STANDARD TERMS to MASTER SERVICING AGREEMENT January 1, 2006 EDITION FREMONT MORTGAGE SECURITIES CORPORATION
Exhibit 4.2
STANDARD TERMS
to
January 1, 2006 EDITION
TABLE OF CONTENTS
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ARTICLE I |
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DEFINITIONS |
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Section 1.01. Definitions
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1 | |||
ARTICLE II |
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ASSIGNMENT OF MORTGAGE LOANS AND TRUST ESTATE; |
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DOCUMENTS TO BE DEPOSITED WITH THE TRUSTEE |
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Section 2.01. Trustee to Retain Possession of Documents |
6 | |||
Section 2.02. Trustee to Retain Possession of Certain Insurance Policies and Documents
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6 | |||
ARTICLE III |
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ADMINISTRATION AND SERVICING OF MORTGAGE LOANS |
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Section 3.01. General Duties of Master Servicer
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6 | |||
Section 3.02. Termination of Sales/Servicing Agreements
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7 | |||
Section 3.03. Enforcement of “Due-on-Sale” Clauses; Assumption Agreements
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8 | |||
Section 3.04. Release of Trustee Mortgage Loan Files
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8 | |||
Section 3.05. Documents, Records and Funds in Possession of Master Servicer to be
eld for Trustee
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10 | |||
Section 3.06. Modification of Requirements to Servicing Provisions of the
Sales/Servicing Agreement
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11 | |||
Section 3.07. Waiver by master Servicer of Certain Requirements in the
Sales/Servicing Agreement
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11 | |||
Section 3.08. Assignment of Sales/Servicing Agreements
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12 | |||
Section 3.09. Representations and Warranties
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12 | |||
Section 3.10. Closing Certificate and Opinion
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13 | |||
ARTICLE IV |
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INSURANCE AND BONDS |
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Section 4.01. Maintenance of Insurance and Collections Thereunder
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13 | |||
Section 4.02. Payment of Premiums
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14 | |||
Section 4.03. Presentment of Claims and Collection of Proceeds
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14 | |||
Section 4.04. Renewal of Primary Mortgage Insurance Policies
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15 | |||
ARTICLE V |
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ADVANCES BY MASTER SERVICER FOR P & I |
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ADVANCES, ATTORNEYS’ FEES AND OTHER COSTS |
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Section 5.01. Recoverable Advances
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15 | |||
Section 5.02. Non-Recoverable Advances
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16 | |||
ARTICLE VI |
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PAYMENTS BY MASTER SERVICER |
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Section 6.01. General
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16 | |||
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Section 6.02. Deposits Into Master Custodial P&I Account
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17 | |||
Section 6.03. Withdrawals From Master Custodial P&I Accounts
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17 | |||
Section 6.04. Payments for Additional Interest In Connection with Certain
Prepayments and Other Liquidations
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18 | |||
Section 6.05. Payments for the Repurchase of Loans
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19 | |||
Section 6.06. Payments for Losses due to Mortgagor Bankruptcies
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20 | |||
ARTICLE VII |
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COMPENSATION AND DISBURSEMENTS TO MASTER SERVICER |
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Section 7.01. Compensation to the Master Servicer
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20 | |||
Section 7.02. Authorized Disbursements from the Collateral Proceeds Account
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20 | |||
ARTICLE VIII |
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REPORTS AND CERTIFICATE TO TRUSTEE |
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Section 8.01. Monthly Reports to the Issuing Entity and Trustee
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21 | |||
Section 8.02. Annual Statement as to Compliance
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21 | |||
Section 8.03. Annual Reports to the Issuing Entity and Trustee
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22 | |||
Section 8.04. Commission Reporting
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23 | |||
ARTICLE IX |
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MERGER OR CONSOLIDATION OF MASTER SERVICER; RESIGNATION |
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Section 9.01. Merger or Consolidation
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31 | |||
Section 9.02. Assignment or Transfer of Master Servicing Agreement
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31 | |||
Section 9.03. Resignation of Master Servicer
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31 | |||
ARTICLE X |
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DEFAULT |
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Section 10.01. Events of Default by Master Servicer
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32 | |||
Section 10.02. Other Remedies of Trustee
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33 | |||
ARTICLE XI |
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DUTIES OF THE MASTER SERVICER |
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Section 11.01. General Bond Administration
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33 | |||
Section 11.02. REMIC Bond Administration
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35 | |||
Section 11.03. Additional Bond Administration Rights and Duties of Master Servicer
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36 | |||
Section 11.04. Additional Costs Payable by Master Servicer
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36 | |||
ARTICLE XII |
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MISCELLANEOUS |
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Section 12.01. No Assignment or Delegation of Duties by Master Servicer
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36 | |||
Section 12.02. Binding Nature of Agreement; Assignment
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37 | |||
Section 12.03. Entire Agreement
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37 | |||
Section 12.04. Amendments and Supplements
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37 | |||
Section 12.05. Controlling Law
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37 | |||
Section 12.06. Indulgences, No Waivers
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37 | |||
Section 12.07. Titles Not to Affect Interpretation
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38 | |||
Section 12.08. Attorney’s Fees
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38 | |||
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EXHIBITS
Exhibit A
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Monthly Bond Remittance Report | |
Exhibit B
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Relevant Servicing Criteria | |
Exhibit C
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Form 10-D, Form 8-K and Form 10-K Reporting Responsibility | |
Exhibit D
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Form of Additional Disclosure Notification | |
Exhibit E
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Form of Servicer Certification |
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RECITALS
A master servicer identified in the Master Servicing Agreement of which these Standard Terms
are a part (the “Master Servicer”) intends to act as “master servicer” on behalf of Fremont
Mortgage Securities Corporation (“FMSC”) for one or more Series of collateralized structured
securities (the “Securities”) pursuant to an indenture between FMSC or an owner trust created by it
(the “Issuing Entity”) and the trustee identified in such indenture (the “Trustee”). The
Securities are to be secured by mortgage loans that have been sold or pledged to the Issuing Entity
by FMSC (the “Mortgage Loans”). Collection of the scheduled principal and interest payments on the
Mortgage Loans, plus pass-through payments of prepayments and liquidation proceeds, will be paid to
the Trustee on behalf of the Issuing Entity for the payment of the principal and interest on the
Securities.
FMSC has entered into Sales/Servicing Agreements with various Servicers acceptable to the
Master Servicer and has assigned its interest in the Sales/Servicing Agreements either to the
Issuing Entity or to one of its subsidiaries, which, in turn, has assigned its interest to the
Issuing Entity. Under the terms of its Sales/Servicing Agreement, each Servicer has agreed to
service the mortgage loans sold by it to FMSC. To provide for the administration and servicing of
the Mortgage Loans that secure payment of the Securities, including the orderly and timely
collection of scheduled payments of principal and interest and the advance of such payments by the
Master Servicer to the extent recoverable from Liquidation Proceeds, Insurance Proceeds, or
subsequent payments by the Borrower, the Issuing Entity and FMSC, on behalf of itself or one of its
subsidiaries, have retained the Master Servicer to act as a “master servicer” for all Mortgage
Loans and to manage and supervise the administration and servicing of the Mortgage Loans by all
Servicers for the benefit of the Issuing Entity, FMSC, the Trustee and the Securityholders.
STANDARD TERMS
NOW THEREFORE, in consideration of the mutual covenants and obligations contained below and
for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the
Issuing Entity, FMSC and Master Servicer agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
The following terms shall have the meanings ascribed to them below, unless the context or use
otherwise clearly indicates another or different meaning and intent. Moreover, such meanings are
equally applicable to the singular and the plural forms of such terms, as the context may require.
