Exhibit 99.10
EXECUTION COPY
AGREEMENT
(COMPLIANCE WITH REGULATION AB)
This Agreement (the "Agreement"), dated as of April 17, 2006, is by
and between Wachovia Bank, National Association, having an office at 000
Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (the "Purchaser") and
National City Mortgage Co., an Ohio corporation (the "Company").
WHEREAS, the Purchaser and the Company are parties to that certain
Mortgage Loan Seller/Servicer Agreement dated November 16, 1996 (as amended
from time to time, the "Prior Agreement") relating to the purchase and
servicing of certain residential mortgage loans; and
WHEREAS, the Purchaser and the Company anticipate entering into a
Master Purchase and Servicing Agreement (the "Future Agreement") to govern
the purchase and servicing of certain residential mortgage loans; and
WHEREAS, the Purchaser and the Company desire to adopt this Agreement
to prescribe their respective rights and responsibilities relating to
Regulation AB with respect to the mortgage loans (the "Mortgage Loans")
purchased and/or serviced pursuant to the Prior Agreement or the Future
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and reasonable consideration, the receipt and
adequacy of which is hereby acknowledged, the Purchaser and Company hereby
agree as follows:
Section 1.01. Intent of the Parties.
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The Purchaser and the Company acknowledge and agree that the purpose of
this Agreement is to facilitate compliance by the Purchaser and any Depositor
with the provisions of Regulation AB and related rules and regulations of the
Commission. Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
provisions of Securities Act, the Exchange Act and the rules and regulations of
the Commission thereunder that are applicable to any Securitization Transaction.
The Company acknowledges that interpretations of the requirements of Regulation
AB may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to negotiate in
good faith with the Purchaser or any Depositor, upon a request made in good
faith, regarding the Company's delivery of information under these provisions on
the basis of evolving interpretations of Regulation AB. In connection with any
Securitization Transaction, the Company shall cooperate as set forth herein with
the Purchaser to deliver to the Purchaser (including any of its assignees or
designees) and any Depositor, any and all statements, reports, certifications,
records and any other information necessary in the good faith determination of
the Purchaser or any Depositor to permit the Purchaser or such Depositor to
comply with the provisions of Regulation AB, together with such disclosures
relating to the Company, any Subservicer, any Third-Party Originator and the
Mortgage Loans, or the servicing of the Mortgage Loans, reasonably believed by
the Purchaser or any Depositor to be necessary in order to effect such
compliance.
Section 1.02. Additional Representations and Warranties of the Company.
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(a) The Company shall be deemed to represent to the Purchaser and to any
Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Section 1.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date and unless
otherwise disclosed in such information provided under Section 1.03: (i) the
Company is not aware and has not received notice that any default, early
amortization or other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Company; (ii) the Company
has not been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger; (iii) no material noncompliance with the
applicable servicing criteria with respect to other securitizations of
residential mortgage loans involving the Company as servicer has been disclosed
or reported by the Company; (iv) no material changes to the Company's policies
or procedures with respect to the servicing function it will perform under this
Agreement and any Reconstitution Agreement for mortgage loans of a type similar
to the Mortgage Loans have occurred during the three-year period immediately
preceding the scheduled closing date of the related Securitization Transaction;
(v) there are no aspects of the Company's financial condition that could have a
material adverse effect on the performance by the Company of its servicing
obligations under this Agreement or any Reconstitution Agreement; (v) there are
no material legal or governmental proceedings pending (or known by Company to be
contemplated) against the Company, or to the knowledge of the Company, any
Subservicer or any Third-Party Originator; and (vi) there are no affiliations,
relationships or transactions relating to the Company, any Subservicer or any
Third-Party Originator with respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a type described in Item
1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date following
the date on which information is first provided to the Purchaser or any
Depositor under Section 1.03, the Company shall, as soon as practicable
following such request, confirm in writing the accuracy of the representations
and warranties set forth in paragraph (a) of this Section or, if any such
representation and warranty is not accurate as of the date of such request,
provide reasonably adequate disclosure of the pertinent facts, in writing, to
the requesting party.
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Section 1.03. Information to Be Provided by the Company.
