatened against the Master Servicer or any
of its properties or with respect to this Agreement or the Securities that in
the opinion of the Master Servicer has a reasonable likelihood of resulting in a
material adverse effect on the transactions contemplated by this Agreement.
The foregoing representations and warranties shall survive the transfer of
the Mortgage Loans to the Trust and any termination of the Master Servicer
hereunder. Upon discovery of a breach of any representation or warranty that
materially and adversely affects the interests of the Securityholders, the party
discovering such breach shall give prompt written notice to the other parties
hereto. Within 90 days of its discovery or its receipt of notice of such breach
or, with the prior written consent of a Responsible Officer of the Indenture
Trustee, such longer period specified in such consent, the Master Servicer shall
cure such breach in all material respects.
Section 2.05. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer
hereby represents and warrants to the Master Servicer and for the benefit of
Indenture Trustee, as pledgee of the Mortgage Loans, as of the Cut-Off Date,
that:
(a) the Issuer is a statutory trust duly formed and in good standing under
the laws of the State of Delaware and has full power, authority and legal right
to execute and deliver this Agreement and to perform its obligations under this
Agreement, and has taken all necessary action to authorize the execution,
delivery and performance by it of this Agreement; and
(b) the execution and delivery by the Issuer of this Agreement and the
performance by the Issuer of its obligations under this Agreement will not
violate any provision of any law or regulation governing the Issuer or any
order, writ, judgment or decree of any court, arbitrator or governmental
authority or agency applicable to the Issuer or any of its assets. Such
execution, delivery, authentication and performance will not require the
authorization, consent or approval of, the giving of notice to, the filing or
registration with, or the taking of any other action with respect to, any
governmental authority or agency regulating the activities of statutory trusts.
Such execution, delivery, authentication and performance will not conflict with,
or result in a breach or violation of, any mortgage, deed of trust, lease or
other agreement or instrument to which the Issuer is a party or by which it may
be bound.
Section 2.06. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The
Depositor represents and warrants to the Indenture Trustee, as of the Closing
Date, that:
(a) Depositor is a corporation, validly existing and in good standing under
the laws of the State of Delaware, and has full power and authority to own its
assets and to transact the business in which it is currently engaged. The
Depositor is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the business
transacted by it or any properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets or condition (financial or
otherwise) of the Depositor;
(b) Depositor has full power and authority to make, execute, deliver and
perform this Agreement and all of the transactions contemplated hereunder, and
has taken all necessary 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 Depositor
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally, and by the
availability of equitable remedies;
(c) Depositor is not required to obtain the consent of any other Person or
any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement;
(d) the execution, delivery and performance of this Agreement by the
Depositor will not violate any provision of any existing law or regulation or
any order decree of any court applicable to the Depositor or any provision of
the articles of incorporation or bylaws of the Depositor, or constitute a
material breach of any mortgage, indenture, contract or other agreement to which
the Depositor is a party or by which it may be bound;
(e) no Proceeding of or before any court, tribunal or governmental body is
currently pending or, to the knowledge of the Depositor, threatened against the
Depositor or any of its properties or with respect to this Agreement or the
Securities;
(f) this Agreement (i) constitutes a valid transfer and assignment to the
Trust of all right, title and interest of the Depositor in and to the Mortgage
Loans, all monies due or to become due with respect thereto, all proceeds of
such Mortgage Loans, such funds as are from time to time on deposit in the
Collection Account or Trustee Collection Account and all other property
specified in the definition of "Trust Estate" as being part of the Trust Estate;
and upon payment for Additional Balances relating thereto, if any, will
constitute a valid transfer and assignment to the Trust of all right, title and
interest of the Depositor in and to such Additional Balances, all monies due or
to become due with respect thereto, all proceeds of such Additional Balances and
all other property relating thereto that is specified in the definition of
"Trust Estate" relating to Additional Balances or (ii) constitutes a grant of a
security interest, as defined in the UCC as in effect in the State of New York,
in such property in favor of the Trust or the Owner Trustee on behalf of the
Trust; provided, that if the Indenture Trustee obtains and maintains possession
of the Mortgage File for each Mortgage Loan, the Trust shall have a first
priority perfected security interest in such property; and
(g) immediately prior to the transfer and assignment to the Trust of all of
its right, title and interest in and to the Mortgage Loans, the Depositor was
the sole owner of record and was the holder of the Mortgage Loans and the
indebtedness evidenced by the related Mortgage Notes or Loan Agreements. Upon
the transfer and assignment to the Issuer, the Mortgage Loans, including the
related Mortgage Notes or Loan Agreements and the Mortgages, were not subject to
an assignment, sale or pledge to any person other than Issuer and the Depositor
had good and marketable title to and was the sole owner thereof and had full
right to transfer and sell the Mortgage Loans to the Issuer free and clear of
any encumbrance, equity, lien, pledge, charge, claim or security interest and
has the full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign the Mortgage Loans pursuant
to this Agreement and following the sale of the Mortgage Loans, the Issuer will
own the Mortgage Loans free and clear of any encumbrance, equity, participation
interest, lien other than Permitted Liens, pledge, charge, claim or security
interest. The Depositor intends to relinquish all rights to possess, control and
monitor the Mortgage Loans, and the Depositor has taken all action necessary to
transfer its ownership of the Mortgage Loans to the Trust. The Depositor
acquired any right, title and interest in and to the Mortgage Loans in good
faith and without notice of any adverse claim.
The foregoing representations and warranties shall survive the sale and
assignment of the Mortgage Loans to the Trust. Upon discovery of a breach of any
representation or warranty that materially and adversely affects the interests
of the Securityholders, the party discovering such breach shall give prompt
written notice to the other parties hereto. Within 90 days of its discovery or
its receipt of notice of such breach or, with the prior written consent of a
Responsible Officer of the Indenture Trustee, such longer period specified in
such consent, the Depositor shall cure such breach in all material respects.
Section 2.07. REPRESENTATIONS AND WARRANTIES REGARDING THE MORTGAGE LOANS.
(a) The Seller restates below, for the benefit of the Issuer, with respect
to each Mortgage Loan, the same representations and warranties made by the
Seller to the Depositor in Section 7.02 of the Mortgage Loan Purchase and
Servicing Agreement (all capitalized terms used and not defined herein shall
have the meanings given to such terms in the Mortgage Loan Purchase and
Servicing Agreement). Each representation and warranty set forth below is made
by the Seller only as of June 13, 2003.
i. The information set forth in the Mortgage Loan Schedule to the
Mortgage Loan Purchase and Servicing Agreement is complete, true and
correct in all material respects;
ii. 99.75% of the Mortgage Loans by Stated Principal Balance have no
payment which is greater than 29 days past due and none of the Mortgage
Loans have no payment which is greater than 59 days past due. To the best
of Seller's knowledge, no Mortgage Loan has been dishonored and there are
no material defaults under the terms of the Mortgage Loan, except as set
forth in this paragraph;
iii. To the best of Seller's knowledge, there is no valid offset,
right of rescission, defense or counterclaim of any obligor under any
Mortgage Note, Loan Agreement or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage Note
or Loan Agreement, and any applicable right of rescission has expired, nor
will the operation of any of the terms of such Mortgage Note, Loan
Agreement or Mortgage, or the exercise of any right thereunder, render
either the Mortgage Note, Loan Agreement or the Mortgage unenforceable, in
whole or in part, or subject to any right of rescission, set-off,
recoupment, counterclaim or defense, including, without limitation, the
defense of usury, and no such right of rescission, set-off, recoupment,
counterclaim or defense has been asserted with respect thereto. To the best
of Seller's knowledge, no Mortgage Loan is subject to any pending
bankruptcy, insolvency, reorganization or moratorium;
iv. Other than amounts that constitute Permitted Liens, to the best of
Seller's knowledge, there are no mechanics' liens or similar liens or
claims for work, labor or material affecting any Mortgaged Property which
have been filed (and no rights are outstanding that under law could give
rise to such liens), which are or may be a lien prior to, or equal with,
the lien of such Mortgage;
v. To the best of Seller's knowledge, there was and there currently is
no material damage to any such Mortgaged Property. To the best of Seller's
knowledge, there is no proceeding pending or threatened for the total or
partial condemnation of any of the Mortgaged Properties. The Seller has not
received notification that any such proceedings are scheduled to commence
at a future date.
vi. To the best of Seller's knowledge, each Mortgage is a valid,
subsisting, enforceable and perfected first or more junior lien on the
Mortgaged Property securing the related Mortgage Note or Loan Agreement,
including all buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems
affixed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing securing the Mortgage Note
or Loan Agreement's original principal balance subject to principles of
equity, bankruptcy, insolvency and other laws of general application
affecting the rights of creditors. Each Mortgaged Property is owned by the
Mortgagor in fee simple and is free and clear of all adverse claims,
encumbrances and liens other than Permitted Liens having priority over the
lien of the Mortgage. Any security agreement, chattel mortgage or
equivalent document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, subsisting enforceable, and
perfected lien and security interest on the property described therein, and
immediately prior to the sale of such Mortgage Loan to the Depositor
pursuant to the Mortgage Loan Purchase and Servicing Agreement and the
related Term Sheet, the Company had full right to sell and assign the same
to the Depositor;
vii. Each Mortgage Loan complies with, and the Seller has complied
with, applicable local, state and federal laws, regulations and other
requirements including, without limitation, usury, equal credit
opportunity, real estate settlement procedures, the Federal
Truth-In-Lending Act and disclosure laws and all applicable predatory and
abusive lending laws, and the consummation of the transactions contemplated
hereby, including without limitation, the receipt of interest by the owner
of such Mortgage Loan, will not involve the violation of any such laws,
rules or regulations. Not more than 11% of the Mortgage Loans are
classified as a "high cost" loan under Section 32 of the Home Ownership and
Equity Protection Act of 1994. Each Mortgage Loan is being (and has been)
serviced in accordance with Accepted Servicing Practices and applicable
state and federal laws, including, without limitation, the Federal
Truth-In-Lending Act and other consumer protection laws, real estate
settlement procedures, usury, equal credit opportunity and disclosure laws.
Seller shall maintain in its possession, available for the Depositor's
inspection, as appropriate, and shall deliver to the Depositor or its
designee upon demand, evidence of compliance with all such requirements;
viii. Neither the Seller nor any prior holder of any Mortgage Loan has
in any material manner impaired, waived, altered or modified the Mortgage,
Mortgage Note or Loan Agreement (except that a Mortgage Loan may have been
modified by a written instrument (a copy of which is in the Mortgage File
and the terms of which are reflected on the Mortgage Loan Schedule to the
Mortgage Loan Purchase and Servicing Agreement) which has been recorded, if
necessary to protect the interests of the owner of such Mortgage Loan;
satisfied, canceled, rescinded or subordinated such Mortgage in whole or in
part; released the applicable Mortgaged Property in whole or in part from
the lien of such Mortgage; or executed any instrument of cancellation,
rescission or satisfaction with respect thereto. No instrument of release
or waiver has been executed in connection with any Mortgage Loan, and no
Mortgagor has been released, in whole or in part from its obligations in
connection with a Mortgage Loan;
ix. A property profile, title search, limited coverage policy or title
insurance policy was obtained with respect to each Mortgage Loan, to the
extent consistent with the normal credit and underwriting policies of
Seller.
x. To the best of Seller's knowledge, all of the improvements which
were included for the purpose of determining the Appraised Value of the
Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property (and wholly within the project with
respect to a condominium unit), and no improvements on adjoining properties
encroach upon the Mortgaged Property;
xi. To the best of Seller's knowledge, all parties that have had any
interest in the Mortgage, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and disposed of
such interest, were) (A) in compliance with or exempt from any and all
applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or (3) federal
savings and loan associations or national banks having principal offices in
such state, or (4) not doing business in such state;
xii. Each Mortgage Note or Loan Agreement and the applicable Mortgage
are original and genuine, and each is the legal, valid and binding
obligation of the maker thereof, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws relating to creditors' rights generally
or by equitable principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law) and the Seller has taken
all action necessary to transfer such rights of enforceability to the
Depositor. All parties to the Mortgage Note or Loan Agreement and the
Mortgage had legal capacity to execute the Mortgage Note or Loan Agreement
and the Mortgage and each Mortgage Note or Loan Agreement and Mortgage has
been duly and properly executed by such parties;
xiii. Other than with respect to the undrawn portion of the HELOCs,
the proceeds of the Mortgage Loan have been fully disbursed; there is no
requirement for future advances thereunder and any and all requirements as
to completion of any on-site or off-site improvements. All costs, fees and
expenses incurred in making, closing or recording the Mortgage Loan were
paid and the Mortgagor is not entitled to any refund of amounts paid or due
under the Mortgage Note or Loan Agreement or Mortgage;
xiv. Each Mortgage contains customary and enforceable provisions that
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure or if
applicable, non-judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage Loan
will be able to deliver good and merchantable title to the property subject
to any senior liens. There is no homestead or other exemption available to
the Mortgagor which would interfere with such right to foreclose;
xv. With respect to each Mortgage constituting a deed of trust, either
a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage
or if no duly qualified trustee has been properly designated and so serves,
the Mortgage contains satisfactory provisions for the appointment of such
trustee by the holder of the Mortgage at no cost or expense to such holder,
and no fees or expenses are or will become payable by the Depositor to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
xvi. There are no defaults by Seller in complying with the terms of
the Mortgage, and to the best of Seller's knowledge all taxes, governmental
assessments, water, sewer and municipal charges, leasehold payments or
ground rents or other outstanding charges affecting the Mortgaged Property
which previously became due and owing have been paid;
xvii. The Mortgage Note or Loan Agreement is not and has not been
secured by any collateral, pledged account or other security other than the
lien of the corresponding Mortgage and such collateral does not serve as
security for any other obligation (other than the related first lien
mortgage and other Permitted Liens) and no Mortgage Loan is secured by more
than one Mortgaged Property;
xviii. There is no material default, breach or event of acceleration
existing under the Mortgage or the applicable Mortgage Note or Loan
Agreement; and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration, and none of (i) the Seller and
any of its affiliates (ii) any servicer or subservicer and (iii) any prior
mortgagee, of any Mortgage Loan has waived any material default, breach or
event of acceleration; no foreclosure action is threatened or has been
commenced with respect to the Mortgage Loan;
xix. There is no obligation on the part of the Seller or any other
party to make any payments with respect to the related Mortgage Loan in
addition to the Monthly Payments required to be made by the applicable
Mortgagor and except in the case of the undrawn portion of the HELOCs as of
June 13, 2003, the Mortgage Note or Loan Agreement with respect to any
Mortgage Loan does not permit or obligate the Seller to make future
advances to the Mortgagor at the option of the Mortgagor;
xx. The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount required
by the Mortgage Loan;
xxi. RESERVED.
xxii. Each of the Mortgaged Properties consists of a single parcel of
real property with a detached single-family residence erected thereon
(including a manufactured dwelling deemed to be real estate under
applicable state law), or a two- to four-family dwelling, or a townhouse,
or an individual condominium unit in a condominium project, or an
individual unit in a planned unit development. No Mortgaged Property
consists of cooperative housing or stock in a cooperative housing
corporation;
xxiii. None of the Mortgage Loans provide for deferred interest or
negative amortization. No Mortgaged Property is a timeshare;
xxiv. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on
behalf of the Mortgagor, or paid by any source other than the Mortgagor.