Capitalized terms not otherwise defined in
these Standard Terms shall have the meanings ascribed to them in the Sales/Servicing
Agreement. (Copies of the Sales/Servicing Agreement are held by the Master Servicer and the
Issuing Entity at their respective places of business located at the addresses specified in the
Master Servicing Agreement.)
“Advance Claims Endorsement”: An endorsement to the Pool Insurance Policy which
obligates the Mortgage Insurer that issued such Pool Insurance Policy to advance delinquent
principal and interest installments on any Mortgage Loan.
“Collateral Proceeds Account”: A trust account established by the Trustee with a
bank, savings and loan association or other depository to which the Master Servicer shall remit
from time to time the funds the Master Servicer has collected and deposited in a Master Custodial
P&I Account in respect of the Mortgage Loans pledged to the Trustee as collateral for Securities.
“Event of Default”: As provided in Section 10.01 of these Standard Terms.
“FMSC”: Fremont Mortgage Securities Corporation, a Delaware corporation.
“FNMA Guidelines”: The guidelines contained in the FNMA Seller’s Guide and in the
FNMA Servicing Guide pertaining to one-to-four family, first-lien, conventional residential
mortgage loans, and such other rules, regulations and guidelines adopted by FNMA that establish
eligibility requirements for the purchase of conventional, residential mortgage loans by FNMA or
establish loan service requirements for mortgage loans purchased by FNMA, as amended or
supplemented from time to time.
“Indenture”: A trust indenture between the Trustee and the Issuing Entity under which
Securities are issued, as amended or supplemented from time to time.
“Issuing Entity”: An affiliate of FMSC which has issued Securities secured by
Mortgage Loans.
“Master Custodial P & I Account”: An account maintained by the Master Servicer
specifically for the collection from any Servicer of the payment of principal and interest on
mortgage loans purchased by FMSC.
“Master Servicer Remittance Date”: The date specified in the Master Servicing
Agreement, which is the day each month on which the Master Servicer will remit funds to the
Trustee.
“Master Servicer”: The Person designated and appointed by the Trustee to act as
“master servicer” pursuant to Sections 9.03 and 10.01 of these Standard Terms.
“Master Servicer Errors and Omissions Insurance Policy”: Insurance coverage in an
amount and otherwise in form and substance acceptable under FNMA guidelines, insuring the Master
Servicer as the named insured against liability for damages arising out of errors, omissions or
mistakes committed in the performance of the services and other obligations required of the Master
Servicer under its Master Servicing Agreement
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with the Issuing Entity and, unless waived by the Master Servicer, naming the Trustee as an
additional insured, containing a severability of interests provision, but no other exclusion or
other provision that would limit the liability of any insured to any other insured.
“Master Servicer Fidelity Bond”: A fidelity bond issued by an insurer and in form and
substance acceptable under FNMA Guidelines, under which such insurer (a) agrees to indemnify the
Master Servicer for all losses sustained as a result of any theft, embezzlement, fraud or other
dishonest act on the part of the Master Servicer’s directors, officers or employees, and (b)
provides for limits of liability under such bond for each director, officer or employee of not less
than an amount required by such guidelines.
“Master Servicing Agreement”: Each agreement between the Issuing Entity and the
Master Servicer under which the Master Servicer agrees to supervise the Servicers of the Mortgage
Loans and to assume certain other obligations in accordance with such agreement and the terms and
conditions of these Standard Terms, as supplemented and amended from time to time.
“Monthly Remittance Report”: The monthly report to be provided by the Master Servicer
to the Trustee pursuant to Section 8.01 of these Standard Terms, providing such information as is
set forth in Exhibit A.
“Monthly P & I Advance”: An advance of funds by the Master Servicer pursuant to the
Master Servicing Agreement or by any other institution pursuant to an Advance Claims Endorsement to
pay delinquent principal and interest installments (net of related servicing fees) on any Mortgage
Loan.
“Mortgage Loans”: The loans evidenced by the Notes and Security Instruments referred
to in the Mortgage Loan Schedule attached to the Indenture Supplement, respectively, which the
Issuing Entity has pledged to the Trustee as collateral for the Securities pursuant to the
Indenture.
“Mortgagor Bankruptcy Bond”: A surety bond, insurance policy, letter of credit or
other credit instrument, in form and substance satisfactory to the Issuing Entity and the Trustee,
issued by an insurance company, surety company, or by a bank, trust company, savings and loan
association or other financial institution acceptable to the Trustee providing coverage against
loss resulting from any order, decree or other action by a court in connection with a bankruptcy
proceeding that reduces the amount of indebtedness secured by any Security Instrument or the
interest rate of any Note.
“Non-Recoverable Advance”: As provided in Section 5.01(f) to these Standard Terms.
“Officer’s Certificate”: A certificate signed by a Servicing Officer.
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“Opinion of Counsel”: A written opinion of counsel to the Master Servicer, which
opinion is as to form and substance, and is issued by counsel, reasonably acceptable to the
Trustee.
“Purchase Price”: With respect to a Mortgage Loan purchased from the Trust Estate, an
amount equal to the unpaid Principal Balance of the Mortgage Loan plus thirty days interest thereon
at the Note Rate.
“Rating Agency”: The rating agency or rating agencies that rate the Securities at the
request of the Issuing Entity at the time of issuance of the Securities.
“Regulation AB”: Subpart 229.1100 — Asset Backed Securities (Regulation AB), 17
C.F.R. §§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 United States Securities and Exchange
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 United States Securities and Exchange
Commission, or as may be provided by the United States Securities and Exchange Commission or its
staff from time to time.
“Relevant Servicing Criteria”: The servicing criteria set forth in paragraph (d) of
Item 1122 of Regulation AB, as such may be amended from time to time, that are applicable to the
various parties, as set forth on Exhibit B attached hereto. For clarification purposes, multiple
parties can have responsibility for the same Relevant Servicing Criteria. With respect to a
Servicing Function Participant engaged by the Master Servicer, the trust administrator, or the
Trustee, the term “Relevant Servicing Criteria” may refer to a portion of the Relevant Servicing
Criteria applicable to such parties.
“REMIC Election”: An election to treat the collateral pledged to secure the
Securities as a real estate mortgage investment conduit (a “REMIC”) pursuant to Section 860D of the
Code.
“REMIC Pool”: The collateral pledged to secure the Securities as to which a REMIC
Election is made.
“Sales/Servicing Agreement”: Each of the several Sales/Servicing Agreements between a
Servicer and FMSC under which the Servicer has agreed to service certain Mortgage Loans, and in
case any of such Sales/Servicing Agreements is hereafter terminated, any substitute Sales/Servicing
Agreement between FMSC and a substitute servicer, together with all amendments or supplements to
the foregoing as may be entered into from time to time.
“Securities”: Obligations of the Issuing Entity secured by Mortgage Loans and issued
pursuant to the terms of an Indenture.
“Securityholder”: A Person whose name appears as the holder of Securities on the
register maintained by or for an Issuing Entity.
“Series Year”: The twelve month period following the date of the Master Servicing
Agreement and each anniversary thereof.
“Servicer”: The mortgage loan servicing company that has entered into a
Sales/Servicing Agreement with FMSC and is servicing Mortgage Loans, its successors and permitted
assigns, and any other Person that shall enter into a substitute Sales/Servicing Agreement with the
consent of the Master Servicer.
“Servicing Function Participant”: Any Sub-Servicer or Subcontractor of a Servicer,
the Master Servicer, the Trustee, the Custodian or the Trustee, respectively.
“Servicing Officer”: Any officer of the Master Servicer who is responsible for the
administration and supervision of servicing of the Mortgage Loans.
“Special Hazard Insurance Policy”: A casualty insurance policy, in form and substance
satisfactory to the Issuing Entity and the Trustee, insuring the Trustee
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against loss sustained by damage or destruction to Mortgaged Premises, which loss is not
insured by a Hazard Insurance Policy or Flood Insurance Policy (if any).