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In connection with any Securitization Transaction the Company shall (i) as
promptly as practicable following request by the Purchaser or any Depositor,
provide to the Purchaser and such Depositor (or, as applicable, cause each
Third-Party Originator and each Subservicer to provide), in writing, or in a
mutually agreed upon electronic format, and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, the information and materials
specified in paragraphs (a), (b), (c) and (f) of this Section, and (ii) as
promptly as practicable following notice to or discovery by the Company, provide
to the Purchaser and any Depositor (in writing, or in a mutually agreed upon
electronic format, and in form and substance reasonably satisfactory to the
Purchaser and such Depositor) the information specified in paragraph (d) of this
Section.
(a) If so requested by the Purchaser or any Depositor, the Company shall
provide (or cause each Third-Party Originator or Subservicer, as applicable, to
provide) such information, as mutually agreed upon in good faith by the
Purchaser or any Depositor and the Company (or such Third-Party Originator or
Subservicer, as applicable), regarding (i) the Company, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, and (iii) as applicable,
each Subservicer, as is requested for the purpose of compliance with Items
1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB, to the extent applicable
to the Company, Third-Party Originator or Subservicer as originator or servicer
of the Mortgage Loans. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and how long
the originator has been engaged in originating residential mortgage loans,
which description shall include a discussion of the originator's experience
in originating mortgage loans of a similar type as the Mortgage Loans;
information regarding the size and composition of the originator's
origination portfolio; and information that may be material, as mutually
agreed upon in good faith by the Purchaser or any Depositor and the Company
(or such Third-Party Originator or Subservicer, as applicable) , to an
analysis of the performance of the Mortgage Loans, including the
originators' credit-granting or underwriting criteria for mortgage loans of
similar type(s) as the Mortgage Loans and such other information as the
Purchaser or any Depositor may reasonably request for the purpose of
compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental proceedings
pending (or known by Company to be contemplated) against the Company, or
known by the Company (after reasonable due diligence) to be pending or
contemplated against any Third-Party Originator or any Subservicer; and
(D) as promptly as practicable following notice to the Company, a
description of any affiliation or relationship between the Company, each
Third-Party Originator, each Subservicer and any of the following parties
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to a Securitization Transaction, as such parties are identified and noticed
to the Company by the Purchaser or any Depositor in writing in advance of
such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Company shall
provide (or, as applicable, cause each Third-Party Originator to provide) Static
Pool Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Company, if the Company is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall be
prepared by the Company (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3)
of Regulation AB. To the extent that there is reasonably available to the
Company (or Third-Party Originator) Static Pool Information with respect to more
than one mortgage loan type, the Purchaser or any Depositor shall be entitled to
specify whether some or all of such information shall be provided pursuant to
this paragraph. The content of such Static Pool Information may be in the form
customarily provided by the Company, and need not be customized for the
Purchaser or any Depositor. Such Static Pool Information for each vintage
origination year or prior securitized pool, as applicable, shall be presented in
increments no less frequently than quarterly over the life of the mortgage loans
included in the vintage origination year or prior securitized pool. The most
recent periodic increment must be as of a date no later than 135 days prior to
the date of the prospectus or other offering document in which the Static Pool
Information is to be included or incorporated by reference. The Static Pool
Information shall be provided in an electronic format that provides a permanent
record of the information provided, such as a portable document format (pdf)
file, or other such electronic format as mutually agreed upon by the Purchaser
or the Depositor and the Company, as applicable.
Promptly following notice or discovery of a material error in Static Pool
Information provided pursuant to the immediately preceding paragraph (including
an omission to include therein information required to be provided pursuant to
such paragraph), the Company shall provide corrected Static Pool Information to
the Purchaser or any Depositor, as applicable, in the same format in which
Static pool Information was previously provided to such party by the Company.
If so requested by the Purchaser or any Depositor, the Company shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the Purchaser or Depositor, as applicable (to the extent of any
additional incremental expense associated with delivery pursuant to this
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Agreement), such agreed-upon procedures letters of certified public accountants
reasonably acceptable to the Purchaser or Depositor, as applicable, pertaining
to Static Pool Information relating to prior securitized pools for
securitizations closed on or after January 1, 2006 or, in the case of Static
Pool Information with respect to the Company's or Third-Party Originator's
originations or purchases, to calendar months commencing January 1, 2006, as the
Purchaser or such Depositor shall reasonably request. Such statements and
letters shall be addressed to and be for the benefit of such parties as the
Purchaser or such Depositor shall designate, which may include, by way of
example, any Sponsor, any Depositor and any broker dealer acting as underwriter,
placement agent or initial purchaser with respect to a Securitization
Transaction, and shall also be addressed to and for the benefit of the Company
and such Third-Party Originator; provided, however, that the procedures and work
to be performed by such certified public accountants shall not create an undue
disruption or burden on the business operations of the Company. Any such
statement or letter may take the form of a standard, generally applicable
document accompanied by a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor.