The Mortgage Loan is not a graduated payment Mortgage Loan;
xxv. Seller is the sole owner of record and is the holder of the
Mortgage Loan and the indebtedness evidenced by the Mortgage Note or Loan
Agreement. Upon the sale of the Mortgage Loan to the Depositor, the Seller
will retain the Mortgage File or any part thereof with respect thereto not
delivered to the Depositor or the Depositor's designee in trust only for
the purpose of servicing and supervising the servicing of the Mortgage
Loan. Upon the transfer and assignment to the Depositor, the Mortgage Loan,
including the Mortgage Note or Loan Agreement and the Mortgage, was not
subject to an assignment sale or pledge to any person other than Depositor
and the Seller had good and marketable title to and was the sole owner
thereof and had full right to transfer and sell the Mortgage Loan to the
Depositor free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest and has the full right and authority subject to
no interest or participation of, or agreement with, any other party, to
sell and assign the Mortgage Loan pursuant to the Mortgage Loan Purchase
and Servicing Agreement and following the sale of the Mortgage Loan, the
Depositor will own such Mortgage Loan free and clear of any encumbrance,
equity, participation interest, lien other than Permitted Liens, pledge,
charge, claim or security interest. The Seller intends to relinquish all
rights to possess, control and monitor the Mortgage Loan, except for the
purposes of servicing the Mortgage Loan as set forth in the Mortgage Loan
Purchase and Servicing Agreement. After June 13, 2003, the Seller will not
have any right to modify or alter the terms of the sale of the Mortgage
Loan and the Seller will not have any obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in
the Mortgage Loan Purchase and Servicing Agreement, or as otherwise agreed
to by the Seller and the Depositor. The Seller acquired any right, title
and interest in and to the Mortgage Loans in good faith and without notice
of any adverse claim;
xxvi. Other than with respect to the HELOCs, all of the Mortgage Loans
are fixed rate mortgage loans. Unless otherwise indicated on the Mortgage
Loan Schedule to the Mortgage Loan Purchase and Servicing Agreement, other
than with respect to the HELOCs, the Mortgage Note is payable in monthly
installments of principal and interest, with interest calculated and
payable in arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty years
from origination. Each HELOC provides for an initial period (the "Revolving
Period") during which the Mortgagor is required to make monthly payments of
interest payable in arrears and requires repayment of the unpaid principal
balance thereof over a period following the Revolving Period which is not
in excess of 122 months. Except with respect to the HELOCs, principal
payments on the Mortgage Loan commenced no more than ninety (90) days after
the funds were disbursed in connection with the Mortgage Loan. All required
notices of interest rate and payment amount adjustments have been sent to
the Mortgagor on a timely basis and the computations of such adjustments
were properly calculated. Installments of interest are subject to change
due to the adjustments to the Mortgage Interest Rate of each interest rate
adjustment, with interest calculated and payable in arrears. All Mortgage
interest rate adjustments have been made in strict compliance with state
and federal law and the terms of the related Note. Any interest paid has
been properly credited pursuant to state and local law.
xxvii. The Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior
written consent of the mortgagee thereunder, at the option of the mortgagee
and such provision is enforceable;
xxviii. Each of the Mortgage and, with respect to each Mortgage Loan
that is not a MERS Mortgage Loan, the Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
xxix. Except with respect to one Mortgage Loan, no Mortgagor has
notified the Seller, and the Seller has no other knowledge of any relief
requested or allowed to the Mortgagor under the Soldiers' and Sailors'
Civil Relief Act of 1940;
xxx. To the best knowledge of Seller, there exists no violation of any
local, state, or federal environmental law, rule or regulation with respect
to the Mortgaged Property which violation has or could have a material
adverse effect on the market value of such Mortgaged Property. The Seller
has no knowledge of any pending action or proceeding directly involving the
related Mortgaged Property in which compliance with any environmental law,
rule or regulation is an issue; and nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to the use and enjoyment of such Mortgaged
Property;
xxxi. For each Mortgage Loan, the related Mortgage File is complete
and contains a true, accurate and correct copy of each of the documents and
instruments specified to be included therein;
xxxii. Each Mortgage Note, each Loan Agreement, each Mortgage, each
Assignment of Mortgage and any other documents required pursuant to the
Mortgage Loan Purchase and Servicing Agreement to be delivered by the
Seller hereunder has been delivered to the Depositor or its agent;
xxxiii. No more than 45% (by Stated Principal Balance) of the Mortgage
Loans constitute "real estate mortgages" for the purposes of Treasury
Regulation ss. 301.7701(i)-1(d) under the Code. For this purpose a Mortgage
Loan constitutes a "real estate mortgage" if it satisfies either test set
out in paragraph (i) or paragraph (ii) below:
(i) The fair market value of the interest in real property
securing the obligation was at least equal to 80 percent of the
adjusted issue price of the obligation at the time the obligation was
originated (or, if later, the time the obligation was significantly
modified). For purposes of this paragraph, the fair market value of
the real property interest must be first reduced by the amount of any
lien on the real property interest that is senior to the obligation
being tested, and must be further reduced by a proportionate amount of
any lien that is in parity with the obligation being tested. The
adjusted issue price of an obligation is its issue price plus the
amount of accrued original issue discount, if any, as of the date of
determination.
(ii) Substantially all of the proceeds of the obligation were
used for one or more of the following purposes: (a) to acquire an
interest in real property; (b) to improve an interest in real
property; or (c) to protect an interest in real property, that, at the
origination date, is the only security for the obligation. For this
purpose only, substantially all of the proceeds of the obligations
means two-thirds or more of the gross proceeds. For purposes of this
paragraph, the use of the proceeds of the related Mortgage Loan to
retire an existing lien against the related Mortgaged Property is
considered use of the proceeds to protect an interest in real
property;
xxxiv. The Seller used no selection procedures that identified
the Mortgage Loans as being less desirable or valuable than other
comparable mortgage loans in the Seller's portfolio; No statement,
tape, diskette, form, report or other document furnished or to be
furnished by Seller pursuant to the Mortgage Loan Purchase and
Servicing Agreement or in connection with the transactions
contemplated hereby contains or will contain any statement that is or
will be inaccurate or misleading in any material respect or omits to
state a material fact required to be stated therein or necessary to
make the information and statements therein not misleading;
xxxv. No fraud, error, negligence, misrepresentation or material
omission of fact with respect to a Mortgage Loan has taken place on
the part of the Seller or the Mortgagor or any other party involved in
the origination or servicing of the Mortgage Loan;
xxxvi. The Mortgagor has received and has executed, where
applicable, prior to origination of the Mortgage Loan, all disclosure
and rescission materials required by applicable law with respect to
the making of the Mortgage Loan;
xxxvii. To the best of the Seller's knowledge, there has been no
default on any senior mortgage loan relating to a Mortgaged Property
that has not been cured by a person other than the Seller or an
affiliate thereof;
xxxviii. No HEL or HELOC has a Combined Loan-to-Value Ratio in
excess of 100%. No HLTV has a Combined Loan-to-Value Ratio in excess
of 125%. "Combined Loan-to-Value Ratio" means, with respect to any
Mortgage Loan, the ratio, expressed as a percentage, of the sum of
(a)(i) with respect to HELs or HLTVs, the original Principal Balance
thereof or (ii) with respect to HELOCs, the credit limit of such HELOC
at origination and (b) the outstanding principal balance at
origination of such Mortgage Loan of all other mortgage loans, if any,
secured by senior liens on the related Mortgaged Property, to the
Appraised Value.
xxxix. Excluding matters more specifically addressed in other
subsections of this Section 2.07(a), the Seller has no knowledge of
any circumstances or condition with respect to the Mortgage, the
Mortgaged Property, the Mortgagor or the Mortgagor's credit standing
that could reasonably be expected to cause investors to regard the
Mortgage Loan as an unacceptable investment, cause such Mortgage Loan
to become delinquent or adversely affect the value or the
marketability of the Mortgage Loan. The Seller did not select the
Mortgage Loans sold to Depositor based on any adverse selection of
mortgage loans in its portfolio that met Depositor's purchase
parameters for this transaction, including without limitation, the
location or condition of the Mortgaged Property, payment pattern of
the borrower or any other factor that may adversely affect the
expected cost of foreclosing, owning or holding the Mortgage Loans or
related Mortgaged Property or collecting the insurance or guarantee
proceeds related thereto;
xl. Each Mortgage Loan was originated by or for the Seller
pursuant to, and conforms with, the Seller's underwriting guidelines
as attached to the Mortgage Loan Purchase and Servicing Agreement;
xli. No less than 85 percent by Stated Principal Balance of the
Mortgage Loans have a prepayment penalty and at least 25 percent by
Stated Principal Balance have a prepayment penalty for at least three
years. With respect to each Mortgage Loan that has a prepayment
penalty feature, each such prepayment penalty is enforceable and is
permitted pursuant to federal, state and local law. Seller's business
practices are to enforce such prepayment penalty features, subject to
waiver at Seller's option for reasonable and prudent business
purposes, including, without limiting the foregoing, a refinance of
the Mortgage Loan by the Seller or any parent, subsidiary or affiliate
of the Seller. No Mortgage Loan will impose a prepayment penalty for a
term in excess of five years from the date such Mortgage Loan was
originated;
xlii. Each Mortgage Loan where the related Mortgage is in first
lien position or where the balance at origination exceeded $100,000.00
is covered by a valid and transferable tax service contract with
Transamerica Real Estate Tax Services, Inc. or such other vendor as
may be reasonably acceptable to the Depositor, which may be assigned
without the payment of any fee by the Depositor;
xliii. No Mortgage Loan was originated under a reduced
documentation program;
xliv. The Mortgage Loans conform to the characteristics set forth
in the Term Sheet;
xlv. At least 50% of the Mortgage Loans by Stated Principal
Balance in each of the Groups have conforming balances under Xxxxxx
Mae and Xxxxxxx Mac published underwriting guidelines;
xlvi. No Mortgage Loan secured by property located in the State
of Georgia and originated on or after October 1, 2002 qualifies as a
"high" cost loan as defined by applicable Georgia law;
xlvii. No Mortgage Loan secured by property in the City of New
York and originated on or after February 20, 2003 qualifies as a "high
cost" loan under New York City Local Law No. 36 (2002); and
xlviii. No Mortgage Loan secured by property in the State of New
York and originated on or after April 1, 2003 qualifies as a "high
cost" loan under New York Banking Law ss.6-1.
(b) In addition to the representations and warranties made by the Seller in
the Mortgage Loan Purchase and Servicing Agreement and assigned to the Issuer in
Section 2.01 and restated by the Seller, but only as of June 13, 2003, for the
benefit of the Issuer in Section 2.07(a), the Depositor hereby makes, for the
benefit of the Issuer, the representations and warranties in Section
2.07(a)(ii), (iii), (iv), (v) and (vi) with respect to each Mortgage Loan, but
only for the period of time from, and excluding, June 13, 2003 to, and
including, the Closing Date (the "Applicable Period"). The foregoing
representations and warranties made by the Depositor shall be deemed to be
breached by the Depositor if any such representation and warranty is inaccurate
at any time during the Applicable Period and such inaccuracy is due to events
occurring or facts arising with respect to the Mortgage Loans during the
Applicable Period. The Depositor shall have an obligation pursuant to Section
2.08 to cure or repurchase a Mortgage Loan for which there is a breach of its
representations and warranties. In the case of any Eligible Substitute Mortgage
Loans, the representations and warranties of the Depositor shall be deemed to be
made as of the related Subsequent Transfer Date. With respect to any
representation or warranty that was made by the Seller in the Mortgage Loan
Purchase and Servicing Agreement to the Seller's knowledge, if the substance of
such representation or warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interests of the
Trust, then such inaccuracy shall be deemed a breach of the representation or
warranty for all purposes under this Agreement notwithstanding such
qualification.
(c) The representations and warranties of the Seller in the Mortgage Loan
Purchase and Servicing Agreement and restated in Section 2.07(a), and the
representations and warranties of the Depositor herein shall survive the sale,
transfer and assignment of the Mortgage Loans to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture. The representations
and warranties set forth in this Section shall survive delivery of the Mortgage
Files to the Indenture Trustee pursuant to Section 2.04 and the termination of
the rights and obligations of the Master Servicer pursuant to Section 6.04 or
Article VII.
Section 2.08. ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES. The Master
Servicer, on behalf of and subject to the direction of the Indenture Trustee, as
pledgee of the Mortgage Loans, or the Issuer, shall enforce the representations
and warranties of the Seller in Sections 7.01 and 7.02 of the Mortgage Loan
Purchase and Servicing Agreement and in Section 2.07(a), and of the Depositor in
Sections 2.06(f), 2.06(g) and 2.07(b), as applicable. Upon the discovery by the
Depositor, the Master Servicer, the Issuer, the Indenture Trustee or the
Custodian of a breach of any of the respective representations and warranties
made by the Seller or by the Depositor, that materially and adversely affects
the interests of any Securityholder (or upon the occurrence of a Repurchase
Event), the Person discovering such breach shall give prompt written notice to
the other foregoing Persons and to the Seller or the Depositor, as applicable.
The Master Servicer shall promptly demand of the Seller or the Depositor, as
applicable, that within 90 days of receipt of notice making such demand it (i)
cure such breach in all material respects with respect to a breach by the Seller
of its representations and warranties in Sections 7.01 and 7.02 of the Mortgage
Loan Purchase and Servicing Agreement and Section 2.07(a), or a breach by the
Depositor of its representations and warranties in Sections 2.06(f), 2.06(g) and
2.07(b), respectively, or (ii) purchase the related Mortgage Loan from the
Issuer or substitute an Eligible Substitute Mortgage Loan (and remit to the
Trustee Collection Account any related Substitution Adjustment Amount), in the
manner set forth in Section 7.03 of the Mortgage Loan Purchasing and Servicing
Agreement in the case of a breach by the Seller of its representation or
warranty in Sections 7.01 and 7.02 of the Mortgage Loan Purchase and Servicing
Agreement and Section 2.07(a), or a breach by the Depositor of its
representation or warranty in Sections 2.06(f), 2.06(g) and 2.07(b).
The obligation of the Seller or the Depositor, as the case may be, to
accept a retransfer of a Mortgage Loan as to which a breach has occurred and is
continuing and to make any required deposit into the Collection Account or
Trustee Collection Account or to substitute an Eligible Substitute Mortgage
Loan, as the case may be, shall constitute the sole and exclusive remedy
hereunder against the Seller or the Depositor, as applicable, respecting such
breach available therefor. Notwithstanding the foregoing limitation, (i) the
Indenture Trustee shall enforce the obligations of the Seller in the Mortgage
Loan Purchase and Servicing Agreement to indemnify the Depositor, the Issuer,
the Owner Trustee and the Indenture Trustee as "Purchaser" under the Mortgage
Loan Purchase and Servicing Agreement for the breach of any covenant,
representation or warranty of the Seller pursuant to the terms of Section 12.01
of such agreement and (ii) the Seller hereby agrees to indemnify the Trust for
any costs and damages incurred by the Trust in connection with a breach of the
Seller's representations and warranties in Section 2.07(a)(vii), (xlvi), (xlvii)
or (xlviii), and that materially and adversely affects the interests of any
Securityholder.
In connection with the purchase or substitution of any Mortgage Loan, the
Issuer shall assign to the Seller or the Depositor, as applicable, all of its
right, title and interest in and to such Mortgage Loan. Upon receipt of the
Repurchase Price, or upon the completion of such substitution, the Master
Servicer shall notify the Custodian thereof, and the Custodian shall deliver the
Mortgage Files to the Master Servicer, together with all relevant endorsements
and assignments prepared by the Master Servicer that the Indenture Trustee shall
execute.
Section 2.09. FUTURE ADVANCES. With respect to the HELOCs, notwithstanding
Section 2.01, neither the Indenture Trustee nor the Trust assumes any obligation
under any Loan Agreement that provides for the funding of future advances to any
Mortgagor thereunder, and neither the Trust nor the Indenture Trustee shall be
obligated or permitted to fund any such future advances. Additional Balances
that do not constitute Excluded Amounts shall be part of the related Principal
Balance of such HELOCs as they are created and are hereby transferred to the
Trust as part of the Trust Estate on the Closing Date pursuant to this Section.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. APPOINTMENT OF THE MASTER SERVICER.