“Standard Terms to Master Servicing Agreement” or “Standard Terms”: These Standard
Terms and all exhibits, schedules and appendices hereto, as amended and supplemented from time to
time.
“Subcontractor”: Any vendor, subcontractor or other Person that is not responsible
for the overall servicing of Mortgage Loans but performs one or more discrete functions identified
in Item 1122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of
any Servicer (or a Sub-Servicer of any Servicer), the Master Servicer, the Trustee, the Custodian
or the Trustee.
“Sub-Servicer”: Any Person that services Mortgage Loans on behalf of a Servicer, and
is responsible for the performance (whether directly or through sub-servicers or Subcontractors) of
servicing functions required to be performed under this Agreement, any related Servicing Agreement
or any sub-servicing agreement that are identified in Item 1122(d) of Regulation AB.
“Trust Estate”: The corpus of the trust created by the Indenture consisting of (i)
the Mortgage Loans, excluding all payments of principal and interest due before the Cut-Off Date;
(ii) such funds as from time to time are held in the Collateral Proceeds Account; (iii) such funds
as from time to time are held in the Master Custodial P & I Account and the Custodial P & I
Accounts; (iv) the Mortgaged Premises that secure a Mortgage Loan which have been acquired by
foreclosure (of any type) or by deed-in-lieu of foreclosure; (v) any Insurance Proceeds or
Liquidation Proceeds to which the holder of any Mortgage Loan or the Trustee is entitled; (vi) all
right, title and interest of the Issuing Entity under the Master Servicing Agreement; (vii) all
rights of FMSC pursuant to the respective Sales/Servicing Agreements relative to the Servicers’
obligations with respect to the Mortgage Loans; and (viii) any other tangible or intangible
property, rights or benefits that were granted, assigned or conveyed to the Trustee under the
Indenture as collateral for the Securities.
“Trust Receipt”: As provided in Section 3.04(b) of these Standard Terms.
“Trustee”: The trustee acting as “trustee” for the Bondholders under the Indenture.
“Trustee Mortgage Loan File”: As provided in Section 2.01 of these Standard Terms.
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ARTICLE II
ASSIGNMENT OF MORTGAGE LOANS AND TRUST ESTATE;
DOCUMENTS TO BE DEPOSITED WITH THE TRUSTEE
DOCUMENTS TO BE DEPOSITED WITH THE TRUSTEE
Section 2.01. Trustee to Retain Possession of Documents.
Concurrently with the execution and delivery of the Master Servicing Agreement, the Issuing
Entity shall have pledged, transferred and assigned to the Trustee, as collateral for the payment
of principal and interest on the Securities, all right, title and interest of the Issuing Entity in
and to the Trust Estate. Prior to or contemporaneously with the execution of such Master Servicing
Agreement, the Issuing Entity shall have delivered or caused to be delivered to the Trustee or its
agent with respect to each Mortgage Loan certain documents and instruments as specified in Section
362 of the Sales/Servicing Agreement, which shall be referred to in these Standard Terms as the
“Trustee Mortgage Loan File.” The Trustee or its agent shall retain possession of these documents
and shall release them only under the circumstances specified herein.
Section 2.02. Trustee to Retain Possession of Certain Insurance Policies and
Documents.
The Trustee or its agent shall also retain possession and custody of the originals of any
Special Hazard Insurance Policy, any Pool Insurance Policy, any Mortgagor Bankruptcy Bond, and any
certificates of renewal as to the foregoing as may be issued from time to time as contemplated by
these Standard Terms. Until the Bonds have been paid in full and the Issuing Entity otherwise has
fulfilled its obligations under the Indenture, the Trustee or its agent shall also retain
possession and custody of each Trustee Mortgage Loan File in accordance with and subject to the
terms and conditions of the Indenture. The Master Servicer shall promptly deliver to the Trustee
or its agent upon the execution or receipt thereof, the originals of any Special Hazard Insurance
Policy, any Pool Insurance Policy, any Mortgagor Bankruptcy Bond, and any certificates of renewal
thereof, and such other documents or instruments that constitute portions of the Trustee Mortgage
Loan File that come into the possession of the Master Servicer from time to time.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. General Duties of Master Servicer.
For and on behalf of the Trustee, FMSC, and the Securityholders, the Master Servicer shall
supervise, administer, monitor and oversee the servicing of the Mortgage Loans by the Servicers and
the observance and performance by the Servicers of all services, duties, responsibilities and
obligations that are to be observed or performed by them under their respective Sales/Servicing
Agreements. Upon the request of a Servicer, the Master Servicer will not unreasonably withhold its
consent to the transfer
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of the servicing obligations from such Servicer to another Servicer, provided, however, that
the new Servicer executes a new Sales/Servicing Agreement whose servicing provisions are identical
to the previous Sales/Servicing Agreement, and the new Servicer has been approved by the Master
Servicer. Moreover, the Master Servicer agrees to maintain the Master Servicer Errors and
Omissions Policy and the Master Servicer Fidelity Bond in full force and effect throughout the term
of the Master Servicing Agreement.
During the term of the Master Servicing Agreement the Master Servicer shall consult fully with
each of the Servicers as may be necessary from time to time to perform and carry out the Master
Servicer’s obligations hereunder and receive, review and evaluate all reports, information and
other data that are provided to the Master Servicer by each Servicer and otherwise exercise
reasonable efforts to cause each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by it under its Sales/Servicing Agreement. If any Servicer
materially breaches or fails to perform or observe any material obligations or conditions of its
Sales/Servicing Agreement, the Master Servicer shall promptly deliver to the Trustee, FMSC and the
Issuing Entity an Officer’s Certificate certifying that such Servicer is in default and describing
the events and circumstances giving rise to the default and what action (if any) has been, or is to
be, taken by the Servicer to cure the default and setting forth what action (if any) that the
Master Servicer plans to take.
Section 3.02. Termination of Sales/Servicing Agreements.
If the Master Servicer or the Trustee terminates any Sales/Servicing Agreement with a
Servicer, the Master Servicer, at its election, shall enter into a substitute servicing agreement
with FMSC, or arrange for another mortgage loan service company acceptable to it to do so, under
which such mortgage loan service company or the Master Servicer, as the case may be, shall assume,
satisfy, perform and carry out all liabilities, duties, responsibilities and obligations that are
to be, or otherwise were to have been, satisfied, performed and carried out by the Servicer under
such terminated Sales/Servicing Agreement, regardless whether such liabilities, duties,
responsibilities or obligations shall have accrued before or after the termination of such
Sales/Servicing Agreement, including but not limited to, the Servicer’s obligations to purchase
certain Mortgage Loans and any other liabilities or obligations of the Servicer arising from any
breach by the Servicer of any representations and warranties contained in its Sales/Servicing
Agreement causing a material impairment in the value of such Mortgage Loans. If the Master
Servicer does not elect to enter into a substitute Sales/Servicing Agreement with FMSC, the Master
Servicer shall nevertheless assume, satisfy, perform and carry out all obligations which otherwise
were to have been satisfied, performed and carried out by the Servicer under such terminated
Sales/Servicing Agreement until a substitute mortgage loan service company has been appointed and
designated and a substitute Sales/Servicing Agreement has been entered into by FMSC and such
substitute Servicer.
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Section 3.03. Enforcement of “Due-on-Sale” Clauses; Assumption Agreements.