(c) If so requested by the Purchaser or any Depositor, the Company shall
provide such information regarding the Company, as servicer of the Mortgage
Loans, and cause each Subservicer to so provide such information (each of the
Company and each Subservicer, for purposes of this paragraph, a "Servicer"), as
is requested for the purpose of compliance with Item 1108 of Regulation AB. Such
information shall include, at a minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer's
experience in servicing assets of any type as well as a more detailed
discussion of the Servicer's experience in, and procedures for, the
servicing function it will perform under this Agreement and any
Reconstitution Agreements; information regarding the size, composition and
growth of the Servicer's portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the
Servicer that may be material, in the good faith mutual judgment of the
Company and the Purchaser or any Depositor, to any analysis of the
servicing of the Mortgage Loans or the related asset-backed securities, as
applicable, including, without limitation:
(1) whether any prior securitizations of mortgage loans of a type
similar to the Mortgage Loans involving the Servicer have defaulted or
experienced an early amortization or other performance triggering
event because of servicing during the three-year period immediately
preceding the scheduled closing date of the related Securitization
Transaction;
(2) the extent of outsourcing the Servicer utilizes;
(3) whether there has been previous disclosure of material
noncompliance with the applicable servicing criteria with respect to
other securitizations of residential mortgage loans involving the
Servicer as a servicer during the three-year period immediately
preceding the scheduled closing date of the related Securitization
Transaction;
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(4) whether the Servicer has been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing
default or to application of a servicing performance test or trigger;
and
(5) such other information as the Purchaser or any Depositor may
reasonably request for the purpose of compliance with Item 1108(b)(2)
of Regulation AB;
(C) a description of any material changes during the three-year period
immediately preceding the scheduled closing date of the related
Securitization Transaction to the Servicer's policies or procedures with
respect to the servicing function it will perform under this Agreement and
any Reconstitution Agreements for mortgage loans of a type similar to the
Mortgage Loans;
(D) information regarding the Servicer's financial condition, to the
extent that there is a material risk that the effect on one or more aspects
of servicing resulting from such financial condition would have a material
impact on the performance by the Company of its servicing obligations under
this Agreement or any Reconstitution Agreement;
(E) information regarding advances made by the Servicer on the
Mortgage Loans and the Servicer's overall servicing portfolio of
residential mortgage loans for the three-year period immediately preceding
the scheduled closing date of the related Securitization Transaction, which
may be limited to a statement by an authorized officer of the Servicer to
the effect that the Servicer has made all advances required to be made on
residential mortgage loans serviced by it during such period, or, if such
statement would not be accurate, information regarding the percentage and
type of advances not made as required, and the reasons for such failure to
advance;
(F) a description of the Servicer's processes and procedures (if any)
designed to address any special or unique factors involved in servicing
loans of a similar type as the Mortgage Loans;
(G) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as through
liquidation of mortgaged properties, sale of defaulted mortgage loans or
workouts; and
(H) information as to how the Servicer defines or determines
delinquencies and charge-offs, including the effect of any grace period,
re-aging, restructuring, partial payments considered current or other
practices with respect to delinquency and loss experience.
(d) If so requested by the Purchaser or any Depositor for the purpose of
satisfying its reporting obligation under the Exchange Act with respect to any
class of asset-backed securities, the Company shall upon discovery (or shall
cause each Subservicer and Third-Party Originator upon discovery to) (i) notify
the Purchaser and any Depositor in writing of (A) any material litigation or
governmental proceedings pending against the Company, any Subservicer or any
Third-Party Originator, as applicable, and (B) any affiliations or relationships
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that develop following the closing date of a Securitization Transaction between
the Company, any Subservicer or any Third-Party Originator and any of the
parties specified in clause (D) of paragraph (a) of this Section (and any other
parties identified in writing by the requesting party) with respect to such
Securitization Transaction, and (ii) provide to the Purchaser and any Depositor
a description of such proceedings, affiliations or relationships.