(a) Xxxxx Union Bank and Trust Company agrees to act as the Master Servicer
and to perform all servicing duties under this Agreement, subject to the terms
hereof.
(b) The Master Servicer shall service and administer the Mortgage Loans in
a manner consistent with the terms of this Agreement and as shall be normal and
usual in its general mortgage servicing activities and consistent with mortgage
servicing practices of prudent mortgage lending institutions which service
mortgage loans of the same type as the Mortgage Loans for their own accounts in
the jurisdictions in which the related Mortgaged Properties are located, and
shall have full power and authority, acting alone or through Subservicers, to do
any and all things in connection with such servicing and administration as it
may deem necessary or desirable; provided, that the Master Servicer shall at all
times remain responsible to the Issuer, the Indenture Trustee, as pledgee of the
Mortgage Loans, for the performance of its duties and obligations hereunder in
accordance with the terms hereof. Without limiting the generality of the
foregoing, the Master Servicer shall continue, and is hereby authorized and
empowered by the Issuer and the Indenture Trustee, as pledgee of the Mortgage
Loans, to execute and deliver, on behalf of itself, the Issuer, the Indenture
Trustee or any of them, any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge, and all other comparable instruments
with respect to the Mortgage Loans and the Mortgaged Properties. The Issuer, the
Indenture Trustee and the Custodian, as applicable, shall furnish the Master
Servicer with any powers of attorney or other documents necessary or appropriate
to enable the Master Servicer to carry out its servicing and administrative
duties hereunder. In addition, the Master Servicer may, at its own discretion
and on behalf of the Issuer, obtain credit information in the form of a "credit
score" from a credit repository. Within 30 days of the Closing Date, the
Indenture Trustee shall deliver to the Master Servicer no less than 50 original
limited powers of attorney substantially in the form of Exhibit C hereto.
Following the Closing Date, the Indenture Trustee shall promptly deliver further
powers of attorney as reasonably requested by the Master Servicer.
In servicing and administering the Mortgage Loans, the Master Servicer
shall employ procedures consistent with the Master Servicer's normal servicing
practices and in a manner consistent with recovery under any insurance policy
required to be maintained by a Mortgagor pursuant to the related Mortgage
Documents or by the Master Servicer pursuant to this Agreement. With respect to
Mortgage Loans that have not come into default and that constitute not more than
5% (by Principal Balance) of the Mortgage Loans, the Master Servicer may (i)
permit an increase or decrease of up to 100 basis points in the Mortgage
Interest Rate of a Mortgage Loan and (ii) allow the substitution of collateral
for a Mortgage Loan in such Group, in both cases, in accordance with the Master
Servicer's customary servicing practices. With respect to Mortgage Loans that
have come into and continue in default and that constitute not more than 5% (by
Principal Balance) of the Mortgage Loans, the Master Servicer may (i) permit any
increase or decrease in the Mortgage Interest Rate of a Mortgage Loan in such
Group and (ii) allow the substitution of collateral for a Mortgage Loan in such
Group, in both cases, in accordance with the Master Servicer's customary
servicing practices.
The Master Servicer may, without prior approval from any Person, increase
the Credit Limit on any HELOC in a manner consistent with the Master Servicer's
customary servicing practices. The Master Servicer may, without prior approval
from any Person, repurchase Mortgage Loans from the Trust at the Repurchase
Price in cases where Mortgage Loans are found to be in breach of the related
purchase agreement that the Master Servicer has with brokers or correspondent
lenders, even if such Mortgage Loans are not otherwise in breach of this
Agreement.
The relationship of the Master Servicer, and of any successor to the Master
Servicer as master servicer hereunder, to the Issuer under this Agreement is
intended by the parties to be that of an independent contractor and not that of
a joint venturer, partner or general agent.
The Master Servicer shall make any Mortgage Interest Rate adjustments on
each Interest Adjustment Date for any Mortgage Loan with an adjustable Mortgage
Interest Rate in compliance with applicable regulatory adjustable mortgage loan
requirements and the related Loan Agreements. The Master Servicer shall
establish procedures to monitor the Interest Adjustment Dates in order to ensure
that it uses a published interest rate in determining an interest rate change,
and it will comply with such procedures. In the event that a published interest
rate is no longer available, the Master Servicer shall choose a new comparable
published interest rate in accordance with the provisions hereof, the related
Loan Agreements and the Master Servicer's normal servicing practices, and shall
provide the related Mortgagor, the Issuer, the Indenture Trustee with notice of
the new published interest rate sufficient under law and the related Loan
Agreement. The Master Servicer shall execute and deliver all appropriate notices
required by the applicable adjustable mortgage loan laws and regulations and the
related Loan Agreements regarding such adjustments. If the Master Servicer fails
to make a timely Mortgage Interest Rate adjustment in accordance with the terms
of the related Loan Agreement, the Master Servicer shall use its own funds to
satisfy any shortfall in Collections resulting therefrom for so long as such
shortfall shall continue. Any such amount paid by the Master Servicer shall be
reimbursable to it from any subsequent amounts collected on account of the
related Mortgage Loan with respect to such adjustments.
(c) On and after such time as the Owner Trustee receives the resignation
of, or notice of the removal of, the Master Servicer from its rights and
obligations under this Agreement, and with respect to a resignation pursuant to
Section 6.04, after receipt by the Owner Trustee of the Opinion of Counsel
required pursuant to Section 6.04, the Indenture Trustee or its designee shall
assume all of the rights and obligations of the Master Servicer, subject to
Section 7.02. The Master Servicer shall, upon request of the Indenture Trustee
and at the expense of the Master Servicer, deliver to the Indenture Trustee all
documents and records relating to the Mortgage Loans and an accounting of
amounts collected and held by the Master Servicer, and shall otherwise use its
best efforts to effect the orderly and efficient transfer of servicing rights
and obligations to the assuming Person.
(d) The Master Servicer shall deliver a list of Servicing Officers to the
Issuer and the Indenture Trustee by the Closing Date, which list may from time
to time be amended, modified or supplemented by the subsequent delivery to the
Issuer and the Indenture Trustee of any superseding list of Servicing Officers.
(e) The Master Servicer and the Depositor hereby agree that all of the
servicing duties and obligations of Xxxxx Union Bank and Trust Company under the
Mortgage Loan Purchase and Servicing Agreement are hereby superseded in their
entirety by the servicing duties and obligations set forth in this Sale and
Servicing Agreement.
Section 3.02. SUBSERVICING AGREEMENTS BETWEEN THE MASTER SERVICER AND
SUBSERVICERS.
(a) The Master Servicer may enter into Subservicing Agreements with
Subservicers for the servicing and administration of certain of the Mortgage
Loans and for the performance of any and all other activities of the Master
Servicer hereunder. References in this Agreement to actions taken or to be taken
by the Master Servicer in servicing the Mortgage Loans include actions taken or
to be taken by a Subservicer on behalf of the Master Servicer, and any amount
actually received by such Subservicer in respect of a Mortgage Loan shall be
deemed to have been received by the Master Servicer, whether or not actually
received by the Master Servicer. Each Subservicing Agreement shall be upon such
terms and conditions as are not inconsistent with this Agreement and as the
Master Servicer and the Subservicer shall have agreed. With the approval of the
Master Servicer, a Subservicer may delegate its servicing obligations to
third-party servicers, but such Subservicers shall remain obligated under the
related Subservicing Agreements. The Master Servicer and the related
Subservicers may enter into amendments to the Subservicing Agreements; provided,
that any such amendments shall not cause the Mortgage Loans to be serviced in a
manner that would be materially inconsistent with the standards set forth in
this Agreement. The Master Servicer shall be entitled to terminate any
Subservicing Agreement in accordance with the terms and conditions thereof and
without any limitation by virtue of this Agreement; provided, that in the event
of the termination of any Subservicing Agreement by the Master Servicer or the
related Subservicer, the Master Servicer shall either act as servicer of the
related Mortgage Loans or enter into a Subservicing Agreement with a successor
Subservicer that will be bound by the terms of the related Subservicing
Agreement. The Master Servicer shall be entitled to enter into any agreement
with a Subservicer for indemnification of the Master Servicer, and nothing
contained herein shall be deemed to limit or modify such indemnification.
Each Subservicer shall be (i) a depository institution the accounts of
which are insured by the FDIC or (ii) another entity that engages in the
business of originating, acquiring or servicing mortgage loans, and in either
case shall be authorized to transact business in those States in which (x) the
related Mortgaged Properties are situated and (y) qualification is required to
conduct a subservicing business operation. In addition, each Subservicer shall
obtain and preserve its qualifications to do business as a foreign corporation
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Securities or any
Mortgage Loan, and to perform or cause to be performed its duties under the
related Subservicing Agreement, which shall provide that the Subservicer's
rights will automatically terminate upon the termination, resignation or other
removal of the Master Servicer under this Agreement. Each account used by any
Subservicer for the deposit of payments on any Mortgage Loan shall be an
Eligible Account. Xxxxx Home Equity Corporation shall be the initial
Subservicer.
(b) Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and a Subservicer or any references to actions taken through a
Subservicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Issuer and the Indenture Trustee for the servicing and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement, without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
related Subservicer, and to the same extent and under the same terms and
conditions as if the Master Servicer alone were servicing and administering the
Mortgage Loans.
As part of its servicing activities hereunder, the Master Servicer, for the
benefit of the Issuer and the Indenture Trustee, shall use reasonable efforts to
enforce the obligations of each Subservicer under the related Subservicing
Agreement to the extent that the non-performance of any such obligation would
have a material adverse effect on any Mortgage Loan. Such enforcement, including
the legal prosecution of claims, termination of Subservicing Agreements and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, and shall be reimbursed therefor only from (i) a general recovery
resulting from such enforcement to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loan or (ii) a
specific recovery of costs, expenses or attorneys' fees against the Person
against whom such enforcement is directed.
In the event the Master Servicer shall for any reason no longer be the
Master Servicer, the Indenture Trustee or its designee may (i) assume all of the
rights and obligations of the Master Servicer under each Subservicing Agreement
that the Master Servicer may have entered into, which assumption shall not
violate the terms of the related Subservicing Agreement, (ii) notwithstanding
anything to the contrary contained in each such Subservicing Agreement,
terminate the related Subservicer without being required to pay any fee in
connection therewith or (iii) assume the terminated Master Servicer's rights and
obligations under such subservicing arrangements, which termination or
assumption shall not violate the terms of the related Subservicing Agreement.
(c) With respect to each Payment Date, on the twenty-first (21st) calendar
day of each month (or if such day is not a Business Day, the following Business
Day), the Master Servicer shall furnish a statement to the Indenture Trustee, in
writing or in an electronic format as the Indenture Trustee shall reasonably
request, setting forth all information reasonably necessary to allow the
Indenture Trustee to make the distributions contemplated by Section 3.05 of the
Indenture and to deliver the statement required to be delivered pursuant to
Section 3.25 of the Indenture and Section 4.01 hereof.
Section 3.03. COLLECTION OF MORTGAGE LOAN PAYMENTS. The Master Servicer
shall use commercially best efforts to collect all payments called for under the
terms and provisions of the Mortgage Documents and shall, to the extent such
procedures shall be consistent with this Agreement, follow such collection
procedures as shall constitute the Master Servicer's collection procedures for
mortgage loans serviced by it for its own account. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Master
Servicer may in its discretion (i) waive any late payment charge, overlimit fee,
prepayment penalty or other fees that may be collected in the ordinary course of
servicing a Mortgage Loan; (ii) arrange with a Mortgagor a schedule for the
payment of principal and interest due and unpaid; provided, that such
arrangement is consistent with the Master Servicer's policies with respect to
mortgage loans; and provided further, that notwithstanding such arrangement,
such Mortgage Loans shall be included in the information regarding delinquent
Mortgage Loans set forth in the Loan Level Data Report, but shall not be
separately identified as being subject to a payment arrangement. The Master
Servicer may also extend the due date for payment due on a Mortgage Loan in
accordance with its normal servicing practices; provided, that the Master
Servicer shall first determine that any such waiver or extension will not
materially adversely affect the Lien of the related Mortgage Documents or the
interests of the Issuer or the Indenture Trustee and with respect to any
Mortgage Loan, the due date for any payment due under any Mortgage Loan may not
be extended beyond the maturity date of the Mortgage Loan with the latest
maturity date as of the Cut-Off Date. With respect to any Mortgage Loan that is
180 days or more delinquent, the Master Servicer will treat such loan as a
Liquidated Mortgage Loan. Notwithstanding such treatment, the Master Servicer
will continue to make reasonable efforts to collect all payments due on any such
delinquent Mortgage Loan. Consistent with the terms of this Agreement, the
Master Servicer may waive, modify or vary any term of any Mortgage Loan,
subject, if applicable, to the second paragraph of Section 3.01(b).
Notwithstanding the foregoing, in the ordinary course of its business, the
Master Servicer, including through its affiliates, may offer mortgage products
via promotions or solicitations as well as respond to unsolicited requests for
refinancing from Mortgagors on the Mortgage Loans. The Master Servicer may also
waive any prepayment penalties with respect to any refinancing of a Mortgage
Loan in accordance with its normal servicing practices
Consistent with the terms of this Agreement, the Master Servicer may
consent to the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor; provided, that in the Master
Servicer's determination, such waiver, modification, postponement or indulgence
relates to a reasonable business purpose; and provided further, that such
waiver, modification, postponement or indulgence shall not materially and
adversely affect the interests of the Securityholders. In addition, and without
limitation, if a HELOC is in default or, in the judgment of the Master Servicer,
such default is reasonably foreseeable, the Master Servicer may, through
modification or otherwise, convert such HELOC to a fully amortizing HEL.
Section 3.04. PERMITTED WITHDRAWALS FROM THE COLLECTION ACCOUNT. The Master
Servicer is hereby authorized from time to time to make withdrawals from the
Collection Account for the following purposes:
(a) on each Master Servicer Remittance Date, to deposit the amount required
by Section 5.03 hereof for the related Payment Date into the Trustee Collection
Account;
(b) on each Master Servicer Remittance Date prior to the end of the Managed
Amortization Period for Group II, Principal Collections with respect to Mortgage
Loans assigned to Group II shall be applied toward the purchase from the Seller
of Additional Balances to be assigned to Group II; provided, that the aggregate
amount so paid to the Seller in respect of Additional Balances at any time
during any related Collection Period shall not exceed the amount of Principal
Collections for Mortgage Loans assigned to Group II received during such
Collection Period;
(c) to the extent deposited into the Collection Account, to reimburse
itself or the related Subservicer for previously unreimbursed expenses incurred
in maintaining insurance policies pursuant to Section 3.05, for Liquidation
Expenses paid pursuant to Section 3.08 or for expenses otherwise reimbursable
pursuant to the terms of this Agreement (including expenses incurred in
connection with a bankruptcy filing by a Mortgagor) to the extent not payable
pursuant to Section 3.08 (other than expenses incurred by the Master Servicer
pursuant to Sections 6.03, 6.06 and 6.07 of this Agreement); such withdrawal
right being limited to amounts received in respect of the Mortgage Loans, other
than any Repurchase Price in respect thereof, that represent late recoveries of
the payments for which such advances were made, or from Liquidation Proceeds or
the proceeds of the purchase of such Mortgage Loans;
(d) to pay to itself out of each payment received in respect of interest on
a Mortgage Loan as contemplated by clause (b) of the last paragraph of Section
3.08, an amount equal to the Servicing Fee, to the extent not retained pursuant
to Section 5.02;
(e) to pay to the Seller or the Depositor, as applicable, with respect to
any Mortgage Loan or Mortgaged Property that has been purchased or otherwise
transferred to the Seller or the Depositor, all amounts received thereon that
are not required to be distributed to the Securityholders as of the date on
which the related Purchase Price or Repurchase Price is determined; and
(f) to withdraw any other amount deposited into the Collection Account that
was not required to be deposited therein pursuant to Section 5.02.