(a) Enforcement. Each Sales/Servicing Agreement requires the Servicer to enforce any
“due-on-sale clause” contained in any Note or Security Instrument to the extent that such
enforcement is permissible by law and governmental regulation and will not adversely affect or
jeopardize coverage under any Primary Mortgage Insurance Policy or any Pool Insurance Policy;
provided, however, that if the Servicer reasonably expects that the enforceability or legality of
the “due-on-sale clause” will be litigated, the Servicer shall promptly notify the Master Servicer
and each Mortgage Insurer and obtain their written approval before initiating any enforcement
proceedings. The Master Servicer shall grant such approval if, in its and its counsel’s reasonable
judgment, such enforcement is permissible by law and governmental regulation, will not adversely
affect or jeopardize coverage under any Primary Mortgage Insurance Policy or any Pool Insurance
Policy and will not result in advances by or other expenses to the Servicer or the Master Servicer
that are not recoverable from Liquidation Proceeds or Insurance Proceeds relating to the Mortgage
Loan.
(b) Assumptions. Subject to the limitation specified in Subsection 3.03(a) above and
to such other limitations or conditions in the related Sales/Servicing Agreement, whenever a
Mortgaged Premises is to be conveyed to a Person by a Borrower and the Person is to enter into an
assumption agreement or modification agreement or supplement to the Note or the Security Instrument
that requires the signature of the Trustee, or if an instrument of release signed by the Trustee is
required to release the Borrower from liability on the Mortgage Loan, the Master Servicer shall
obtain from the Servicer the assumption agreement with the Person to whom the Mortgage Premises is
to be conveyed and such modification agreement or supplement to the Note or the Security Instrument
or other instruments as are reasonable or necessary to carry out the terms of the Note or the
Security Instrument or otherwise to comply with any applicable laws regarding assumptions and/or
the transfer of the Mortgaged Premises to such Person, and deliver them to the Trustee for
signature with a letter explaining the nature of such documents and the reason or reasons why the
Trustee’s signature is required. With such letter, the Master Servicer shall also deliver to the
Trustee an Officer’s Certificate from the applicable Servicer as provided in Section 741 of the
Sales/Servicing Agreement. Upon the closing of the transactions contemplated by such documents,
the Master Servicer shall cause the fully executed and duly recorded (where appropriate) originals
of the assumption agreement, the release (if any) or the modification or supplement to the Note or
the Security Instrument to be delivered to the Trustee or its agent and deposited in the Trustee
Mortgage Loan File.
Section 3.04. Release of Trustee Mortgage Loan Files.
(a) Payments-in-Full. The Sales/Servicing Agreement requires that upon the
payment-in-full of any Mortgage Loan, the Servicer shall deposit the proceeds thereof in the
appropriate Custodial P & I Account maintained by the Servicer, and prepare and deliver to the
Master Servicer with respect to the Security Instrument which secures the Note, a request for
reconveyance, deed or conveyance or release or satisfaction of the
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Security Instrument or other appropriate instrument releasing the Mortgaged Premises from the
lien represented by the Security Instrument. Upon receipt of the certificate (RMIC Form 340) as
required by the Sales/Servicing Agreement, the Master Servicer shall deliver such certificate to
the Trustee, together with a certificate of a Servicing Officer setting forth the Master Servicer’s
recommendations as to what action should be taken by the Trustee in respect of such documents. In
the event the Trustee Mortgage Loan File with respect to such Mortgage Loan is released, the
Trustee or its agent shall send such Trustee Mortgage Loan File to the Servicer for recordation of
the mortgage release or satisfaction in the proper recording office.
(b) Release of Trustee Mortgage Loan File for Other Purposes. From time to time as is
appropriate for the servicing or foreclosure of a Mortgage Loan or the acquisition of Mortgaged
Premises in lieu of foreclosure or for the making of any claim against or collection under any
Mortgage Insurance Policy, Flood Insurance Policy, Hazard Insurance Policy, Mortgagor Bankruptcy
Bond, the Special Hazard Insurance Policy, the Servicer Fidelity Bond, the Servicer Errors and
Omissions Policy, or for purposes of effecting a partial release of any Mortgaged Premises from the
lien of the Security Instrument or for making any corrections to the Note or the Security
Instrument or other documents constituting the Trustee Mortgage Loan File, the Master Servicer
shall deliver to the Trustee, with a copy to the Issuing Entity, (i) an officer’s certificate of
the Servicer (RMIC Form 340) as required under Section 731 or Section 742 of the Sales/Servicing
Agreement, and shall certify as to the reason for such release and that such release will not
invalidate the insurance coverage provided in respect to the Mortgage Loan under any of the
foregoing insurance policies, and (ii) an executed Trust Receipt (RMIC Form 347), executed by an
officer of the Lender or by a Servicing Officer, designating whether the Trustee Mortgage File, or
the part thereof requested, shall be released to the Master Servicer or the Servicer. Upon receipt
of the foregoing, the Issuing Entity will cause the Trustee or its agent to deliver to the Master
Servicer, or the Servicer if the Master Servicer so requests, the Trustee Mortgage Loan File or
documents so requested. Subject to the further limitations in this Section 3.04(b) below, the
Master Servicer shall cause the Trustee Mortgage Loan File or documents so released to be returned
to the Trustee or its agent when the need therefor by the Master Servicer or Servicer no longer
exists, unless the Mortgage Loan is liquidated and the proceeds thereof are deposited in a
Custodial P & I Account, in which case the Issuing Entity shall cause the Trustee to deliver the
Trust Receipt to the Master Servicer. If a Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Premises as authorized by its Sales/Servicing Agreement, the
Master Servicer shall deliver or cause to be delivered to the Trustee, for signature, as
appropriate, any court pleadings, request for trustee’s sale or other documents necessary to such
foreclosure or to any legal action brought to obtain judgment against the Borrower on the Note or
the Security Instrument or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Note or the Security Instrument or otherwise available at law or in equity.
Together with such documents or pleadings, the Master Servicer shall deliver to the Trustee an
officer’s certificate of the Servicer as required under Section 731 or Section 742 of the
Sales/Servicing Agreement requesting that such pleadings or documents be executed by the Trustee
and a Servicing Officer shall certify as to the reason such documents or pleadings are
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required and that the execution and delivery thereof by the Trustee will not invalidate the
insurance coverage under the Special Hazard Insurance Policy, Flood Insurance Policy (if any), or
Mortgagor Bankruptcy Bond or invalidate or otherwise affect the lien of the Security Instrument
except for the termination of such lien upon completion of the foreclosure. Notwithstanding the
foregoing, the Master Servicer shall cause possession of any Trustee Mortgage Loan File or
documents therein which have been released by the Trustee to be retained at all times by the Master
Servicer or the Servicer, if appropriate, unless (i) the Mortgage Loan has been liquidated and the
Insurance Proceeds or Liquidation Proceeds relating to the Mortgage Loan have been deposited in a
Custodial P & I Account or (ii) the Trustee Mortgage Loan File or documents have been delivered to
an attorney or to a public trustee or other public official as required by law for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgage
Premises and the Master Servicer has delivered to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which the Trustee Mortgage Loan File or
documents were delivered and the purpose or purposes of such delivery.
Section 3.05. Documents, Records and Funds in Possession of Master Servicer to be Held
for Trustee.