(e) As a condition to the succession to the Company or any Subservicer as
servicer or subservicer under this Agreement or any Reconstitution Agreement by
any Person (i) into which the Company or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Company or
any Subservicer, the Company shall provide to the Purchaser and any Depositor,
at least five Business Days prior to the effective date of such succession or
appointment, (x) written notice to the Purchaser and any Depositor of such
succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, all information
reasonably requested by the Purchaser or any Depositor in order to comply with
its reporting obligation under Item 6.02 of Form 8-K with respect to the related
Securitization Transaction.
(f) In addition to such information as the Company, as servicer, is
obligated to provide pursuant to other provisions of this Agreement, if so
requested by the Purchaser or any Depositor, the Company shall provide such
information as is reasonably available to the Company regarding the performance
or servicing of the Mortgage Loans as is reasonably required to facilitate
preparation of distribution reports in accordance with Item 1121 of Regulation
AB. Such information shall be provided concurrently with the monthly reports
otherwise required to be delivered by the service under this Agreement,
commencing with the first such report due not less than ten Business Days
following such request.
Section 1.04. Servicer Compliance Statement.
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On or before March 1 of each calendar year, commencing in 2007, the Company
shall deliver to the Purchaser and any Depositor a statement of compliance
addressed to the Purchaser and such Depositor and signed by an authorized
officer of the Company, to the effect that (i) a review of the Company's
activities as servicer during the immediately preceding calendar year (or
applicable portion thereof) and of its performance under this Agreement and any
applicable Reconstitution Agreement during such period has been made under such
officer's supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Company has fulfilled all of its obligations under this
Agreement and any applicable Reconstitution Agreement in all material respects
throughout such calendar year (or applicable portion thereof) or, if there has
been a failure to fulfill any such obligation in any material respect,
specifically identifying each such failure known to such officer and the nature
and the status thereof.
Section 1.05. Report on Assessment of Compliance and Attestation.
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(a) On or before March 1 of each calendar year, commencing in 2007, the
Company shall:
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(i) deliver to the Purchaser and any Depositor a report (in form and
substance reasonably satisfactory to the Purchaser and such Depositor)
regarding the Company's assessment of compliance with the Servicing
Criteria during the immediately preceding calendar year, as required under
Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.
Such report shall be addressed to the Purchaser and such Depositor and
signed by an authorized officer of the Company, and shall address each of
the Servicing Criteria specified on a certification substantially in the
form of Exhibit B hereto delivered to the Purchaser concurrently with the
execution of this Agreement;
(ii) deliver to the Purchaser and any Depositor a report of a
registered public accounting firm reasonably acceptable to the Purchaser
and such Depositor that attests to, and reports on, the assessment of
compliance made by the Company and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3)
and 2-02(g) of Regulation S-X under the Securities Act and the Exchange
Act;
(iii) cause each Subservicer, and each Subcontractor determined by the
Company pursuant to Section 1.06(b) to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB, to deliver to
the Purchaser and any Depositor an assessment of compliance and
accountants' attestation as and when provided in paragraphs (a) and (b) of
this Section; and
(iv) deliver to the Purchaser, any Depositor and any other Person that
will be responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d) under the
Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) on
behalf of an asset-backed issuer with respect to a Securitization
Transaction a certification in the form attached hereto as Exhibit A;
provided that such certification delivered by the Company may not be filed
as an exhibit to, or included in, any offering document or registration
statement.
The Company acknowledges that the parties identified in clause (a)(iv) above may
rely on the certification provided by the Company pursuant to such clause in
signing a Sarbanes Certification and filing such with the Commission.
(b) Each assessment of compliance provided by a Subservicer pursuant to
Section 1.05(a)(i) shall address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit B hereto delivered to the
Purchaser concurrently with the execution of this Agreement or, in the case of a
Subservicer subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Subcontractor pursuant to
Section 1.05(a)(iii) need not address any elements of the Servicing Criteria
other than those specified by the Company pursuant to Section 1.06.
Section 1.06. Use of Subservicers and Subcontractors.
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The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company as servicer under
this Agreement or any Reconstitution Agreement unless the Company complies with
the provisions of paragraph (a) of this Section. The Company shall not hire or
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otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Company as servicer under this Agreement
or any Reconstitution Agreement unless the Company complies with the provisions
of paragraph (b) of this Section.