On each Master Servicer Remittance Date, the Master Servicer shall transfer
from the Collection Account to the Trustee Collection Account the amount
necessary for the Indenture Trustee to make the required distributions pursuant
to Section 3.05 of the Indenture. The Master Servicer shall keep and maintain
separate accounting on a loan-by-loan basis for the purpose of justifying any
withdrawal from the Collection Account pursuant to the foregoing paragraphs.
Notwithstanding any other provision of this Agreement, the Master Servicer shall
be entitled to reimburse itself for any previously unreimbursed expenses
relating to a Mortgage Loan incurred pursuant to Section 3.08 or otherwise
reimbursable pursuant to the terms of this Agreement that the Master Servicer
determines to be otherwise nonrecoverable, except with respect to any Mortgage
Loan as to which the Purchase Price or Repurchase Price shall have been paid, by
withdrawal from the Collection Account, on any Business Day prior to the Payment
Date succeeding the date of such determination, of amounts on deposit therein
attributable to the Mortgage Loan.
Section 3.05. MAINTENANCE OF INSURANCE.
(a) With respect to each Mortgage Loan, the Master Servicer shall maintain
accurate records reflecting the fire and casualty insurance coverage maintained
by the related Mortgagors with respect to the Mortgaged Properties in accordance
with its normal servicing practices. The Master Servicer may, if it has received
notice of a default or deficiency in respect of the payment of any ground rents,
taxes, assessments, water rates or casualty insurance premiums or other charges
that are or may become a Lien upon the related Mortgaged Property, notify the
related Mortgagor and the holder of the first Lien on the related Mortgaged
Property.
(b) To the extent permitted under the related Mortgage Documents, and to
the extent the Master Servicer receives notice that a hazard insurance policy
has been cancelled, the Master Servicer shall, to the extent consistent with its
normal servicing practices, cause to be maintained for each Mortgage Loan hazard
insurance naming the Master Servicer or the related Subservicer as loss payee
thereunder, and providing extended coverage in an amount at least equal to the
lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan from time to time or (ii) the principal balance owing on such
Mortgage Loan from time to time. The Master Servicer shall monitor the
maintenance of any such hazard insurance so obtained in accordance with its
normal servicing practices.
(c) The Master Servicer shall cause to be maintained with respect to any
REO Property fire insurance with extended coverage in an amount at least equal
to the lesser of (i) the full insurable value of the improvements that are a
part of such property and (ii) the Principal Balance owing on the related
Mortgage Loan at the time of such foreclosure or deed in lieu of foreclosure.
Such insurance may be maintained in the form of one or more blanket insurance
policies. Amounts collected by the Master Servicer under any such policies,
other than amounts to be applied to the restoration or repair of Mortgaged
Property or REO Property or amounts released to the Mortgagor in accordance with
the Master Servicer's normal servicing practices, shall be deposited into the
Collection Account to the extent provided in Section 5.02.
(d) If, upon the origination of a Mortgage Loan, the related Mortgaged
Property was in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, and flood insurance
has been made available, the Master Servicer shall cause to be maintained, to
the extent required by the related Mortgage Documents, a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable insurance carrier, in an amount
representing coverage at least equal to the lesser of (i) the unpaid Principal
Balance of such Mortgage Loan, (ii) the full insurable value of such Mortgaged
Property or (iii) the maximum amount of insurance available under the Flood
Disaster Protection Act of 1973, as amended. With respect to any REO Property
identified as being in a flood zone at origination, the Master Servicer shall
also maintain, if applicable, flood insurance in an amount at least equal to the
lesser of (i) the maximum insurable value of the improvements that are a part of
such property and (ii) the Principal Balance owing on the related Mortgage Loan
at the time of foreclosure or grant of deed in lieu of foreclosure plus accrued
interest and related Liquidation Expenses.
(e) Pursuant to Section 3.03, any amounts collected by the Master Servicer
under any insurance policy maintained pursuant to this Section, other than
amounts to be applied to the restoration or repair of Mortgaged Property or
released to a Mortgagor in accordance with the Master Servicer's normal
servicing practices, shall be deposited into the Collection Account, subject to
withdrawal pursuant to Section 3.04. Any cost incurred by the Master Servicer in
maintaining any such insurance shall be added to the amount owing under the
related Mortgage Loan where the terms of the related Mortgage Documents so
permit; provided, that the addition of any such cost shall not be taken into
account for purposes of calculating the Principal Balance of such Mortgage Loan
or distributions to be made to Securityholders. Such costs shall be recoverable
by the Master Servicer pursuant to Section 3.04.
(f) The Master Servicer shall be under no obligation to maintain or require
any Mortgagor to maintain earthquake, title or other additional insurance, and
shall be under no obligation itself to maintain any such additional insurance on
property acquired in respect of any Mortgage Loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.
Section 3.06. FIDELITY BOND; ERRORS AND OMISSIONS POLICY.
(a) The Master Servicer shall maintain with a responsible company, and at
its own expense, a banker's blanket fidelity bond (a "Fidelity Bond") and a
mortgage errors and omissions insurance policy (an "Errors and Omissions
Policy"), in amounts as required by FNMA and FHLMC and as are commercially
available and at costs that are not generally regarded as excessive by industry
standards. Any fidelity bond shall protect against the dishonest acts of
officers and employees. Any such Fidelity Bond or Errors and Omissions Policy
shall not be canceled or modified by the Master Servicer in a manner materially
adverse to the Securityholders without the prior written consent of the Issuer
and the Indenture Trustee.
(b) The Master Servicer shall be deemed to have complied with this
provision if any of its Affiliates has such a Fidelity Bond and Errors and
Omissions Policy and, by the terms of such policy, the coverage afforded
thereunder extends to the Master Servicer. The Master Servicer shall cause each
Subservicer to maintain an Errors and Omissions Policy and a Fidelity Bond
meeting the requirements of this Section.
Section 3.07. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. In
any case in which a Mortgaged Property is about to be conveyed by the related
Mortgagor, whether by absolute conveyance, contract of sale or otherwise, and
whether or not such Mortgagor remains liable thereon, and the Master Servicer
has knowledge of such prospective conveyance, the Master Servicer shall enforce
any due-on-sale provision contained in such Mortgage Documents to the extent
permitted by such Mortgage Documents, unless such provision in the reasonable
judgment of the Master Servicer is not exercisable under applicable law,
governmental regulations or in the Master Servicer's reasonable judgment that it
would be in the best financial interests of the Trust, in which case the Master
Servicer may enter into an assumption and modification agreement or a
substitution of liability agreement with such Mortgagor. The Master Servicer or
the related Subservicer, as the case may be, shall be entitled to (i) execute
assumption agreements, substitution agreements and instruments of satisfaction
or cancellation or of partial or full release or discharge, or any other
document contemplated by this Agreement or other comparable instruments with
respect to the Mortgage Loans and the related Mortgaged Properties; and the
Issuer and the Indenture Trustee each shall promptly execute any such documents
upon the request of the Master Servicer, and (ii) approve the granting of an
easement on Mortgaged Property in favor of another Person, any alteration or
demolition of such Mortgaged Property or other similar matters, if it has
determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the security for,
and the timely and full collection of, such Mortgage Loan would not be adversely
affected thereby. The Master Servicer shall notify the Indenture Trustee that
any such assumption or substitution agreement has been completed by forwarding
to the Indenture Trustee the original copy of such assumption or substitution
agreement, which the Indenture Trustee shall add to the related Mortgage File
and which shall, for all purposes, be considered part of such Mortgage File to
the same extent as all other documents and instruments constituting a part
thereof. The Master Servicer shall retain as servicing compensation any fee
collected by the Master Servicer for entering into an assumption or substitution
of liability agreement. A partial release pursuant to this Section shall be
permitted only if the Combined Loan-to-Value Ratio for the related Mortgage Loan
after such partial release does not exceed the Combined Loan-to-Value Ratio for
such Mortgage Loan as of the related Cut-Off Date.
Notwithstanding the provisions of this Section or any other provision of
this Agreement, the Master Servicer shall not be deemed to be in default, breach
or violation of any of its obligations hereunder by reason of any conveyance by
a Mortgagor of the related Mortgaged Property or any assumption of a Mortgage
Loan by operation of law with respect to which the Master Servicer determines in
good faith that it may be restricted by law from preventing, for any reason
whatsoever, or if the exercise of such right would impair or threaten to impair
any recovery under any applicable insurance policy or, in the Master Servicer's
judgment, would be reasonably likely to result in legal action by such
Mortgagor.
Section 3.08. REALIZATION UPON DEFAULTED MORTGAGE LOANS. With respect to
each Mortgage Loan that comes into and continues in default, the Master Servicer
shall exercise its reasonable judgment to determine whether to (a) foreclose on
the related Mortgaged Property, (b) write off the unpaid Principal Balance
thereof as bad debt, (c) take a deed in lieu of foreclosure, (d) accept a short
sale, (e) arrange for a repayment plan, (f) agree to a modification thereof in
accordance with this Agreement, (g) xxx on the underlying promissory note, (h)
sell the Mortgage Loan as a nonperforming asset to a third party not an
Affiliate of the Master Servicer or Depositor or (i) take an unsecured note, in
each case subject to the rights of any related senior lienholder, provided,
however, that the Master Servicer may sell the Mortgage Loan or take an
unsecured note pursuant to clauses (h) and (i), respectively, only if the
Mortgage Loan has been charged off or constitutes a Liquidated Mortgage Loan.
The Master Servicer shall in no event expend funds in connection with any
foreclosure or attempted foreclosure that is not completed or towards the
correction of any default on a related senior mortgage loan or restoration of
any property if it shall determine that such expenditure would not increase the
related Liquidation Proceeds. In the event of a determination by the Master
Servicer that any such expenditure previously made pursuant to this Section will
not be reimbursable from Liquidation Proceeds, the Master Servicer shall be
entitled to reimbursement of its funds so expended pursuant to Section 3.04(c).
Notwithstanding the foregoing provisions of this Subsection 3.08, with
respect to any Mortgage Loan as to which the Master Servicer has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property, the Master Servicer shall not
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action, with respect to, such Mortgaged Property if, as a result of any
such action, the Trust would be considered to hold title to, to be a
mortgagee-in-possession of, or to be an owner or operator of such Mortgaged
Property within the meaning of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, or any
comparable law, unless the Master Servicer has previously determined, based on
its reasonable judgment and a prudent report prepared by a Person who regularly
conducts environmental audits using customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable environmental
laws or, if not, that it would be in the best economic interest of the Trust to
take such actions as are necessary to bring the Mortgaged Property into
compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property relating
to the use, management or disposal of any hazardous substances, hazardous
materials, hazardous wastes, or petroleum-based materials for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any federal, state or local law or regulation, or that if any
such materials are present for which such action could be required, that it
would be in the best economic interest of the Trust to take such actions with
respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this Subsection
3.08 shall be advanced by the Master Servicer, subject to the Master Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.04(c).
If the Master Servicer determines that it is in the best economic interest
of the Trust to take such actions as are necessary to bring any such Mortgaged
Property into compliance with applicable environmental laws, or to take such
action with respect to the containment, clean-up or remediation of hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based materials
affecting any such Mortgaged Property, then the Master Servicer shall take such
action as it deems to be in the best economic interest of the Trust. The cost of
any such compliance, containment, cleanup or remediation shall be advanced by
the Master Servicer, subject to the Master Servicer's right to be reimbursed
therefor from the Collection Account as provided in Section 3.04(c).
Notwithstanding any other provision of this Agreement, a defaulted Mortgage
Loan may be deemed to be finally liquidated if substantially all amounts
expected by the Master Servicer to be received in connection therewith have been
received; provided, that any subsequent collections with respect to any such
Mortgage Loan shall be deposited into the Collection Account. For purposes of
determining the amount of any Liquidation Proceeds or Insurance Proceeds, or
other unscheduled collections, the Master Servicer may take into account amounts
of additional receipts it expects to receive or any estimated additional
Liquidation Expenses it expects to incur in connection with such Mortgage Loan.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Master Servicer, which shall hold the same on behalf of
the Issuer. Notwithstanding any such acquisition of title and cancellation of
the related Mortgage Loan, such Mortgaged Property shall, except as otherwise
expressly provided herein, be considered to be an outstanding Mortgage Loan held
as part of the Trust Estate until such time as such Mortgaged Property shall be
sold. Consistent with the foregoing, for purposes of all calculations hereunder,
so long as such Mortgaged Property shall be considered to be an outstanding
Mortgage Loan, it shall be assumed that, notwithstanding that the indebtedness
evidenced by the related Mortgage Documents shall have been discharged, such
Mortgage Documents in effect at the time of any such acquisition of title before
any adjustment thereto by reason of any bankruptcy or similar Proceeding or any
moratorium or similar waiver or grace period will remain in effect.
Any proceeds from foreclosure Proceedings or the purchase or repurchase of
any Mortgage Loan pursuant to the terms of this Agreement and any recovery
resulting from a collection of Liquidation Proceeds or Insurance Proceeds, shall
be applied in the following order of priority: (a) to reimburse the Master
Servicer or the related Subservicer in accordance with this Section; (b) to pay
to the Master Servicer or the related Subservicer all Servicing Fees payable
therefrom (without duplication for any proceeds applied pursuant to clause (a));
(c) as accrued and unpaid interest on such Mortgage Loan at the related Mortgage
Interest Rate to the Payment Date in respect of which such amounts are to be
deposited into the Trustee Collection Account; and (d) as a recovery of
principal on such Mortgage Loan.
Section 3.09. INDENTURE TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES;
TRUST ESTATES; RELATED DOCUMENTS.
(a) On or before each Payment Date, the Master Servicer shall notify the
Indenture Trustee or the Custodian (with a copy to the Issuer) of the
termination or payment in full of any Mortgage Loan during the preceding
Collection Period. Upon receipt of payment in full, the Master Servicer shall be
authorized to execute, pursuant to the authorization contained in the first
paragraph of Section 3.01(b), if the Assignments of Mortgage have been recorded
if required pursuant hereto or pursuant to the Mortgage Loan Purchase and
Servicing Agreement, an instrument of satisfaction regarding the related
Mortgage Documents, which instrument of satisfaction shall be recorded by the
Master Servicer if required by applicable law, and shall be delivered to the
Person entitled thereto. Any expenses incurred in connection with such
instrument of satisfaction or transfer shall be reimbursable from amounts on
deposit in the Collection Account. From time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan, the Indenture Trustee or the
Custodian shall, upon request of the Master Servicer and delivery to the
Indenture Trustee or the Custodian (with a copy to the Issuer) of two copies of
a Request for Release in the form of Exhibit D hereto, which shall be signed by
a Servicing Officer or be in a mutually agreeable electronic format that, in
lieu of being manually signed by a Servicing Officer, emanate from a Servicing
Officer, release or cause to be released the related Mortgage File to the Master
Servicer, and the Issuer and the Indenture Trustee shall promptly execute such
documents, in the forms provided by the Master Servicer, as shall be necessary
for the prosecution of any such Proceedings or the taking of other servicing
actions. The Request for Release shall obligate the Master Servicer to return
such Mortgage File to the Indenture Trustee or the Custodian (as specified
therein) when the need therefor by the Master Servicer no longer exists, unless
such Mortgage Loan shall have been liquidated.