Notwithstanding other provisions of the Master Servicing Agreement, the Master Servicer shall
transmit to the Trustee as required by the Master Servicing Agreement and the Sales/Servicing
Agreement all documents and instruments coming into the possession of the Master Servicer from time
to time and shall account fully to the Trustee and FMSC for all funds received by the Master
Servicer in the Master Custodial P & I Account or which otherwise are collected by the Master
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan. All
Trustee Mortgage Loan Files, Lender Mortgage Loan Files and funds collected or held by, or under
the control of, the Master Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds or Insurance Proceeds, including
but not limited to, any funds on deposit in the Master Custodial P & I Account and in any Custodial
P & I Account, shall be held by the Master Servicer for and on behalf of the Trustee, FMSC and the
Securityholders and shall be and remain the sole and exclusive property of the Trustee. The Master
Servicer also agrees that it shall not create, incur or subject any Lender Mortgage Loan File,
Trustee Mortgage Loan File or funds that are deposited in any Custodial P & I Account or Custodial
T & I Reserve Account, in the Master Custodial P & I Account and or any funds that otherwise are or
may become due or payable to the Trustee, to any claim, lien, security interest, judgment, levy,
writ of attachment or other encumbrance, nor assert by legal action or otherwise any claim or right
of set-off against any Lender Mortgage Loan File or Trustee Mortgage Loan File or any funds
collected on, or in connection with, a Mortgage Loan except, however, that the Master Servicer
shall be entitled to set-off against and deduct from any such funds any amounts that are properly
due and payable to the Master Servicer under this Agreement. The Master Servicer hereby
acknowledges that concurrently with the execution of the Master Servicing Agreement, the Trustee
shall have acquired and shall hold a security interest in the Lender Mortgage Loan Files and
Trustee Mortgage Loan Files (and in all Mortgage
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Loans represented by such Lender Mortgage Loan Files and Trustee Mortgage Loan Files) and in
all funds now or hereafter held by, or under the control of, a Servicer or the Master Servicer that
are collected by any Servicer or the Master Servicer in connection with the Mortgage Loans, whether
as scheduled installments or principal or interest or as full or partial prepayments of principal
or interest or as Liquidation Proceeds or Insurance Proceeds, and in all proceeds of the foregoing
and proceeds of proceeds (but excluding any Servicing Fees or other amounts to which the Servicer
is entitled under its Sales/Servicing Agreement or the Master Servicer is entitled to under the
Master Servicing Agreement); and the Master Servicer agrees that so long as the Mortgage Loans are
assigned to and held by the Trustee, all Lender Mortgage Loan Files and Trustee Mortgage Loan Files
(and any documents or instruments constituting a part of such files) and such funds which come into
the possession or custody of, or which are subject to the control of, the Master Servicer shall be
held by the Master Servicer for and on behalf of the Trustee as the Trustee’s agent and bailee for
purposes of perfecting the Trustee’s security interest therein as provided by the applicable
uniform commercial code or other laws.
Section 3.06. Modification of Requirements to Servicing Provisions of the Sales/Servicing
Agreement.
Subject to the prior written approval of the Issuing Entity, FMSC and the Trustee, the Master
Servicer from time to time may issue to any Servicer, to the extent permitted by such Servicer’s
Sales/Servicing Agreement, such modifications and amendments to the Sales/Servicing Agreement that
the Master Servicer deems necessary or appropriate to confirm or carry out more fully the intent
and purpose of the Sales/Servicing Agreement and the duties, responsibilities and obligations to be
performed by the Servicer thereunder. Such consents by the Issuing Entity, FMSC and the Trustee
will not be unreasonably withheld. Prior to the issuance of any modification or amendment, the
Master Servicer shall deliver to the Trustee, with a copy to the Issuing Entity and FMSC, an
Officer’s Certificate setting forth (i) the provision that is to be modified or amended, (ii) the
modification or amendment that the Master Servicer desires to issue and (iii) the reason or reasons
for such proposed amendment or modification.
Section 3.07. Waiver by master Servicer of Certain Requirements in the Sales/Servicing
Agreement.
In addition to any other powers granted the Master Servicer, the Master Servicer is
specifically hereby authorized, in its sole discretion, to waive compliance by any Servicer with:
(a) the requirement in the Sales/Servicing Agreement that the Fidelity Bond and Errors and
Omissions Policy name FMSC and the Master Servicer as additional obligees or insureds;
(b) the requirement in the Sales/Servicing Agreement that the Errors and Omissions Policy
contain a severability of interests provisions; and
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(c) the requirement in the Sales/Servicing Agreement that property taxes and insurance
premiums be collected on any Mortgage Loan with a Loan-to-Value in excess of 80% and deposited in a
Custodial T & I Account either (i) on a loan by loan basis for a Servicer whose Errors and
Omissions Policy is in an amount equal to at least $1 million or (ii) on an over-all Servicer basis
for a Servicer whose Errors and Omissions Policy is in an amount equal to at least $5 million.
Section 3.08. Assignment of Sales/Servicing Agreements.
Pursuant to Section 140 of the Sales/Servicing Agreement, without the consent of the Master
Servicer, a Servicer may not transfer or assign all or substantially all of its rights, benefits or
privileges under any Sales/Servicing Agreement to any other Person nor delegate to or subcontract
with, nor authorize or appoint, any other Person to perform all or substantially all of the
Servicer’s duties, covenants or obligations to be performed by the Servicer under the
Sales/Servicing Agreement. The Master Servicer agrees that on written application from a Servicer,
it will consider promptly such a request to transfer and/or delegate and will not unreasonably
withhold its consent to such transfer and/or delegation.
Section 3.09. Representations and Warranties.
The Master Servicer hereby represents and warrants to the Issuing Entity, the Trustee, FMSC,
and the underwriters for the Securities, and at all times during the terms of each Master Servicing
Agreement shall be deemed to represent and warrant, that:
(a) The Master Servicer has been duly incorporated and is validly existing in good standing
under the laws of the jurisdiction of its incorporation and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each jurisdiction in which the
performance of its duties under the Master Servicing Agreement would require such qualification;
the Master Servicer holds all material licenses, certificates and permits from all governmental
authorities necessary for the conduct of its business and has received no notice of proceedings
relating to the revocation of any such license, certificate or permit, which singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would materially affect
the conduct of the business, results of operations, net worth or condition (financial or otherwise)
of the Master Servicer; and the Master Servicer will have the corporate power and authority to
conduct its business as required or contemplated by the Master Servicing Agreement and to perform
the covenants and obligations to be performed by it hereunder.
(b) The execution and delivery by the Master Servicer of the Master Servicing Agreement is
within the corporate power of the Master Servicer and has been duly authorized by all necessary
corporate action on the part of the Master Servicer; and neither the execution and delivery of the
Master Servicing Agreement by the Master Servicer, nor the consummation by the Master Servicer of
the transactions herein contemplated, nor compliance with the provisions hereof by the Master
Servicer, will (1) conflict with or result in a breach of, or will constitute a default under, any
of the
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provisions of the certificate of incorporation or by-laws of the Master Servicer or any law,
governmental rule or regulation, or any judgment, decree or order binding on the Master Servicer or
its properties, or any of the provisions of any indenture, mortgage, deed of trust, contract or
other instrument to which the Master Servicer is a party or by which it is bound or (2) result in
the creation or imposition of any lien, charge or encumbrance upon any of its properties pursuant
to the terms of any such indenture, mortgage, deed of trust, contract or other instrument.
(c) The Master Servicing Agreement has been duly executed and delivered by the Master Servicer
and constitutes a legal, valid and binding agreement of the Master Servicer enforceable against the
Master Servicer in accordance with its terms, subject to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency or other similar laws affecting the enforcement of
creditors’ rights generally and to general principles of equity.
Section 3.10. Closing Certificate and Opinion.
On or before the date of closing of a series of Securities, the Master Servicer will deliver
to the Issuing Entity an Officer’s Certificate, dated the date of the closing of such series of
Securities, confirming that the representations and warranties contained in Section 3.09 are true
and correct as of such date, and that the underwriters of such series of Securities shall be
entitled to rely thereon. The Master Servicer shall cause to be delivered to the underwriters of
such series of Securities an opinion of counsel, dated the date of closing on such series of
Securities, in form and substance satisfactory to such underwriters, as to the due authorization,
execution and delivery of the Master Servicing Agreement by the Master Servicer and the
enforceability thereof. The Master Servicer shall also deliver a Certificate dated the date of
closing on such series of Securities, signed by two officers, as required under the Indenture, to
the effect that:
(a) No Event of Default by the Master Servicer has occurred hereunder;
(b) To the extent required by any Rating Agency rating the Securities, a guarantee of the
performance of certain obligations of the Master Servicer hereunder has been provided; and
(c) The Master Servicer maintains such errors and omissions insurance and fidelity bond
coverage as is required hereunder.