(a) It shall not be necessary for the Company to seek the consent of the
Purchaser or any Depositor to the utilization of any Subservicer. The Company
shall cause any Subservicer used by the Company (or by any Subservicer) for the
benefit of the Purchaser and any Depositor to comply with the provisions of this
Section and with Sections 1.02, 1.03(c) and (e), 1.04, 1.05 and 1.07 of this
Agreement to the same extent as if such Subservicer were the Company, and to
provide the information required with respect to such Subservicer under Section
1.03(d) of this Agreement. The Company shall be responsible for obtaining from
each Subservicer and delivering to the Purchaser and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under Section
1.04, any assessment of compliance and attestation required to be delivered by
such Subservicer under Section 1.05 and any certification required to be
delivered to the Person that will be responsible for signing the Sarbanes
Certification under Section 1.05 as and when required to be delivered.
(b) It shall not be necessary for the Company to seek the consent of the
Purchaser or any Depositor to the utilization of any Subcontractor. The Company
shall promptly upon request provide to the Purchaser and any Depositor (or any
designee of the Depositor, such as a master servicer or administrator) a written
description (in form and substance satisfactory to the Purchaser and such
Depositor) of the role and function of each Subcontractor utilized by the
Company or any Subservicer, specifying (i) the identity of each such
Subcontractor, (ii) which (if any) of such Subcontractors are "participating in
the servicing function" within the meaning of Item 1122 of Regulation AB, and
(iii) which elements of the Servicing Criteria will be addressed in assessments
of compliance provided by each Subcontractor identified pursuant to clause (ii)
of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 1.05 and 1.07 of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section 1.05,
in each case as and when required to be delivered.
Section 1.07. Indemnification; Remedies.
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(a) The Company shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution of
a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction; each broker dealer acting
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as underwriter, placement agent or initial purchaser, each Person who controls
any of such parties or the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees and agents of each of the foregoing
and of the Depositor, and shall hold each of them (each, an "Indemnified Party")
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs, fees
and expenses that any of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or alleged to
be contained in any information, report, certification, accountants' letter
or other material provided under this Agreement by or on behalf of the
Company, or provided under this Agreement by or on behalf of any
Subservicer, Subcontractor or Third-Party Originator (collectively, the
"Company Information"), or (B) the omission or alleged omission to state in
the Company Information a material fact required to be stated in the
Company Information or necessary in order to make the statements therein,
in the light of the circumstances under which they were provided, not
misleading; provided, by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to the Company Information
and not to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Company Information
or any portion thereof is presented together with or separately from such
other information;
(ii) any failure by the Company, any Subservicer, any Subcontractor or
any Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and as required
under this Agreement, including any failure by the Company to identify
pursuant to Section 1.06(b) any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB; or
(iii) any breach by the Company of a representation or warranty set
forth in Section 1.02(a) or in a writing furnished pursuant to Section
1.02(b) and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not cured by
such closing date, or any breach by the Company of a representation or
warranty in a writing furnished pursuant to Section 1.02(b) to the extent
made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause (a)(ii) of
this Section, the Company shall promptly reimburse the Purchaser, any Depositor,
as applicable, and each Person responsible for the preparation, execution or
filing of any report required to be filed with the Commission with respect to
such Securitization Transaction, or for execution of a certification pursuant to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such party
in order to obtain the information, report, certification, accountants' letter
or other material not delivered as required by the Company, any Subservicer, any
Subcontractor or any Third-Party Originator.
(b) Notification and Cooperation. The parties hereto further agree, and any
Indemnified Party not a party hereto is deemed to agree, as a condition to its
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reliance on such indemnification, that the Company's indemnification obligations
under this Section 1.07 are subject to the following terms and conditions:
(i) An Indemnified Party seeking indemnification hereunder shall give
written notice to the Company within a reasonable time after the
Indemnified Party receives notice or becomes aware of an indemnifiable
claim;
(ii) The Company shall undertake the defense of the action or claim
with counsel or other representatives of its own choosing and reasonably
acceptable to the Indemnified Party (which counsel shall not, except with
the consent of the Indemnified Party, be counsel to the Indemnifying
Party);
(iii) The Indemnified Party shall have the right to participate and
assist in, but not control, the defense of such claim and employ separate
counsel in any action or claim at the expense of the Indemnified Party
(i.e., at its own expense); and
(iv) The Company shall not settle or compromise any claim suit or
action against the Indemnified Party without the express prior written
consent of the Indemnified Party.
(c) Exclusive Remedy. Except for remedies under the Agreement and remedies
that cannot be waived as a matter of law and injunctive relief, the rights under
this Section 1.07 shall be the exclusive remedy for breaches of this Section
1.07(including any covenant, obligation, representation or warranty contained
herein or therein).