If an Assignment of Mortgage has been recorded, in order to facilitate the
foreclosure of the Mortgaged Property securing a Mortgage Loan that is in
default following such recordation, the Indenture Trustee or the Issuer shall,
if so requested in writing by the Master Servicer, promptly execute an
appropriate assignment in the form provided by the Master Servicer to assign
such Mortgage Loan for the purpose of collection to the Master Servicer, and any
such assignment shall unambiguously indicate that such assignment is for the
purpose of collection only. Upon such assignment, the Master Servicer, as
assignee for collection, will thereupon bring all required actions in its own
name and otherwise enforce the terms of such Mortgage Loan and deposit into or
credit to the Collection Account any Liquidation Proceeds received with respect
thereto. In the event that all delinquent payments due under any such Mortgage
Loan are paid by the related Mortgagor and any other defaults are cured, then
the Master Servicer, as assignee for collection, shall promptly reassign such
Mortgage Loan to the Indenture Trustee and return all Mortgage Documents and
Related Documents to the place where the related Mortgage File was being
maintained.
The Indenture Trustee, as pledgee of the Mortgage Loans and as assignee of
record of the Mortgage Loans on behalf of the Issuer pursuant to Section 3.13 of
the Indenture, shall, on behalf of the Issuer, take all such actions on behalf
of the Issuer and promptly execute and return all instruments reasonably
required by the Master Servicer in connection therewith; provided, that if the
Master Servicer requests a signature of the Indenture Trustee on behalf of the
Issuer, the Master Servicer shall deliver to the Indenture Trustee an Officer's
Certificate stating that such signature is necessary or appropriate to enable
the Master Servicer to carry out its servicing and administrative duties under
this Agreement.
(b) Where the Issuer or the Indenture Trustee is required by this Agreement
to execute instruments to release property from the terms of the Trust Agreement
or the Indenture, as applicable, or convey the Issuer's or the Indenture
Trustee's interests in the same, the Issuer or the Indenture Trustee, as
applicable, shall do so in a manner and under circumstances that are not
inconsistent with the provisions of this Agreement. No Person relying upon any
instrument executed by the Issuer or the Indenture Trustee shall be bound to
ascertain the Issuer's or the Indenture Trustee's authority in connection
therewith, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
(c) If from time to time the Master Servicer shall deliver to the Custodian
copies of any written assurance, assumption agreement or substitution agreement
or other similar agreement pursuant to Section 3.07, the Custodian shall check
that each of such documents purports to be an original executed copy or, if the
original executed copy has been submitted for recordation and has not yet been
returned, a copy of the original executed document; and if so, shall file such
documents, and upon receipt of the original executed copy from the applicable
recording office or receipt of a copy thereof certified by the applicable
recording office, shall file such originals or certified copies in the related
Mortgage File. If any such documents submitted by the Master Servicer shall not
meet the above qualifications, then the Custodian shall promptly give the Master
Servicer written notice of such occurrence or return such documents to the
Master Servicer, with a direction to the Master Servicer to forward the correct
documentation.
(d) Upon receipt of two copies of a Request for Release from the Master
Servicer, substantially in the form of Exhibit D hereto, to the effect that a
Mortgage Loan has been the subject of a final payment or a prepayment in full
and has been terminated or that substantially all Liquidation Proceeds
determined by the Master Servicer in its reasonable judgment to be finally
recoverable have been recovered, and upon deposit into the Collection Account of
such final payment, prepayment in full or Liquidation Proceeds, the Custodian
shall promptly release the related Mortgage File to the Master Servicer, and the
Indenture Trustee shall execute the same, along with such documents as the
Master Servicer or the related Mortgagor may request to evidence satisfaction
and discharge of such Mortgage Loan. To the extent that (i) a Mortgage Loan has
been the subject of a final payment or a prepayment in full or substantially all
Liquidation Proceeds determined by the Master Servicer in its reasonable
judgment to be finally recoverable have been recovered, and a deposit into the
Collection Account of such final payment, prepayment in full or Liquidation
Proceeds has been made, and (ii) the Custodian and the Indenture Trustee have
not received a Request for Release from the Master Servicer within a reasonable
period of time following the occurrence of the events described in clause (i),
the Indenture Trustee may prepare and deliver to the Custodian a Request for
Release in duplicate whereupon the Custodian shall promptly release the related
Mortgage File to the Master Servicer in the manner described in the preceding
sentence.
Section 3.10. SERVICING FEE; PAYMENT OF CERTAIN EXPENSES BY MASTER
SERVICER. The Master Servicer shall be entitled to receive the Servicing Fee in
accordance with Section 3.04(d) as compensation for its services in connection
with servicing the Mortgage Loans. Moreover, additional servicing compensation
in the form of late payment charges and other receipts not required to be
deposited into the Collection Account as specified in Section 5.02 may be
retained by the Master Servicer. The Master Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including payment of all fees and expenses not expressly stated hereunder to be
for the account of the Securityholders, and shall not be entitled to
reimbursement therefor. The Issuer shall pay the initial fees and expenses of
the Indenture Trustee from the proceeds of the Notes.
Section 3.11. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE
MORTGAGE LOANS. Whenever required by statute or regulation, the Master Servicer
shall provide each Securityholder or any regulator therefor, the Indenture
Trustee with reasonable access to all documentation relating to the Mortgage
Loans, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Master Servicer
or any Subservicer. Nothing in this Section shall limit the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding Mortgagors, and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
Section 3.12. RESERVED.
Section 3.13. RECORDATION OF ASSIGNMENTS. (a) With respect to each MERS
Mortgage Loan, on or before the 10th Business Day after the Closing Date, the
Master Servicer will cause MERS's records to reflect the Trust as owner of such
Mortgage Loans.
(b) In the case of any Non-MERS Mortgage Loan, the original assignment of
Mortgage, in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect the conveyance of
the Mortgage Loan to the Trustee or in blank, which may be in the form of one or
more "blanket" assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction, shall be recorded by the Master
Servicer, at the expense of the Seller, upon the earlier to occur of (i) the
occurrence and continuation of any Event of Default or (ii) a bankruptcy or
insolvency proceeding involving the Mortgagor is initiated or foreclosure
proceedings are initiated against the Mortgaged Property as a consequence of an
event of default under the Mortgage Loan. While such assignment is being
recorded, the Custodian shall retain a photocopy thereof. If any assignment is
lost or returned unrecorded to the Custodian because of any defect therein, the
Master Servicer shall prepare at its expense a substitute assignment or cure
such defect, and the Master Servicer shall cause such assignment to be recorded
in accordance with this Section.
Section 3.14. ANNUAL STATEMENT AS TO COMPLIANCE. The Master Servicer shall
deliver to the Issuer, the Indenture Trustee and each Rating Agency not later
than March 10 of each year, commencing in 2004, an Officer's Certificate stating
as to each signer thereof that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of its performance under this
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Master Servicer has
fulfilled all of its obligations under this Agreement throughout such year, or
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. The statement required pursuant to Section 3.15 shall accompany such
Officer's Certificate.
Section 3.15. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT. Not
later than March 10 of each year, commencing in 2004, the Master Servicer shall
deliver or cause to be delivered to the Issuer and the Indenture Trustee a
report, prepared by the Independent Accountants of the Master Servicer, stating
that such Independent Accountants (i) have conducted an examination of certain
documents and records of the Master Servicer (or an appropriate Affiliate
thereof) relating to the servicing of the mortgage loans being serviced by the
Master Servicer under servicing agreements similar to this Agreement (which
agreements shall be described in a schedule to such report) substantially as
required by the Uniform Single Attestation Program for Mortgage Bankers and (ii)
did not discover any exceptions or errors relating to the servicing activities
of the Master Servicer (including the servicing of Mortgage Loans subject to
this Agreement) that, in the opinion of such Independent Accountants, are
material, except for such exceptions as shall be set forth in such report. In
the event such firm requires the Indenture Trustee to agree to the procedures
performed by such firm, the Master Servicer shall direct the Indenture Trustee
in writing to so agree; it being understood and agreed that the Indenture
Trustee shall deliver such letter of agreement in conclusive reliance upon the
direction of the Master Servicer, and the Indenture Trustee need not make any
independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.
Section 3.16. XXXXXXXX-XXXXX. On or before March 10 of each year, the
Administrator shall deliver to the Master Servicer all filings it made (or will
make) for the Trust with the Commission with respect to the prior calendar year.
In addition, on or prior to the tenth day after a Form 8-K is filed, the
Administrator shall deliver a copy of it to the Master Servicer. On or before
March 10 of each year, the Administrator shall furnish to the Master Servicer a
certification with respect to any and all tasks performed by it and covered by
the certification to be provided by the Master Servicer in the form of Exhibit G
to this Agreement. On or before March 25 (or the previous Business Day if March
25 is not a Business Day) of each calendar year with respect to which a Form
10-K is required to be filed by the Trust, the Master Servicer shall deliver to
the Administrator a certification in the form of Exhibit G to this Agreement.
Section 3.17. INDEMNIFICATION; THIRD-PARTY CLAIMS. The Master Servicer
(solely for the purpose of this Section, the "Indemnifying Party") agrees to
indemnify and to hold each of the Depositor, the Issuer, the Owner Trustee and
the Indenture Trustee (solely for the purpose of this Section, the "Indemnified
Parties") harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Indemnified Parties may sustain in any way related to the
failure of the Indemnifying Party to perform its respective duties in compliance
with the terms of this Agreement. Each Indemnified Party and the Master Servicer
shall immediately notify the other Indemnified Parties if a claim is made by a
third party with respect to this Agreement, and the Master Servicer shall assume
the defense of such claim and pay all expenses in connection therewith,
including reasonable outside counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered into against the Indemnified
Parties in respect of such claim. The Indenture Trustee, shall, out of the
assets of the Trust Estate reimburse the Master Servicer in accordance with
Section 3.04(c) hereof for all amounts advanced by it pursuant to the preceding
sentence except where the claim relates directly to the failure of the Master
Servicer to service and administer the Mortgage Loans in compliance with the
terms of this Agreement; provided, however, that the Master Servicer's indemnity
hereunder shall not in any manner be conditioned on the availability of funds
for such reimbursement. If the Master Servicer is unable to pay any such amounts
owed to the Indenture Trustee, such amounts shall be paid to the Indenture
Trustee out of the Trust Estate pursuant to Section 3.05(a) of the Indenture.
Solely to the extent that the Holders of the Certificate fail to indemnify the
Owner Trustee as required by Section 7.02 of the Trust Agreement, the Master
Servicer shall undertake such indemnification in accordance with the terms of
Section 7.02 of the Trust Agreement.
Section 3.18. MAINTENANCE OF EXISTENCE AND LICENSES; MERGER OR
CONSOLIDATION OF THE MASTER SERVICER. The Master Servicer (or an appropriate
Affiliate thereof) shall keep in full force and effect its existence, rights and
franchises, shall obtain and preserve its qualification to do business in each
jurisdiction necessary to protect the validity and enforceability of this
Agreement or any Mortgage Loan and to perform its duties hereunder, and shall
otherwise operate its business so as to cause the representations and warranties
under Section 2.04 to be true and correct at all times.
Section 3.19. EXCLUDED AMOUNTS. Each of (1) the portion of the principal
balance of any HELOC attributable to Draws made subsequent to the end of the
Managed Amortization Period and (2) the portion of the principal balance of any
HELOC attributable to Draws for which the Variable Funding Note could not be
increased to compensate the Seller for the Draws (each, an "Excluded Amount")
shall not be transferred to the Trust, and the portion of the Principal
Collections and Interest Collections on such HELOC for each Collection Period
shall be allocated to the Excluded Amount pro rata between the Excluded Amount
and the Principal Balance of such HELOC in proportion to the respective amounts
outstanding as of the end of the calendar month preceding such Collection
Period.
ARTICLE IV
REPORT TO NOTEHOLDERS
Section 4.01. REPORT TO NOTEHOLDERS. With respect to each Payment Date, no
later than the fifteenth (15th) calendar day of each month (or if such day is
not a Business Day, the following Business Day), the Master Servicer shall
forward the Loan Level Data Report to the Depositor and the Indenture Trustee.
Based primarily on the information in the Loan Level Data Report, the Indenture
Trustee shall prepare the Report to Noteholders with respect to each Payment
Date. The Indenture Trustee, pursuant to Section 3.25 of the Indenture, shall
make available to each Securityholder, the Owner Trustee, each Paying Agent (if
other than the Indenture Trustee) and each Rating Agency, the Report to
Noteholders setting forth the following information, to the extent applicable:
(a) the aggregate amount of Collections received on the Mortgage Loans
during the related Collection Period;
(b) the aggregate amount of (i) Interest Collections and (ii) Principal
Collections and, in the case of the Managed Amortization Period, Net Principal
Collections (in each case stated separately for each Group, for each collateral
type (I.E., HEL, HLTV and HELOC) and in the aggregate) for such Collection
Period;
(c) the Principal Collection Distribution Amount for such Collection
Period;
(d) the amount distributable to each Class of Offered Notes and the
Variable Funding Notes in respect of interest;
(e) the amount of any Interest Carry-Forward Amounts;
(f) the amount, if any, to be distributed to the Certificateholders;
(g) any accrued and unpaid Servicing Fees for previous Collection Periods
and the Servicing Fee for such Collection Period;
(h) the Excess Spread, if any, for such Collection Period (stated
separately for each Group);
(i) the Liquidation Loss Amount and Principal Balance of Liquidated
Mortgage Loans (in each case stated separately for each Group, for each
collateral type and also in the aggregate) for (i) such Collection Period, (ii)
such Collection Period and the immediately preceding eleven Collection Periods
and (iii) such Collection Period and all previous Collection Periods and any
Overcollateralization Increase Amounts and Overcollateralization Release Amounts
for such Collection Period;
(j) the aggregate Principal Balance of the Mortgage Loans (in each case
stated separately for each Group, for each collateral type and also in the
aggregate) as of the end of the preceding Collection Period and as of the end of
the second preceding Collection Period;
(k) the Offered Note Balance and the Variable Funding Balance for each
Class of Notes after giving effect to any distribution on such Payment Date and
to any reduction on account of Liquidation Loss Amounts;
(l) the Overcollateralization Amount and the Overcollateralization Target
Amount and whether the Loss and Delinquency Test has not been satisfied;
(m) the number and aggregate Principal Balances of Mortgage Loans (in each
case stated separately for each Group, for each collateral type and also in the
aggregate) (i) as to which the related Monthly Payment is delinquent for 30-59
days, 60-89 days, 90-119 days, 120-149 days, 150-179 days and 180 days or more,
separately identifying for each bucket those Mortgage Loans in foreclosure,
those Mortgage Loans subject to bankruptcy proceedings, those Mortgage Loans
that have become related to REO Property and the remaining ("purely delinquent")
Mortgage Loans. Notwithstanding the foregoing, any Mortgage Loan as to which the
related Monthly Payment is delinquent for 180 days or more and which is treated
as a Liquidated Mortgage Loan for Trust reporting purposes shall not be
double-counted as a delinquent Mortgage Loan.
(n) prior to the end of the Managed Amortization Period, the aggregate
amount of Additional Balances, if any, (i) created and (ii) purchased during the
preceding Collection Period;
(o) whether an Amortization Event, specifying such event, has occurred
since the prior Determination Date;
(p) whether a Servicing Default has occurred since the prior Determination
Date, specifying such Servicing Default;
(q) the Net Loan Rate for the related Collection Period; and
(r) the number, Group, collateral type and Principal Balances of any
Mortgage Loans removed from the Trust.