ARTICLE IV
INSURANCE AND BONDS
Section 4.01. Maintenance of Insurance and Collections Thereunder.
The Master Servicer shall maintain and keep in full force and effect during the term of the
Master Servicing Agreement each Pool Insurance Policy (and any endorsement thereto), the Mortgagor
Bankruptcy Bond and the Special Hazard
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Insurance Policy and shall provide from time to time to the surety or insurer under each such
policy or bond all reports and other information required thereby; provided, however, that the
Trustee must pay when due the premium or premiums due each surety or insurance company issuing such
policies and bonds. In the event (i) that any insurance company or surety company for any of the
foregoing policies or bonds shall be unable to fulfill its obligations under such bond or policy,
or (ii) any Rating Agency shall lower or propose to lower the rating on the Securities due to the
financial condition of such insurance company or surety company, the Master Servicer upon approval
of the Trustee shall terminate such policy or bond and secure replacement policies in form and
substance satisfactory to the Trustee with coverage comparable to that which has been terminated.
A replacement policy or bond shall also be obtained for any such policy or bond that is cancelled
or terminated for any reason. Notwithstanding the foregoing, if the cost of any such replacement
policy or bond shall be greater than the cost of the policy or bond that has been terminated, then
the Master Servicer shall notify FMSC of such increase in cost and, if FMSC does not agree to pay
such additional amounts, the amount of coverage shall be reduced to a level such that the premium
therefor shall not exceed the cost of premium for the policy or bond that has been terminated,
provided that the Rating Agency has consented to such reduction in coverage. If FMSC does agree to
pay an amount in excess of the cost of the original policy or bond, the Master Servicer shall
structure the replacement policy or bond so that failure by FMSC to pay such additional amount will
not affect the amount of coverage obtainable for the cost of the original policy or bond.
Section 4.02. Payment of Premiums.
No later than 15 Business Days prior to the date thereof, the Master Servicer shall deliver to
the Trustee a statement of the premium due on the Mortgagor Bankruptcy Bond (if any), each Pool
Insurance Policy (if any), and the Special Hazard Policy (if any), together with an Officer’s
Certificate certifying that the amount reflected on the statement is correct and is properly due
and payable and instructing the Trustee to pay such amounts to the appropriate insurer or surety.
The Master Servicer shall obtain and provide to the Trustee from each such insurer or surety a
renewal policy or a certificate evidencing that such policy or bond has been renewed and will
remain in force for the renewal period stated thereon.
Section 4.03. Presentment of Claims and Collection of Proceeds.
The Master Servicer shall prepare and present on behalf of the Trustee and the Securityholders
all claims under any Mortgagor Bankruptcy Bond, each Servicer Fidelity Bond, each Servicer Errors
and Omissions Policy, and the Special Hazard Insurance Policy, and take such actions (including the
negotiation, settlement, compromise or enforcement of the insured’s claim) as shall be necessary to
realize recovery under such bonds and policies. Any proceeds disbursed to the Master Servicer in
respect of such policies or bonds shall be promptly deposited in the Master Custodial P & I Account
upon receipt, except for any amounts realized under the Special Hazard Insurance Policy that are to
be applied to the repair or restoration of the related property as a condition requisite to the
presentation of claims on the related Mortgage Loan to
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the insurer under any applicable Mortgage Insurance Policy. The Master Servicer shall also
assure that each Servicer prepares and presents on behalf of the Trustee and the Securityholders
all claims under each applicable Mortgage Insurance Policy, and that each Servicer takes such other
actions (including the negotiation, settlement, compromise and enforcement of the insured’s claim)
as is necessary to realize recovery under such policies and that all claim proceeds are deposited
in the appropriate Custodial P & I Account.
Section 4.04. Renewal of Primary Mortgage Insurance Policies.
The Master Servicer may, subject to applicable law, direct any Servicer to renew any Primary
Mortgage Insurance Policy on any Mortgage Loan not insured by the Mortgage Insurer that issued the
Pool Insurance Policy which covered such Mortgage Loan with a Primary Mortgage Insurance Policy
issued by the Mortgage Insurer which issued the Pool Insurance Policy relating to such Mortgage
Loan.
ARTICLE V
ADVANCES BY MASTER SERVICER FOR P & I
ADVANCES, ATTORNEYS’ FEES AND OTHER COSTS
ADVANCES, ATTORNEYS’ FEES AND OTHER COSTS
Section 5.01. Recoverable Advances.
The Master Servicer shall be required to make the following advances with respect to Mortgage
Loans to the extent the Master Servicer determines, in good faith, that an advance made hereunder
is recoverable from Insurance Proceeds, Liquidation Proceeds or subsequent payments by the Borrower
of the related Mortgage Loans. In the event the Master Servicer determines that all, or a portion,
of any advance required by this Section 5.01 is not so recoverable, the Master Servicer shall
promptly deliver to the Trustee and to FMSC an Officer’s Certificate setting forth the reasons for
such determination.
(a) Monthly P & I Advance. The Master Servicer shall make a Monthly P & I Advance to
the Master Custodial P & I Account, in the amount, if any, of the aggregate scheduled installments
of principal and interest (less applicable servicing fees) on the Mortgage Loans that were due on
the Due Date but which were not received or advanced by the Servicers and remitted to the Master
Custodial P & I Account on or prior to the Master Servicer Remittance Date. Each Monthly P & I
Advance shall be remitted in immediately available funds to the Master Custodial P & I Account no
later than the Master Servicer Remittance Date for the month in which the Due Date occurs. Prior
to the close of business on the Master Servicer Remittance Date, the Master Servicer shall
determine whether and to what extent any Servicers have failed to make any advances of principal or
any interest in respect to scheduled installments of principal and interest that were due on the
Due Date and whether such deficiencies, if advanced by the Master Servicer, would be reimbursable
from Insurance Proceeds, Liquidation Proceeds or subsequent payments by the Borrower of the related
Mortgage Loans.
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(b) Advances for Attorneys’ Fees. To the extent not made by the Servicer, the Master
Servicer shall make advances from time to time for attorneys’ fees and court costs incurred, or
which reasonably can be expected to be incurred, for the foreclosure of any Mortgage Loan or for
any transaction in which the Trustee is expected to receive a deed-in-lieu of foreclosure.
(c) Advances for Repairs and Restoration. In the event that any Mortgaged Premises
shall be damaged or destroyed, and if the Servicer fails to advance the funds necessary to repair
or restore the damaged or destroyed Mortgaged Premises, then the Master Servicer shall advance such
funds and take such other action as if necessary to repair or restore the damage or loss.
(d) Advances for Taxes and Insurance Premiums. To the extent a Servicer is required
to advance funds sufficient to pay the taxes or insurance premiums with respect to a Mortgage Loan
pursuant to Section 980 of the Sales/Servicing Agreement and the Servicer fails to make such
advance, the Master Servicer shall advance such funds and take such steps as are necessary to pay
such taxes or insurance premiums.
(e) Advances for Amounts Collected by Servicer but Not Remitted. In the event that
any Servicer fails to remit to the Master Custodial P & I Account on or before the Master Servicer
Remittance Date, the full amount of the funds in the custody or under the control of the Servicer
that the Servicer is required to remit under its Sales/Servicing Agreement, then the Master
Servicer, upon and subject to the terms of this Article V, shall promptly advance and remit to the
Master Custodial P & I Account an amount equal to the required remittance.
Section 5.02. Non-Recoverable Advances.