(d) Limitations. Notwithstanding anything in this Agreement to the
contrary, in no event shall the Company be obligated under this Section 1.07 to
indemnify an Indemnified Party otherwise entitled to indemnity hereunder in
respect of any indemnifiable claims or losses that result from the willful
misconduct, bad faith or negligent acts or omissions of the Indemnified Party.
Section 1.08. Responsible Officers. Any reference herein to the Company's
knowledge, discovery or awareness, or notice or identification to the Company,
or a request to the Company, shall be in each case be deemed to refer solely to
the knowledge or awareness of, or notice or identification to, or request of, a
Responsible Officer of the Company. "Responsible Officer" means any vice
president, any managing director, any director, any associate, any assistant
vice president, any assistant secretary, any assistant treasurer or any other
officer or employee of the Company customarily performing functions similar to
those performed by any of the above designated officers and also to whom, with
respect to a particular matter, such matter is referred because of such
officer's or employee's knowledge of and familiarity with the particular
subject.
Section 1.09. Defined Terms. Capitalized terms used but not defined herein
are presumed to be defined in the applicable Agreement.
Commission: The United States Securities and Exchange Commission.
Company Information: As defined in Section 1.07(a).
11
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Exchange Act. The Securities Exchange Act of 1934, as amended.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Company and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Company, in accordance with underwriting
guidelines designated by the Company ("Designated Guidelines") or guidelines
that do not vary materially from such Designated Guidelines; (ii) such Mortgage
Loans were in fact underwritten as described in clause (i) above and were
acquired by the Company within 180 days after origination; (iii) either (x) the
Designated Guidelines were, at the time such Mortgage Loans were originated,
used by the Company in origination of mortgage loans of the same type as the
Mortgage Loans for the Company's own account or (y) the Designated Guidelines
were, at the time such Mortgage Loans were underwritten, designated by the
Company on a consistent basis for use by lenders in originating mortgage loans
to be purchased by the Company; and (iv) the Company employed, at the time such
Mortgage Loans were acquired by the Company, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it purchased
mortgage loans properly applied the underwriting criteria designated by the
Company. For the avoidance of doubt, a "Qualified Correspondent" includes a
"table broker" or mortgage lender that originates loans underwritten and funded
by the Company or an Affiliate of the Company.
Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
Reconstitution Agreement: Any servicing agreement relating to a
Reconstitution.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction. Any transaction involving either (1) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.
12
Servicer: As defined in Section 1.03(c).
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete material functions identified in Item 1122(d) of
Regulation AB with respect to Mortgage Loans under the direction or authority of
the Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Company under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB; provided, however, that the term "Subservicer" shall
not include any master servicer or any special servicer engaged at the request
of a Depositor, Purchaser or investor in a Securitization Transaction, nor any
"back-up servicer" or trustee performing servicing functions on behalf of a
Securitization Transaction.
Third-Party Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Company and shall not include a
mortgage broker that does not fund loans.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans, other than a Securitization Transaction.
[Signatures Follow]
13
IN WITNESS WHEREOF, the Company and the Purchaser have caused their names
to be signed to this Agreement by their respective officers duly authorized as
of the date first above written.
WACHOVIA BANK, NATIONAL
ASSOCIATION (Purchaser)
By: _______________________________________
Name:
Title:
NATIONAL CITY MORTGAGE CO.
(Company)
By: _______________________________________
Name:
Title:
14
EXHIBIT A
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"), among
[IDENTIFY PARTIES] -
I, ________________________________, the _______________________ of [NAME
OF COMPANY], certify to [the Purchaser], [the Depositor], and the [Master
Servicer] [Securities Administrator] [Trustee], and their officers, with the
knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Company's compliance with the
applicable servicing criteria set forth in Item 1122(d) of Regulation AB
(the "Servicing Criteria"), provided in accordance with Rules 13a-18 and
15d-18 under Securities Exchange Act of 1934, as amended (the "Exchange
Act") and Item 1122 of Regulation AB (the "Servicing Assessment"), the
registered public accounting firm's attestation report provided in
accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section
1122(b) of Regulation AB (the "Attestation Report"), and all servicing
reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans by the Company during 200[ ] that were
delivered by the Company to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the
"Company Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, 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 the
light of the circumstances under which such statements were provided, not
misleading with respect to the period of time covered by the Company
Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
(4) I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations under
the Agreement; and
(5) The Compliance Statement required to be delivered by the Company
pursuant to this Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by each Subcontractor
"participating in the servicing function" pursuant to the Agreement, have
been provided to the [Depositor] [Master Servicer]. Any material instances
of noncompliance described in such reports have been disclosed to the
15
[Depositor] [Master Servicer]. Any material instance of noncompliance with
the Servicing Criteria has been disclosed in such reports.