The Indenture Trustee shall conclusively rely upon the information
contained in each Loan Level Data Report for purposes of making distributions
pursuant to Section 3.05 of the Indenture, shall have no duty to inquire into
such information and shall have no liability in so relying. The format and
content of the Loan Level Data Report and the Report to Noteholders may be
modified by the mutual agreement of the Master Servicer and the Indenture
Trustee. The Administrator shall give notice of any such change to each Rating
Agency.
The amounts furnished pursuant to clause (d) above shall be expressed as an
aggregate dollar amount per each Class of Offered Notes or Variable Funding
Notes, as the case may be, with a $1,000 denomination.
The Master Servicer shall forward to the Indenture Trustee any other
information reasonably requested by the Indenture Trustee to make distributions
pursuant to Section 3.05 of the Indenture. Prior to the close of business on the
Business Day next succeeding each Determination Date, the Master Servicer shall
furnish a written statement to the Paying Agent and the Indenture Trustee
setting forth the aggregate amounts required to be withdrawn from the Collection
Account. The determination by the Master Servicer of such amounts shall be
presumptively deemed to be correct for all purposes hereunder, and the Owner
Trustee and the Indenture Trustee shall be protected in relying upon the same
without any independent verification thereof. In addition, upon the Issuer's
written request, the Master Servicer shall promptly furnish information
reasonably requested by the Issuer that is reasonably available to the Master
Servicer to enable the Issuer to perform its federal and state income tax
reporting obligations.
ARTICLE V
THE ACCOUNTS
Section 5.01. ACCOUNTS. Prior to the Closing Date, the Master Servicer
shall establish or cause to be established the following accounts, each of which
shall be an Eligible Account:
(a) an account (the "Collection Account") bearing a designation clearly
indicating that the funds on deposit therein are held for the benefit of the
Issuer, the Indenture Trustee and the Securityholders; and
(b) an account in the name of the Indenture Trustee (the "Trustee
Collection Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Securityholders.
Section 5.02. COLLECTION ACCOUNT. The Master Servicer shall deposit or
cause to be deposited any amounts representing payments and collections in
respect of the Mortgage Loans received by it subsequent to the Cut-Off Date,
other than in respect of the payments referred to in the following paragraph,
into the Collection Account within two (2) Business Days following receipt
thereof (or otherwise on or prior to the Closing Date), including the following
payments and collections received or made by it:
(a) all payments of principal and interest in respect of the Mortgage Loans
received by the Master Servicer from the Mortgagors or the related Subservicer
(net of any portion of the interest thereof retained by such Subservicer as
subservicing fees);
(b) the aggregate Purchase Price or Repurchase Price of any Mortgage Loans
purchased by Seller or the Depositor pursuant to Sections 2.03 or 2.08;
(c) any Liquidation Proceeds and Insurance Proceeds;
(d) any Substitution Adjustment Amounts; and
(e) from the Master Servicer, any losses incurred upon Permitted
Investments of amounts deposited into the Collection Account;
provided, that with respect to each Collection Period, the Master Servicer shall
be permitted to retain from payments in respect of interest on the Mortgage
Loans, the Servicing Fee for such Collection Period and any prepayment
penalties, late fees and other similar fees.
The foregoing requirements respecting deposits into the Collection Account
are exclusive; provided, that without limiting the generality of the foregoing,
the Master Servicer need not deposit into the Collection Account any amounts
representing prepayment penalties or other ancillary servicing fees payable by
Mortgagors during a Collection Period such as late fees, assumption fees, other
administrative fees, release fees or bad check charges. In the event that any
amount not required to be deposited into the Collection Account is so deposited,
the Master Servicer may at any time withdraw such amount from the Collection
Account, any provision herein to the contrary notwithstanding. Notwithstanding
such commingling of funds, the Master Servicer shall keep records that
accurately reflect the funds on deposit in the Collection Account that have been
identified by it as being attributable to the Mortgage Loans and shall hold all
collections in the Collection Account to the extent they represent collections
on the Mortgage Loans for the benefit of the Issuer, the Indenture Trustee and
the Securityholders.
The Master Servicer shall direct in writing the institution maintaining the
Collection Account to invest funds therein only in Permitted Investments. No
Permitted Investment may be sold or disposed of at a gain prior to maturity,
unless the Master Servicer shall have obtained an Opinion of Counsel at the
Master Servicer's expense addressed to the Indenture Trustee that such sale or
disposition will not cause the Trust to be to be treated as an association (or a
publicly-traded partnership) taxable as a corporation for federal income tax
purposes. All net income, other than any gain from a sale or disposition of the
type referred to in the preceding sentence, received from any such Permitted
Investment shall be paid to the Master Servicer as additional servicing
compensation. The amount of any losses incurred in respect therewith shall be
deposited into the Collection Account by the Master Servicer out of its own
funds immediately as incurred.
The Master Servicer shall require each Subservicer to hold all funds
constituting collections on the Mortgage Loans, pending remittance thereof to
the Master Servicer, in one or more accounts meeting the requirements of an
Eligible Account (and amounts on deposit therein shall be invested in Permitted
Investments), unless all such collections are remitted on a daily basis to the
Master Servicer for deposit into the Collection Account.
The Collection Account may, upon written notice to the Issuer and the
Indenture Trustee, be transferred to a different institution, provided that such
transfer is to an Eligible Account.
On any Payment Date during the Managed Amortization Period with respect to
Mortgage Loans assigned to Group II, the Master Servicer shall withdraw from the
Collection Account and deliver to the Seller, as payment for Additional
Balances, the lesser of (i) the aggregate amount of Additional Balances created
during the related Collection Period and (ii) Principal Collections with respect
to Mortgage Loans assigned to Group II.
Section 5.03. TRUSTEE COLLECTION ACCOUNT. On each Master Servicer
Remittance Date, the Master Servicer shall transfer from the Collection Account
to the Trustee Collection Account the amount necessary for the Indenture Trustee
to make the required distributions pursuant to Section 3.05(a) of the Indenture.
Such requirement respecting deposits into the Trustee Collection Account is
exclusive. In the event that any amount not required to be deposited into the
Trustee Collection Account is so deposited, the Master Servicer may at any time
direct the Indenture Trustee to withdraw such amount from the Trustee Collection
Account and deliver it to or at the direction of Master Servicer, any provision
herein to the contrary notwithstanding.
The Indenture Trustee may, but need not, invest funds in the Trustee
Collection Account, and if such funds are invested, they shall be invested only
in Permitted Investments selected by the Indenture Trustee. No Permitted
Investment may be sold or disposed of at a gain prior to maturity, unless the
Indenture Trustee shall have obtained an Opinion of Counsel at the Indenture
Trustee's expense addressed to the Indenture Trustee that such sale or
disposition will not cause the Trust to be to be treated as an association (or a
publicly-traded partnership) taxable as a corporation for federal income tax
purposes. Except as otherwise agreed by the Indenture Trustee and the Depositor
in writing, all net income for the period from and including the Master Servicer
Remittance Date up to and excluding the day prior to the related Payment Date
shall be for the account of the Indenture Trustee and the remainder of the net
income on the funds in the Trustee Collection Account shall be for the account
of the Depositor. The amount of any losses incurred in respect therewith shall
be deposited into the Trustee Collection Account by the Indenture Trustee and/or
the Depositor out of their own funds immediately as incurred.
On the Closing Date the Depositor shall remit to the Indenture Trustee for
deposit in the Trustee Collection Account, or a subaccount of the Trustee
Collection Account created by the Indenture Trustee, an amount equal to
approximately $228,346 representing the excess of the aggregate principal
balance of the Mortgage Loans as of the statistical calculation date of August
8, 2003 over the aggregate Principal Balance of the Mortgage Loans as of the
Cut-Off Date. The principal amount deposited shall be paid on the first Payment
Date as principal to the Holders of the Offered Notes entitled to receive
principal on such Payment Date. In addition, following the Closing Date and
prior to the first Payment Date, the Depositor may also remit funds to the
Indenture Trustee for deposit in the Trustee Collection Account, or a subaccount
of the Trustee Collection Account created by the Indenture Trustee, if the
Depositor and the Indenture Trustee determine that without such remittance there
would be a shortfall in the amount on deposit in the Trustee Collection Account
available to be applied towards the payment of interest due on the Offered Notes
on the initial Payment Date. All net income on such deposits from the Closing
Date up to and not including the first Payment Date shall be for the account of
the Depositor.
ARTICLE VI
THE MASTER SERVICER
Section 6.01. LIABILITY OF THE MASTER SERVICER. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it hereunder.
Section 6.02. MERGER OR CONSOLIDATION OR ASSUMPTION OF THE OBLIGATIONS OF
THE MASTER SERVICER. Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be an established
mortgage loan servicing institution that has a net worth of at least
$15,000,000, and in all events shall be the successor of the Master Servicer,
without the execution or filing of any paper or any further action on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.
The Master Servicer shall send timely notice of any such merger or consolidation
to the Indenture Trustee.
The Master Servicer may assign its rights and delegate its duties and
obligations under this Agreement; provided, that the Person accepting such
assignment or delegation shall be a Person qualified to service the Mortgage
Loans, shall be satisfactory to the Issuer; and such person shall be willing to
service the Mortgage Loans and shall execute and deliver to the Indenture
Trustee and the Issuer an agreement, in form and substance reasonably
satisfactory to the Indenture Trustee and the Issuer, containing an assumption
by such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by the Master Servicer under
this Agreement; and provided further, that no Rating Agency, after notice
thereto, shall have notified the Indenture Trustee in writing that such
assignment and delegation would result in a Rating Event; and provided further,
that the Owner Trustee shall have received an Opinion of Counsel to the effect
that such assignment or delegation would not cause the Trust to be treated as an
association (or a publicly-traded partnership) taxable as a corporation for
federal income tax purposes.
Section 6.03. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS.
Neither the Master Servicer nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer, the Owner Trustee, the
Indenture Trustee or the Securityholders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement;
provided, that this provision shall not protect the Master Servicer or any such
Person against any liability that would otherwise be imposed on it by reason of
its willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder or by reason of its reckless disregard thereof. The Master
Servicer and any director, officer, employee or agent thereof may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Master Servicer and any
director, officer, employee or agent thereof shall be indemnified by the Issuer
and held harmless against any loss, liability or expense incurred in connection
with any Proceeding relating to this Agreement or the Securities, including any
amount paid to the Indenture Trustee pursuant to Section 6.06(b), other than any
loss, liability or expense incurred by reason of its willful misfeasance, bad
faith or gross negligence in the performance of its duties hereunder or by
reason of its reckless disregard thereof and shall be entitled to reimbursement
therefor pursuant to Section 3.05(a)(xiii) of the Indenture. The Master Servicer
shall be under no obligation to appear in, prosecute or defend any legal action
not incidental to its duties to service the Mortgage Loans in accordance with
this Agreement, and that in its opinion may involve it in any expense or
liability; provided, that the Master Servicer may in its sole discretion
undertake any action that it may deem necessary or desirable in respect of this
Agreement, the rights and duties of the parties hereto and the interests of the
Securityholders. In such event, the reasonable legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Issuer, and the Master Servicer shall be entitled to
reimbursement therefor pursuant to Section 3.05(a)(xiii) of the Indenture. The
Master Servicer's right to indemnity or reimbursement pursuant to this Section
shall survive any resignation or termination of the Master Servicer pursuant to
Section 6.04 or Article VII in respect to any losses, expenses, costs or
liabilities arising prior to such resignation or termination or from events that
occurred prior to such resignation or termination.
Section 6.04. MASTER SERVICER NOT TO RESIGN. Subject to the provisions of
Section 6.02, the Master Servicer shall not assign this Agreement or resign from
the obligations and duties hereby imposed upon it except (a) upon a
determination that the performance of its obligations or duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with other activities carried on by it or any Affiliate thereof,
the other activities of the Master Servicer so causing such a conflict being of
a type and nature carried on by the Master Servicer or such Affiliate at the
date of this Agreement or (b) upon the satisfaction of the following conditions:
(i) the Master Servicer shall have proposed a successor master servicer to the
Issuer and the Indenture Trustee in writing, and such proposed successor master
servicer shall be acceptable to the Issuer and the Indenture Trustee; and (ii)
each Rating Agency, after prior notice thereto, shall have delivered a letter to
the Issuer and the Indenture Trustee prior to the appointment of such proposed
successor master servicer stating that such proposed appointment would not
result in a Rating Event; provided, that no such resignation by the Master
Servicer shall become effective until such successor master servicer shall have
assumed the Master Servicer's responsibilities and obligations hereunder or the
Indenture Trustee shall have designated a successor master servicer in
accordance with Section 7.02. An Opinion of Counsel delivered to the Issuer and
the Indenture Trustee shall be required in connection with any such
determination permitting the resignation of the Master Servicer.
Section 6.05. DELEGATION OF DUTIES. In the ordinary course of its business,
the Master Servicer may at any time delegate any of its duties hereunder to any
Person (including any Affiliate of the Master Servicer), that agrees to conduct
such duties in accordance with standards comparable to those applicable to the
Master Servicer hereunder. Such delegation shall not relieve the Master Servicer
of liability or responsibility with respect to such duties, and shall not
constitute a resignation of the Master Servicer pursuant to Section 6.04.
Section 6.06. INDENTURE TRUSTEE FEES AND EXPENSES; INDEMNIFICATION.
(a) After the Closing Date, the Indenture Trustee and any co-trustee from
time to time shall be entitled to compensation in an amount equal to the
Indenture Trustee Fee payable to it on each Payment Date, together with the net
investment earnings on amounts on deposit in the Trustee Collection Account as
specified in Section 5.03, which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust,
for all services rendered by each of them in the execution of the trusts created
under the Indenture and in the exercise and performance of any of the powers and
duties under the Indenture of the Indenture Trustee and any such co-trustee. The
Indenture Trustee and any such co-trustee shall be entitled to payment or
reimbursement in accordance with Section 6.07 of the Indenture from amounts on
deposit in the Collection Account, upon request therefrom for all reasonable
expenses, disbursements and advances incurred or made by the Indenture Trustee
or any such co-trustee, respectively, in accordance with any of the provisions
of this Agreement or the other Basic Documents, except any such expenses,
disbursements or advances as may arise from the negligence, willful misfeasance
or bad faith of the Indenture Trustee or such co-trustee, as the case may be.
The Indenture Trustee shall be entitled to be reimbursed by the Master Servicer
(or, if the Master Servicer is unable to fulfill such obligation, in accordance
with Section 3.05(a) of the Indenture) for all costs associated with the
transfer of servicing from the Master Servicer to the Indenture Trustee,
including without limitation, any costs or expenses associated with the complete
transfer of all servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Indenture Trustee to correct any
errors or insufficiencies in the servicing data or otherwise to enable the
Indenture Trustee to service the Mortgage Loans properly and effectively. If the
Indenture Trustee or an Affiliate thereof becomes the successor Master Servicer,
any custody fees and expenses shall also be paid pursuant to Section 3.05(a) of
the Indenture.
(b) The Indenture Trustee shall be indemnified and held harmless by the
Master Servicer for any loss, liability or expense incurred without negligence,
bad faith or willful misconduct on the part of the Indenture Trustee, arising
out of or in connection with the performance of its duties under the Basic
Documents (but not with respect to the performance of any of its duties under
the Administration Agreement), including the costs and expenses (including
reasonable attorneys' fees and expenses) of defending the Indenture Trustee
against any claim in connection with the exercise or performance of any of its
powers or duties under any Basic Document; provided, that:
(i) with respect to any such claim, the Indenture Trustee shall have
given the Master Servicer written notice thereof promptly after the
Indenture Trustee shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Indenture
Trustee shall cooperate and consult fully with the Master Servicer in
preparing such defense; and
(iii) notwithstanding anything herein to the contrary, the Master
Servicer shall not be liable for the settlement of any claim by the
Indenture Trustee entered into without the prior written consent of the
Master Servicer.