Any Monthly P & I Advance or other advance previously made by the Master Servicer under this
Section 5.01 which the Master Servicer shall ultimately determine in its good faith judgment to be
not recoverable from Insurance Proceeds, Liquidation Proceeds or subsequent payments by the
Borrower shall be a Non-Recoverable Advance. The determination by the Master Servicer that it has
made a Non-Recoverable Advance shall be evidenced by an Officer’s Certificate of the Master
Servicer promptly delivered to the Trustee and FMSC setting forth the reasons for such
determination. Following the Trustee’s receipt of the Officer’s Certificate and FMSC’s acceptance
of such certification, the Master Servicer shall be entitled to reimbursement for such
Non-Recoverable Advance as provided in Section 7.02 of these Standard Terms.
ARTICLE VI
PAYMENTS BY MASTER SERVICER
Section 6.01. General.
The Master Servicer shall establish and maintain a Master Custodial P&I Account into which the
Master Servicer shall deposit payments, collections and advances with
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respect to each Mortgage Loan until such amounts are transferred to the Collateral Proceeds
Account as provided herein. The Master Servicer may elect to use a single Master Custodial P&I
Account for more than one series of Securities. Each separate Master Custodial P&I Account shall
reflect the custodial nature of the account and that all funds in such account are held in trust
for the benefit of the Trustee. In the event that Master Servicer does not timely receive each
installment of principal and interest in respect of any Mortgage Loan, the Master Servicer shall
advance funds as provided in Section 5.01 hereof.
Section 6.02. Deposits Into Master Custodial P&I Account.
On the 15th calendar day of each month (or the next preceding business day if such 15th day is
not a business day) the Master Servicer shall withdraw from each Custodial P&I Account maintained
by a Servicer and deposit into the Master Custodial P&I Account an amount with respect to each
Mortgage Loan serviced by such Servicer equal to:
(a) All scheduled installments of principal and interest on the Mortgage Loan received or
advanced by the Servicer net of (a) Servicing Fees due the Servicer and (b) any funds to be applied
by the Trustee from the Buy-Down Fund;
(b) Any amounts in respect of a Mortgage Loan representing late payments of principal and
interest to the extent such amounts exceed outstanding unreimbursed advances, if any, of the
Servicer with respect to such Mortgage Loan, net of Servicing Fees due the Servicer;
(c) Each principal prepayment (whether full or partial) on such Mortgage Loans (net of
Servicing Fees due the Servicer), together with any interest applicable to such principal
prepayments which has been paid by the Borrower; and
(d) Any Insurance Proceeds (to the extent not applied to the repair or restoration of the
Mortgaged Property) or Liquidation Proceeds (net of Servicing Fees due the Servicer).
Section 6.03. Withdrawals From Master Custodial P&I Accounts.
On a daily basis, to the extent of amounts received in respect of a Mortgage Loan from
Insurance Proceeds, Liquidation Proceeds, or late payments made by the Borrower, the Master
Servicer may withdraw from the appropriate Master Custodial P&I Account any amounts advanced by the
Master Servicer for principal and interest on such Mortgage Loan for which the Master Servicer is
entitled to reimbursement under these Standard Terms.
If at any time the funds in any Master Custodial P&I Account exceed the limits of the FDIC
insurance on such account, the Master Servicer shall promptly withdraw such excess funds from such
account and transfer such excess funds to the appropriate Collateral Proceeds Account or a separate
Master Custodial P&I Account. Any funds
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deposited in a Master Custodial P&I Account, may be invested to the next Master Servicer
Remittance Date only in “Eligible Investments” as defined in the Indenture.
On or prior to the Master Servicer Remittance Date, the Master Servicer, to the extent not
remitted prior to the Master Servicer Remittance Date, shall remit from the funds in each Master
Custodial P&I Account by wire transfer (or as otherwise instructed by the Trustee) in immediately
available funds to the Collateral Proceeds Account an amount equal to the aggregate of the
following:
(i) All scheduled installments of principal and interest on the applicable Mortgage
Loans received or advanced by a Servicer or the Master Servicer that were due on the Due
Date, net of (a) Servicing and Master Servicing Fees due the Servicer and the Master
Servicer, respectively, and (b) any funds to be applied by the Trustee from the Buy-Down
Fund;
(ii) All amounts received in respect of the applicable Mortgage Loans representing late
payments of principal and interest due to the extent such amounts exceed outstanding
unreimbursed advances, if any, of the Servicer or the Master Servicer with respect to such
Mortgage Loans, net of Servicing and Master Servicing Fees;
(iii) Each principal prepayment (whether full or partial) on the applicable Mortgage
Loans, together with interest calculated to the end of the calendar month during which such
principal prepayment shall have been received by the Servicer as required by Section 6.04
(including the portion of the interest which shall have been paid by the Borrower and the
interest, if any, which shall have been paid by the Master Servicer pursuant to Section 6.04
hereof), net of Servicing and Master Servicing Fees; and
(iv) Any Insurance Proceeds in respect of such Mortgage Loans (to the extent not
applied to the repair or restoration of the Mortgaged Property) or Liquidation Proceeds
together with interest calculated to the end of the calendar month during which such
Insurance Proceeds or Liquidation Proceeds shall have been received by the Servicer as
required by Section 6.04 (including the portion of the interest which shall have been paid
from such proceeds and the interest, if any, which shall have been paid by the Master
Servicer pursuant to Section 6.04 hereof), net of Servicing and Master Servicing Fees.
Section 6.04. Payments for Additional Interest In Connection with Certain Prepayments and
Other Liquidations.
In the event that any Mortgage Loan is paid in full following the 6th day preceding the Master
Servicer Remittance Date or partially prepaid, whether from payment by the Borrower, Liquidation
Proceeds, Insurance Proceeds or otherwise and such prepayment in full or partial prepayment does
not include interest on the outstanding principal balance through and including the last day of the
month during which such prepayment is made, then to the extent that such interest shall not have
been paid by
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the Servicer and deposited in the appropriate Custodial P & I Account on or before the Master
Servicer Remittance Date next succeeding the date of such full or partial prepayment, the Master
Servicer shall pay and deposit into the Master Custodial P & I Account, on or before the Master
Servicer Remittance Date of the month in which such prepayment is remitted to the Trustee an amount
equal to such additional interest (net of Servicing Fees). Such payment will not be considered a
Non-Recoverable Advance; and in case of such payment, the Master Servicer shall not be entitled to
any recovery or reimbursement from the Trustee, FMSC, or the Securityholders, but may seek and
obtain recovery from the Servicer that failed to make the payment through legal action or
otherwise, to the extent provided in the related Sales/Servicing Agreement.
In the event of any prepayment in full of any Mortgage Loan on or before the 6th day preceding
the Master Servicer Remittance Date, such prepayment shall be deemed to have been made as of the
last day of the preceding calendar month, so that no interest will be deemed to have accrued on
such Mortgage Loan with respect to the calendar month in which the prepayment in full occurs and
the Master Servicer will not be obligated to deposit to the Master Custodial P&I Account any
interest actually accrued and paid on such Mortgage Loan with respect to the calendar month in
which such prepayment occurs.
Section 6.05. Payments for the Repurchase of Loans.