Date: _________________________
By: ________________________________
Name:
Title:
16
EXHIBIT B
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name of
Subservicer] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
------------------------------------------------------------------------------------------ ----------------------
Applicable Servicing
Servicing Criteria Criteria
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
-------------------- --------------------------------------------------------------------- ----------------------
General Servicing Considerations
-------------------- ----------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance X
or other triggers and events of default in accordance with the
transaction agreements.
-------------------- ----------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
activities.
-------------------- ----------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain
a back-up servicer for the mortgage loans are maintained. X
-------------------- ----------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the X
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction
agreements.
-------------------- ----------------------
Cash Collection and Administration
-------------------- ----------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
days specified in the transaction agreements.
-------------------- ----------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to X
an investor are made only by authorized personnel.
-------------------- ----------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows X
or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
-------------------- ----------------------
The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g.,
with x respect to commingling of cash) as set forth in the
transaction
1122(d)(2)(iv) agreements.
-------------------- ----------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured X
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means
a foreign financial institution that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange Act.
-------------------- ----------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized X
access.
-------------------- ----------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all X
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
(A) are mathematically accurate; (B) were prepared within 30
calendar days after the bank statement cutoff date, or such other
number of days specified in the transaction agreements; (C) were
reviewed and approved by someone other than the person who prepared
the reconciliation; and (D) contain explanations for reconciling
items. These reconciling items are resolved within 90 calendar days
of their original identification, or such other number of days
specified in the transaction agreements.
-------------------- ----------------------
17
------------------------------------------------------------------------------------------ ----------------------
Applicable Servicing
Servicing Criteria Criteria
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
-------------------- --------------------------------------------------------------------- ----------------------
Investor Remittances and Reporting
-------------------- ----------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the X
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid
principal balance and number of mortgage loans serviced by the
Servicer.
-------------------- ----------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance X
with timeframes, distribution priority and other terms set forth in
the transaction agreements.
-------------------- ----------------------
Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of X
1122(d)(3)(iii) days specified in the transaction agreements.
-------------------- ----------------------
Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, or
custodial bank x
1122(d)(3)(iv) statements.
-------------------- ----------------------
Pool Asset Administration X
-------------------- ----------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as
required x by the transaction agreements or related
mortgage loan documents.
-------------------- ----------------------
Mortgage loan and related documents are safeguarded as required by X
1122(d)(4)(ii) the transaction agreements
-------------------- ----------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are X
made, reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.
-------------------- ----------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in X
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage
loan documents.
-------------------- ----------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the X
Servicer's records with respect to an obligor's unpaid principal
balance.
-------------------- ----------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's X
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with
the transaction agreements and related pool asset documents.
-------------------- ----------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, X
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements
established by the transaction agreements.
-------------------- ----------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during the X
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency
is deemed temporary (e.g., illness or unemployment).
-------------------- ----------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage loans X
with variable rates are computed based on the related mortgage loan
documents.
-------------------- ----------------------
18
------------------------------------------------------------------------------------------ ----------------------
Applicable Servicing
Servicing Criteria Criteria
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow X
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such other
number of days specified in the transaction agreements.
-------------------- ----------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance X
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such
other number of days specified in the transaction agreements.
-------------------- ----------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be X
made on behalf of an obligor are paid from the servicer's funds and
not charged to the obligor, unless the late payment was due to the
obligor's error or omission.
-------------------- ----------------------
Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records X
maintained by the servicer, or such other number of days
1122(d)(4)(xiii) specified in the transaction agreements.
-------------------- ----------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are X
recognized and recorded in accordance with the transaction
agreements.
-------------------- ----------------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, X
1122(d)(4)(xv) is maintained as set forth in the transaction agreements.
-------------------- ----------------------
-------------------- --------------------------------------------------------------------- ----------------------
[NAME OF COMPANY] [NAME OF SUBSERVICER]
Date: _________________________
By: ________________________________
Name:
Title:
19