No termination of this Agreement shall affect the obligations created
by this Section of the Master Servicer to indemnify the Indenture Trustee
under the conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided pursuant
to this paragraph shall not pertain to any loss, liability or expense of
the Indenture Trustee, including the costs and expenses of defending itself
against any claim, incurred in connection with (i) any actions taken by the
Indenture Trustee at the direction of the Securityholders pursuant to the
terms of the Basic Documents unless consented to by the Master Servicer
(whose consent shall not be unreasonably withheld) or (ii) any actions
taken by the Indenture Trustee in its capacity as administrator under the
Administration Agreement.
Section 6.07. INDEMNIFICATION OF OWNER TRUSTEE BY MASTER SERVICER. The
Owner Trustee and its successors, assigns, agents and servants (collectively the
"Indemnified Parties") shall be indemnified, defended and held harmless by the
Master Servicer for any liabilities, obligations, losses, damages, taxes,
claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable attorney's fees and expenses) of any kind
and nature whatsoever (collectively, "Expenses") that may at any time be imposed
on, incurred by, or asserted against the Owner Trustee or any Indemnified Party
in any way relating to or arising out of the Basic Documents, the Trust Estate
or the administration of the Trust Estate or the action or inaction of the Owner
Trustee, provided that:
(a) The Master Servicer shall not be liable for or required to indemnify an
Indemnified Party from and against Expenses arising or resulting from the Owner
Trustee's negligence with respect to the handling of funds, or gross negligence
with respect to any other acts, willful misconduct or bad faith, or as a result
of any inaccuracy of an express representation or warranty contained in Section
6.03 of the Trust Agreement;
(b) With respect to any such claim, the Indemnified Party shall have given
the Master Servicer written notice thereof promptly after the Indemnified Party
shall have actual knowledge thereof;
(c) While maintaining control over its own defense, the Indemnified Party
shall cooperate and consult fully with the Master Servicer in preparing such
defense;
(d) Notwithstanding anything to the contrary, the Master Servicer shall not
be liable for the settlement of any claim by an Indemnified Party entered into
without the prior written consent of the Master Servicer.
No termination of this Agreement shall affect the obligation created by
this Section of the Master Servicer to indemnify the Owner Trustee and the
Indemnified Parties under the conditions and to the extent set forth herein.
ARTICLE VII
DEFAULT
Section 7.01. DEFAULT. If any one of the following events (each, a
"Servicing Default") shall occur and be continuing:
(a) any failure by the Master Servicer to deposit into any Collection
Account or the Trustee Collection Account any deposit required to be made under
the terms of this Agreement that continues unremedied for a period of five (5)
Business Days after the date upon which written notice of such failure shall
have been given to the Master Servicer by the Issuer or the Indenture Trustee;
or
(b) any failure on the part of the Master Servicer to duly observe or
perform in any material respect any other covenants or agreements of the Master
Servicer set forth in this Agreement, which failure materially and adversely
affects the interests of any Securityholder, and which failure continues
unremedied for a period of 45 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Master Servicer by the Issuer or the Indenture Trustee; or
then, in the case of paragraphs (a) or (b), the Master Servicer shall
immediately notify the Indenture Trustee and the Owner Trustee in writing
thereof and, for so long as such Servicing Default shall not have been remedied
by the Master Servicer, then the Issuer or the Indenture Trustee may, by notice
then given in writing to the Master Servicer, terminate all rights and
obligations of the Master Servicer hereunder, other than the Master Servicer's
right to receive servicing compensation and reimbursement of expenses hereunder
during any period prior to the date of such termination, and the Indenture
Trustee, the Owner Trustee or the Issuer may exercise any and all other remedies
available at law or in equity. Any such notice to the Indenture Trustee shall
also be given to each Rating Agency and the Issuer. Subject to Section 7.02, on
or after receipt by the Master Servicer of such written notice in the case of
paragraphs (a) or (b), all authority and power of the Master Servicer under this
Agreement shall pass to and be vested in the Indenture Trustee as pledgee of the
Mortgage Loans pursuant to this Section. Without limitation, the Indenture
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the Master Servicer, as attorney in-fact or otherwise, any and all documents or
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination under
paragraphs (a) or (b), whether to complete the transfer and endorsement of each
Mortgage Loan or the related Mortgage Documents or Related Documents, or
otherwise. The Master Servicer agrees to cooperate fully with the Owner Trustee
and the Indenture Trustee, as the case may be, in effecting the termination
under paragraphs (a) or (b) of the rights and responsibilities of the Master
Servicer hereunder, including the transfer to the Indenture Trustee (or other
applicable successor) for the administration by it of all cash relating to the
Mortgage Loans that shall at the time be held by the Master Servicer for deposit
into the Collection Account, or that have been thereafter received by the Master
Servicer with respect to the Mortgage Loans. All reasonable costs and expenses
(including attorneys' fees) incurred in connection with amending this Agreement
to reflect such succession as Master Servicer pursuant to this Section shall be
paid by the predecessor Master Servicer (or if the predecessor Master Servicer
is the Indenture Trustee, the initial Master Servicer and, in any event, if the
initial Master Servicer cannot pay any such amount, in accordance with Section
3.05 of the Indenture) upon presentation of reasonable documentation of such
costs and expenses.
Notwithstanding any termination of the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to receive, out of any late
collection of a payment on a Mortgage Loan that was due prior to the notice
terminating the Master Servicer's rights and obligations hereunder and received
after such notice, that portion thereof to which the Master Servicer would have
been entitled hereunder, its Servicing Fee in respect thereof and any other
amounts payable to the Master Servicer hereunder the entitlement to which arose
prior to such termination.
Notwithstanding the foregoing, a delay in or failure of performance under
paragraph (a) or (b) above, after the expiration of the applicable grace
periods, shall not constitute a Servicing Default if such delay or failure could
not have been prevented by the exercise of reasonable diligence by the Master
Servicer and such delay or failure was caused by an Act of God, any act of the
public enemy, declared or undeclared war, public disorder, rebellion or
sabotage, or epidemic, landslide, lightning, fire, hurricane, earthquake or
flood. The preceding sentence shall not relieve the Master Servicer from using
reasonable efforts to perform its obligations hereunder in a timely manner in
accordance with the terms hereof, and the Master Servicer shall provide the
Owner Trustee, the Indenture Trustee and the Securityholders with notice of such
failure or delay by it, together with a description of its efforts to so perform
its obligations.
Section 7.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) Within 90 days after the date the Master Servicer and the Indenture
Trustee receive a notice of termination of the Master Servicer pursuant to
Section 7.01 or sends a resignation notice pursuant to Section 6.04, the
Indenture Trustee, as pledgee of the Mortgage Loans, shall be the successor in
all respects to the Master Servicer in its capacity as Master Servicer hereunder
and with respect to the transactions set forth herein, and shall be subject to
all responsibilities, duties and liabilities relating thereto placed on the
Master Servicer by the terms hereof provided, however, the Indenture Trustee
will use its reasonable best efforts to perform the duties of the Master
Servicer prior to the end of such 90-day period. Nothing in any Basic Document
shall be construed to permit or require the Indenture Trustee to (i) be
responsible or accountable for any act or omission of any prior Master Servicer
prior to the issuance of the related notice of termination hereunder, (ii) in
its capacity as successor Master Servicer, purchase, repurchase or substitute
any Mortgage Loan or fund any Additional Balances with respect thereto, (iii)
fund any losses on any Permitted Investment directed by any prior Master
Servicer hereunder or (iv) be responsible for the representations or warranties
of any such prior Master Servicer. As compensation therefor, the Indenture
Trustee shall be entitled to such compensation as the Master Servicer would have
been entitled to hereunder if no such notice of termination had been given. If
the Indenture Trustee is (i) unwilling to act as successor Master Servicer or
(ii) legally unable so to act, then the Indenture Trustee may appoint, or may
petition a court of competent jurisdiction to appoint any established mortgage
loan servicing institution having a net worth of not less than $10,000,000 as
the successor to the Master Servicer hereunder with respect to all or any part
of the Master Servicer's responsibilities, duties or liabilities hereunder;
provided, that no Rating Agency, after prior notice thereto, shall have notified
the Indenture Trustee in writing that the appointment of such successor Master
Servicer would result in a Rating Event. Notwithstanding the foregoing, pending
the appointment of a successor Master Servicer hereunder, unless the Indenture
Trustee is prohibited by law from so acting, the Indenture Trustee shall act in
such capacity as provided above. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation that the
Master Servicer would otherwise have received pursuant to Section 3.10 (or such
lesser compensation as the Indenture Trustee and such successor shall agree).
The appointment of a successor Master Servicer shall not affect any liability of
the predecessor Master Servicer that may have arisen under this Agreement prior
to its termination as Master Servicer, nor shall any successor Master Servicer
be liable for any acts or omissions of any predecessor Master Servicer or for
any breach by such Master Servicer of any of its representations or warranties
contained herein or in any other Basic Document. The Indenture Trustee and such
successor Master Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) Any successor Master Servicer, including the Indenture Trustee shall
not be deemed to be in default or to have breached its duties hereunder if the
predecessor Master Servicer shall fail to make any required deposit into the
Collection Account or otherwise cooperate with any required servicing transfer
or succession hereunder.
Section 7.03. NOTIFICATION TO SECURITYHOLDERS. Upon any termination of or
appointment of a successor Master Servicer hereunder, the Indenture Trustee
shall give prompt written notice thereof to the Issuer, the Indenture Trustee
and each Rating Agency.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. AMENDMENT. This Agreement may be amended from time to time by
the parties hereto to cure any ambiguity, correct or supplement any provision of
this Agreement that may be inconsistent with any other provision of this
Agreement, add any provision that provides additional rights to the
Certificateholders or Noteholders or ensure that the Trust is not classified as
an association (or a publicly traded partnership) taxable as a corporation for
federal income tax purposes; provided, that (A) (i) such amendment will not, in
the good faith judgment of the parties thereto, materially and adversely affect
the interest of any Certificateholder or Noteholder and (ii) an Opinion of
Counsel is delivered to the Indenture Trustee to the effect that such amendment
will not materially and adversely affect the interest of any Certificateholder
or Noteholder or (B) to the extent affected thereby, with the consent of the
Holders of Notes evidencing not less than a majority of the Note Balance of the
Notes and, to the extent affected thereby, the consent of the Holders of
Certificates evidencing not less than a majority of the Percentage Interests of
the Certificates for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Noteholders or the Certificateholders; provided
that no such amendment shall (a) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, collections of payments on Mortgage Loans
or distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (b) reduce the aforesaid percentage of
the Note Balance of the Notes and the Percentage Interests of the Certificates
required to consent to any such amendment, without the consent of the Holders of
all the outstanding Notes and Holders of all outstanding Certificates; and
provided further, that the Indenture Trustee shall consent thereto.
Promptly after the execution of any such amendment or consent, the Master
Servicer shall furnish written notification of the substance of such amendment
or consent to each Certificateholder and the Indenture Trustee. It shall not be
necessary for the consent of the Certificateholder or Noteholder pursuant to
this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of the
Certificateholder or Noteholders provided for in this Agreement or in any other
Basic Document) and of evidencing the authorization of the execution thereof by
the Certificateholder or Noteholders shall be subject to such reasonable
requirements as the Owner Trustee or Indenture Trustee may prescribe from time
to time.
Section 8.02. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT CONSIDERATION OF THE
CHOICE OF LAW PRINCIPLES THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 8.03. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered or mailed by certified mail, return receipt requested or by facsimile,
(a) if to the Depositor, to 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Asset Backed Securities Group; (b) if to the Master Servicer,
to 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx 00000, Attention: Xxxxx Xxxxxx, Esq.
and Xxxxxx Xxxxx (with a copy to Xxxxx Xxxxxx, Xxxx Xxxxxxx and Xxxx Xxxxxxx,
Esq. 00000 Xxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 94583); (c) if to
Xxxxx'x, to 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Home Mortgage Loan Monitoring Group; (d) if to Standard & Poor's, to 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance
Group and Structured Finance Residential Department; (e) if to the Owner
Trustee, to Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, Attention: Xxxxx Whole Loan Home Equity Trust 2003-C (with a copy to
each Rating Agency); (f) if to the Issuer, to c/o Wilmington Trust Company, as
Owner Trustee, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000-0000, Attention: Xxxxx Whole Loan Home Equity Trust 2003-C; (g)
if to the Indenture Trustee, to Xxxxx Fargo Bank Minnesota, N.A., 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (with a copy to the Indenture Trustee
at Xxxxx Fargo Bank Minnesota, N.A., Attn.: Corporate Trust, Sixth and
Marquette, Minneapolis, Minnesota 55479); and (h) as to each of the foregoing
Persons, at such other address or facsimile numbers as shall be designated by
such Person in a written notice to the other foregoing Persons.
Section 8.04. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement, and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the Securities
or the rights of the Securityholders.
Section 8.05. THIRD-PARTY BENEFICIARIES. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, the Securityholders, the
Owner Trustee, and their respective successors and permitted assigns. Except as
otherwise provided herein, no other Person shall have any right or obligation
hereunder.
Section 8.06. COUNTERPARTS. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all of which shall together constitute but one and the same instrument.
Section 8.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and in the Table of Contents are for convenience of
reference only and shall not affect the construction hereof.
Section 8.08. TERMINATION; CLEAN-UP CALL.
(a) The respective obligations and responsibilities of the parties hereto
shall terminate upon the last action required to be taken by the Issuer pursuant
to the Trust Agreement and by the Indenture Trustee pursuant to the Indenture,
following the earlier of (i) the date on or before which the Indenture or the
Trust Agreement is terminated; or (ii) the purchase by the Depositor or the
Master Servicer of all Mortgage Loans pursuant to paragraph (b) below.
(b) Subject to the provisions of paragraphs (d) and (e) below, Depositor,
or if the Depositor declines the Master Servicer with the permission of the
Depositor, shall have the right to purchase the Mortgage Loans and the Trust
Estate on any Payment Date on which the aggregate Principal Balance of the
Mortgage Loans (after applying payments received in the related Collection
Period) is less than 10% of the Initial Aggregate Principal Balance, at a price
equal to the lesser of (i) 100% of the aggregate unpaid Principal Balance of all
such remaining Mortgage Loans, plus accrued and unpaid interest thereon at the
weighted average of the Mortgage Interest Rates thereon up to the date preceding
the Payment Date on which such amounts are to be distributed to the
Securityholders (and any unpaid Servicing Fee shall be deemed to have been paid
at such time) and (ii) the fair market value of all such remaining Mortgage
Loans.
(c) Notwithstanding the provisions in paragraph (b) above, the Depositor or
the Master Servicer, as applicable, may not exercise the option in paragraph (b)
above unless the purchase price for the Mortgage Loans equals or exceeds the sum
of (i) all accrued and unpaid interest (including any Interest Carry-Forward
Amounts) on the Outstanding Classes of Notes, (ii) the outstanding Note Balances
of the Outstanding Class or Classes of Notes, including the adjusted issue
prices payable pursuant to the immediately following two sentences and (iii) any
unpaid amounts owed to the Indenture Trustee, the Owner Trustee and the
Administrator. If the Notes are redeemed prior to the Payment Date in February
2006, the Class A-IO Notes will be entitled to receive their adjusted issue
price, which will be equal to the present value of the remaining payments on the
Class A-IO Notes, using a discount rate equal to the discount rate reflected in
the price paid by the initial purchaser of the Class A-IO Notes on the Closing
Date. If the Depositor or the Master Servicer exercises any such right, the
Depositor or the Master Servicer, as applicable, shall deposit the amount
calculated above with the Indenture Trustee for distribution to the
Securityholders and, upon the receipt of such deposit, the Indenture Trustee or
the Custodian shall release the related Mortgage Files to the Depositor or the
Master Servicer, as applicable.
(d) The Master Servicer, at its expense, shall prepare and deliver to the
Indenture Trustee for execution at the time the Mortgage Loans are to be
released to the Depositor or the Master Servicer, appropriate documents
assigning each such Mortgage Loan from the Indenture Trustee or the Issuer to
the Depositor or the Master Servicer, as applicable.
Section 8.09. CERTAIN MATTERS AFFECTING THE INDENTURE TRUSTEE. For all
purposes of this Agreement, in the performance of any of its duties or in the
exercise of any of its powers hereunder (except in its capacity as successor
Servicer after a Servicer Default), the Indenture Trustee shall be subject to
and entitled to the benefits of Article VI of the Indenture.
Section 8.10. OWNER TRUSTEE NOT LIABLE FOR MORTGAGE DOCUMENTS OR RELATED
DOCUMENTS. The Owner Trustee makes no representations as to the validity or
sufficiency of this Agreement, any Basic Document, the Securities (other than
the signature of the Owner Trustee on the Certificate), or any Mortgage Document
or Related Document. The Owner Trustee shall at no time have any responsibility
or liability with respect to the sufficiency of the Trust Estate or its ability
to generate the payments to be distributed to the Securityholders, including the
compliance by the Depositor or the Seller with any representation or warranty
made in any Basic Document or the accuracy of any such representation or
warranty, or any action of the Paying Agent, the Certificate Paying Agent, the
Certificate Registrar or the Indenture Trustee taken in the name of the Owner
Trustee.
Section 8.11. LIMITATION OF LIABILITY OF OWNER TRUSTEE. Notwithstanding
anything contained herein to the contrary, this Agreement has been countersigned
by Wilmington Trust Company not in its individual capacity but solely in its
capacity as Owner Trustee, and in no event shall Wilmington Trust Company in its
individual capacity or any beneficial owner of the Issuer have any liability for
the representations, warranties, covenants, agreements or other obligations of
the Issuer hereunder, as to all of which recourse shall be had solely to the
assets of the Issuer. For all purposes of this Agreement, in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
Section 8.12. TAX TREATMENT OF SERVICING FEE AND OTHER AMOUNTS. The Master
Servicer covenants and agrees that it and its Affiliates will treat all
compensation derived by it or any of its Affiliates under this Agreement,
including, without limitation, the Servicing Fee, late payment charges and other
receipts not required to be deposited into the Collection Account as specified
in Section 5.02 and net income from Permitted Investments of funds in the
Collection Account, as compensation for services for all federal, state and
local income tax purposes. In addition, the Master Servicer covenants and agrees
that it and its Affiliates will treat, for all federal, state and local income
tax purposes, all amounts not provided for in this Agreement that are to be paid
to it or any of its Affiliates in respect of its activities as Master Servicer
or that are determined directly or indirectly by reference to payments on the
Mortgage Loans as compensation for services.
* * *
IN WITNESS WHEREOF, the Depositor, the Seller, the Master Servicer, the
Issuer and the Indenture Trustee have caused this Agreement to be duly executed
by their respective officers or representatives as of the date and year first
above written.
BEAR XXXXXXX ASSET BACKED SECURITIES, INC.,
as Depositor
By: /S/ XXXXXXXX xXXXXXXXX
Name: Xxxxxxxx Xxxxxxxxx
Title: Senior Managing Director
XXXXX UNION BANK AND TRUST COMPANY,
as Seller and as Master Servicer
By: /S/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Vice President, Home
Equity Lending
XXXXX WHOLE LOAN HOME EQUITY TRUST 2003-C,
as Issuer
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee
By: /S/ XXXXX X. XXXXXXX
Name: Xxxxx X. Xxxxxxx
Title: Senior Financial
Services Officer
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Indenture Trustee
By: /S/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Assistant Vice
President
EXHIBIT A
MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
EXHIBIT B
MORTGAGE LOAN SCHEDULE
EXHIBIT C
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PREMISES:
That Xxxxx Fargo Bank Minnesota, National Association, as indenture trustee
(the "Indenture Trustee") under the indenture dated as of August 1, 2003 (the
"Indenture"), between Xxxxx Whole Loan Home Equity Trust 2003-C and the
Indenture Trustee, a national banking association existing under the laws of the
United States of America and having its principal office located at Xxxxx Fargo
Center, Sixth and Marquette, Xxxxxxxxxxx, Xxxxxxxxx 00000, hath made,
constituted and appointed, and does by these presents make, constitute and
appoint Xxxxx Union Bank and Trust Company ("Xxxxx"), a bank organized and
existing under the laws of the State of Indiana, as Master Servicer under the
Sale and Servicing Agreement (defined below) and Xxxxx Home Equity Corporation,
an Indiana corporation, as initial subservicer thereunder, its true and lawful
attorney-in-fact, with full power and authority to sign, execute, acknowledge,
deliver, file for recordation and record any instrument on its behalf and to
perform such other act or acts as may be customarily and reasonably necessary
and appropriate to effectuate the following enumerated transactions in respect
of any of the Mortgage Loans or the related Mortgaged Properties, Mortgage
Documents or Related Documents, for which the undersigned is acting as Indenture
Trustee (whether the undersigned is named therein as mortgagee or beneficiary or
has become mortgagee by virtue of endorsement of related Mortgage Documents) and
for which Xxxxx is acting as Master Servicer pursuant to the sale and servicing
agreement dated as of August 1, 2003 (the "Sale and Servicing Agreement").
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in Appendix A to the Indenture.
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage Loan, where such
modification or re-recording is for the purpose of correcting the Mortgage
Loan to conform same to the original intent of the parties thereto or to
correct title errors discovered after such title insurance was issued and
such modification or re-recording, in either instance, does not adversely
affect the Lien of the Mortgage Loan as insured.
2. The subordination of the Lien of a Mortgage Loan to an easement in favor of
a public utility company or a government agency or unit with powers of
eminent domain; this paragraph shall include the execution of partial
satisfactions/releases, partial reconveyances or the execution of requests
to trustees to accomplish the same.
3. With respect to a Mortgage Loan, the foreclosure, the taking of a deed in
lieu of foreclosure, or the completion of judicial or non-judicial
foreclosure or termination, cancellation or rescission of any such
foreclosure, including any and all of the following acts:
a. the substitution of trustee(s) serving under a deed of trust, in
accordance with state law and such deed of trust;
b. statements of breach or non-performance;
c. notices of default;
d. cancellations/rescissions of notices of default and/or notices of
sale;
e. the taking of a deed in lieu of foreclosure; and
f. such other documents and actions as may be necessary under the terms
of the Mortgage Loan or state law to expeditiously complete such
transactions.
4. The conveyance of mortgaged properties to a mortgage insurer, or the
closing of the title to the property to be acquired as real estate owned,
or conveyance of title to real estate owned.
5. The completion of loan assumption agreements.
6. The full satisfaction and/or release of a Mortgage Loan or full
reconveyance upon payment and discharge of all sums secured thereby,
including cancellation of any related Mortgage Documents.
7. The assignment of any Mortgage Loan and the related Mortgage Documents in
connection with the repurchase of such Mortgage Loan.
8. The full assignment of a Mortgage Loan upon payment and discharge of all
sums secured thereby in conjunction with the refinancing thereof including,
without limitation, the endorsement of the related Mortgage Documents.
9. The subordination of the Lien of a Mortgage Loan, where such subordination
is in connection with any modification pursuant to Section 3.01(b) of the
Sale and Servicing Agreement, and the execution of partial satisfactions or
releases in connection with such Section.
10. The modification or re-recording of a Mortgage Loan, where such
modification or re-recording is for the purpose of any modification
pursuant to Section 3.03 of the Sale and Servicing Agreement.
11. Any other modification of the terms of a Mortgage Loan (including the
Mortgage Interest Rate thereon) made in accordance with the Sale and
Servicing Agreement.
The undersigned gives such attorneys-in-fact full power and authority to
execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by or
under this Limited Power of Attorney as fully as the undersigned might or could
do, and does hereby ratify and confirm to all that such attorneys-in-fact shall
lawfully do or cause to be done by authority hereof.
Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of Attorney, and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect has not been
revoked unless an instrument of revocation shall have been made in writing by
the undersigned.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its individual capacity but
solely as Indenture Trustee
By:______________________________________________________
Name:
Title:
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank Minnesota, National Association
0000 00xx Xxxxxx X.X.
Xxxxxxxxxxx, XX 00000-0000
Attn: Inventory Control
Re: Sale and Servicing Agreement dated as of August 1, 2003, among
Bear Xxxxxxx Asset Backed Securities, Inc., Xxxxx Union Bank and
Trust Company, Xxxxx Whole Loan Home Equity Trust 2003-C and
Xxxxx Fargo Bank Minnesota, NATIONAL ASSOCIATION
In connection with the administration of the Mortgage Loans held by you as
Indenture Trustee pursuant to the above-captioned Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.
MORTGAGE LOAN NUMBER:
MORTGAGOR NAME, ADDRESS & ZIP CODE:
Reason for Requesting Documents (check one):
_____ 1. Mortgage Paid in Full
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation (Repurchased, etc.)
_____ 5. Nonliquidation Reason:____________________________
Address to which Indenture Trustee should
Deliver the Mortgage File: ____________________________
____________________________
____________________________
By:___________________________________________
(authorized signer)
Issuer:_______________________________________
Address:______________________________________
______________________________________
Date:_________________________________________
Xxxxx Fargo Bank Minnesota, National Association
Please acknowledge the execution of the above request by your signature and date
below:
_________________________________________ ___________________
Signature Date
Documents returned to Indenture Trustee:
_________________________________________ ___________________
Indenture Trustee Date
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Securities Group
Xxxxx Union Bank and Trust Company
Xxxxx Funding Corp., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Re: XXXXX WHOLE LOAN HOME EQUITY TRUST 2003-C
The undersigned, a duly authorized representative of Xxxxx Fargo Bank
Minnesota, National Association, as Indenture Trustee (the "Indenture Trustee")
and pursuant to the Sale and Servicing Agreement dated as of August 1, 2003,
between Bear Xxxxxxx Asset Backed Securities, Inc. as Depositor of the Trust,
Xxxxx Union Bank and Trust Company as Seller and Master Servicer, the Xxxxx
Whole Loan Home Equity Trust 2003-C and the Indenture Trustee (hereinafter as
such agreement may have been, or may from time to time be, amended, supplemented
or otherwise modified, the "Sale and Servicing Agreement"), does hereby certify
as follows:
A. Capitalized terms used in this Certificate have their respective
meanings set forth in the Sale and Servicing Agreement. References herein to
certain subsections are references to the respective subsections of the Sale and
Servicing Agreement.
B. This Certificate is being delivered pursuant to Section 2.03.
C. The Undersigned is a Responsible Officer.
D. This Certificate is being delivered by the date specified in Section
2.03
E. Pursuant to and in accordance with the limitations set forth in Section
2.03, the Indenture Trustee hereby certifies and declares that, with noted
exceptions on attached schedule, (i) all documents required to be delivered
pursuant to Section 2.03 are in its possession, (ii) each such document has been
reviewed by it and has not been mutilated, damaged, torn, or otherwise
physically altered (handwritten additions, changes or corrections shall not
constitute physical alteration if initialed by the Mortgagor), appears regular
on its face and relates to such Mortgage Loan, and (iii) it has received a
Mortgage File containing the Mortgage and Mortgage Note or Loan Agreement, as
applicable, for each Mortgage Loan listed on the attached schedule.
IN WITNESS WHEREOF, the Indenture Trustee has caused this Certificate to be
duly executed this _____ day of ___________, 20__.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Indenture Trustee
By:______________________________________________________
Authorized Officer
EXHIBIT F
FORM OF FINAL CERTIFICATION OF TRUSTEE
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Securities Group
Xxxxx Union Bank and Trust Company
Xxxxx Funding Corp., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Re: XXXXX WHOLE LOAN HOME EQUITY TRUST 2003-C
The undersigned, a duly authorized representative of Xxxxx Fargo Bank
Minnesota, National Association, as Indenture Trustee (the "Indenture Trustee")
and pursuant to the Sale and Servicing Agreement dated as of August 1, 2003,
between Bear Xxxxxxx Asset Backed Securities, Inc. as Depositor of the Trust,
Xxxxx Union Bank and Trust Company as Seller and Master Servicer, the Xxxxx
Whole Loan Home Equity Trust 2003-C and the Indenture Trustee (hereinafter as
such agreement may have been, or may from time to time be, amended, supplemented
or otherwise modified, the "Sale and Servicing Agreement"), does hereby certify
as follows:
F. Capitalized terms used in this Certificate have their respective
meanings set forth in the Sale and Servicing Agreement. References herein to
certain subsections are references to the respective subsections of the Sale and
Servicing Agreement.
G. This Certificate is being delivered pursuant to Section 2.03.
H. The Undersigned is a Responsible Officer.
I. This Certificate is being delivered by the date specified in Section
2.03
J. Pursuant to and in accordance with the limitations set forth in Section
2.03, the Indenture Trustee hereby certifies and declares that, with the
exceptions noted on the attached schedule, that with respect to the Mortgage
Documents relating to each Mortgage Loan listed on the attached Mortgage Loan
Schedule to the Sale and Servicing Agreement, the following data elements on
such Mortgage Documents are the same as set forth on the Mortgage Loan Schedule
to the Sale and Servicing Agreement for such Mortgage Loan: (a) the Seller's
loan number, (b) the Mortgagor's name, (c) the address (including city and
state) of the related Mortgaged Property, (d) the original principal balance,
and (e) the maturity of the related Mortgage Note.
IN WITNESS WHEREOF, the Indenture Trustee has caused this Certificate
to be duly executed this _____ day of ___________, 20__.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Indenture Trustee
By:______________________________________________________
Authorized Officer
EXHIBIT G
FORM OF CERTIFICATION TO BE
PROVIDED BY THE MASTER SERVICER WITH FORM 10-K
Re: Xxxxx Whole Loan Home Equity Trust 2003-C
I, ____________, the [senior officer] of Xxxxx Union Bank and Trust Company
(the "Master Servicer") in charge of servicing, certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on Form
8-K containing distribution and servicing reports filed in respect of periods
included in the year covered by this annual report, for Xxxxx Whole Loan Home
Equity Trust 2003-C (the "Trust");
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the distribution information and the servicing
information required to be provided to the Indenture Trustee by the Master
Servicer under the Sale and Servicing Agreement is included in these reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer under the Sale and Servicing Agreement and based upon my knowledge and
the annual compliance review required under the Sale and Servicing Agreement,
and except as disclosed in the reports, the Master Servicer has fulfilled its
obligations under the Sale and Servicing Agreement; and
5. The reports disclose all significant deficiencies relating to the Master
Servicer's compliance with the minimum servicing standards based upon the report
provided by an independent public accountant, after conducting a review in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the Sale and Servicing Agreement that is
included in these reports.
Capitalized terms used but not defined herein have the meanings ascribed to
them in the Sale and Servicing Agreement, dated August 1, 2003 (the "Sale and
Servicing Agreement"), among Bear Xxxxxxx Asset Backed Securities, Inc., as
depositor, the Master Servicer, the Trust and Xxxxx Fargo Bank Minnesota,
National Association, as indenture trustee (the "Indenture Trustee").
[In giving the certifications above, I have reasonably relied on
information provided by the following unaffiliated third parties: Bear Xxxxxxx
Asset Backed Securities, Inc., and Xxxxx Fargo Bank Minnesota, National
Association.]
XXXXX UNION BANK AND TRUST
COMPANY
By:____________________________________
Name:__________________________________
Title:_________________________________