In lieu of the Issuing Entity providing a mortgage repurchase bond to secure the Securities,
the Master Servicer agrees to the following condition to secure its obligation under Section 3.02
of these Standard Terms. Section 3.02 specifically requires the Master Servicer, upon a default or
termination of a Servicer under a Sales/Servicing Agreement, to assume the Servicer’s obligations
under the Sales/Servicing Agreement, including the obligation to purchase certain Mortgage Loans
pursuant to Section 630 of the Sales/Servicing Agreement. The Master Servicer’s obligation to
repurchase Mortgage Loans securing a series of Securities is specifically limited to repurchase in
the event that insurance proceeds otherwise payable have been denied on the grounds of fraud and is
further limited at any one time to the First Year Repurchase Limit set forth in the Master
Servicing Agreement for the period ending one year from the date of the Master Servicing Agreement
(the “First Year”); to the Second Year Repurchase Limit set forth in the Master Servicing Agreement
(less any amounts already paid by the Master Servicer under this Section 6.05) for the period
beginning one year from the date of this Master Servicing Agreement and ending one year thereafter
(the “Second Year”); to the Third Year Repurchase Limit set forth in the Master Servicing Agreement
(less any amount already paid by the Master Servicer under this Section 6.05) for the period
beginning two years from the date of this Master Servicing Agreement and ending three years
thereafter (the “Third Year”); to the Fourth Year Repurchase Limit set forth in the Master
Servicing Agreement (less any amounts already paid by the Master Servicer under this Section 6.05)
for the period beginning three years from the date of this Master Servicing Agreement and ending
four years thereafter (the “Fourth Year”); and to the Fifth Year Repurchase Limit set forth in the
Master Servicing Agreement (less any amounts already paid by the Master Servicer under this Section
6.05) for the period beginning four years from the date of this Master Servicing Agreement and
ending five
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years thereafter (the “Fifth Year”). Any payments by the Master Servicer under this Section
6.05 will not be considered a Non-Recoverable Advance.
Section 6.06. Payments for Losses due to Mortgagor Bankruptcies.
In lieu of the Issuing Entity providing a mortgagor bankruptcy insurance policy, the Master
Servicer will pledge to the Trustee a Mortgagor Bankruptcy Fund to protect against any losses to
the Securityholders from the reduction of the principal balance or interest rate on any Note by a
bankruptcy court. To the extent the Trustee draws on such Mortgagor Bankruptcy Fund, such loss
will be borne by the Master Servicer, and will not be considered a Non-Recoverable Advance. The
amount of the Mortgagor Bankruptcy Fund will be specified in the Indenture for the Securities.
ARTICLE VII
COMPENSATION AND DISBURSEMENTS TO MASTER SERVICER
Section 7.01. Compensation to the Master Servicer.
As compensation for the services provided by the Master Servicer under the Master Servicing
Agreement, the Master Servicer shall be entitled to receive as a monthly servicing fee in respect
of each Mortgage Loan, payable from the Master Custodial P & I Account, an amount equal to the
product of the “Master Servicing Fee Percentage” set forth in the Master Servicing Agreement
multiplied by the outstanding principal amount of each Mortgage Loan determined as of the Due Date
of the month prior to the month for which this fee is due, divided by 12. In return for its
obligations under Section 6.04, the Master Servicer is entitled to receive as additional
compensation, any interest earnings on the Master Custodial P & I Account, and any interest
received on Liquidation principal that is received in the same month that such Liquidation
principal is remitted to the Trustee. The Master Servicer is permitted to pay itself the monthly
servicing fee within five Business Days after the Master Servicer has delivered to the Trustee the
Monthly Remittance Report for such month; provided, however, that the Master Servicer shall not be
entitled to receive any monthly servicing fee until the month during which the first Master
Servicer Remittance Date occurs.
Section 7.02. Authorized Disbursements from the Collateral Proceeds Account.
Following receipt by the Trustee of the Officer’s Certificate required by Section 5.01(f) and
FMSC’s acceptance thereof, not later than five Business Days following the Trustee’s receipt of the
Monthly Remittance Report from the Master Servicer, the Trustee shall reimburse or pay the Master
Servicer or each Servicer, as appropriate, from the Collateral Proceeds Account (or any other
account established by the Indenture) to the extent not previously reimbursed or paid, the amounts
set forth below in the following descending order of priority prior to the disbursement of any
funds to the Securityholders:
(a) Any advances made by the Master Servicer under the Master Servicing Agreement that are
Non-Recoverable Advances; and
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(b) Any advances made by any Servicer under its Sales/Servicing Agreement that are
Non-Recoverable Advances.
ARTICLE VIII
REPORTS AND CERTIFICATE TO TRUSTEE
Section 8.01. Monthly Reports to the Issuing Entity and Trustee.
Not later than the day of each calendar month specified in Subsections (a) or (b) below (or
the previous Business Day if such specified day is not a Business Day), the Master Servicer shall
forward to the Issuing Entity and the Trustee the following statements and reports, each certified
as true and correct by a Servicing Officer:
(a) On or by the 16th day of each month, the Master Servicer shall notify the Trustee of the
amount of funds to be remitted by the Master Servicer to the Trustee on the Master Servicer
Remittance Date.
(b) On or by the 20th day of each month, the reports described in paragraphs A, B, C, D and E
on Exhibit A, together with an Officer’s Certificate certifying that all such information
is correct, and that the Master Servicer has complied with all aspects of the Master Servicing
Agreement.
The reports constituting the Monthly Remittance Report shall be current as of the first day of
such month. The Master Servicer shall use its best efforts promptly to provide such reports to the
Rating Agencies rating the Securities.
Section 8.02. Annual Statement as to Compliance.
The Master Servicer shall deliver (or otherwise make available) (and the Master Servicer shall
cause any Servicing Function Participant engaged by it to deliver) to the Issuing Entity and the
Trustee on or before March 1 (with a ten-calendar day cure period) of each year, an Officer’s
Certificate stating, as to the signer thereof, that (a) a review of such party’s activities during
the preceding calendar year or portion thereof and of such party’s performance under this
Agreement, or such other applicable agreement in the case of a Servicing Function Participant, has
been made under such officer’s supervision and (b) to the best of such officer’s knowledge, based
on such review, such party has fulfilled all its obligations under this Agreement, or such other
applicable agreement in the case of a Servicing Function Participant, in all material respects
throughout such year or portion thereof, or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such officer and the
nature and status thereof.
The Master Servicer shall include all annual statements of compliance received by it from each
Servicer with its own annual statement of compliance to be submitted to the Trustee pursuant to
this Section.
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In the event the Master Servicer or any Servicing Function Participant engaged by any such
party is terminated or resigns pursuant to the terms of this Agreement, or any applicable agreement
in the case of a Servicing Function Participant, as the case may be, such party shall provide an
Officer’s Certificate pursuant to this Section 3.22 or to such applicable agreement, as the case
may be, notwithstanding any such termination, assignment or resignation.
Section 8.03. Reports to the Issuing Entity and Trustee.
(a) By March 1 (with a ten-calendar day cure period) of each year, commencing in March 2007,
the Master Servicer, at its own expense, shall furnish or otherwise make available, and shall cause
any Servicing Function Participant engaged by it to furnish, each at its own expense, to the
Trustee and FMSC, a report on an assessment of compliance with the Relevant Servicing Criteria that
contains (i) a statement by such party of its responsibility for assessing compliance with the
Relevant Servicing Criteria as set forth in Exhibit B, (ii) a statement that such party used the
Relevant Servicing Criteria to assess compliance with the Relevant Servicing Criteria, (iii) such
party’s assessment of compliance with the Relevant Servicing Criteria as of and for the fiscal year
covered by the Form 10-K required to be filed pursuant to Section 8.04, including, if there has
been any material instance of noncompliance with the Relevant Servicing Criteria, a discussion of
each such failure and the nature and status thereof, and (iv) a statement that a registered public
accounting firm has issued an attestation report on such party’s assessment of compliance with the
Relevant Servicing Criteria as of and for such period.
No later than the end of each fiscal year for the Issuing Entity for which a 10-K is required
to be filed, the Master Servicer and the Trustee shall each forward to FMSC the name of each
Servicing Function Participant engaged by it and what Relevant Servicing Criteria will be addressed
in the report on assessment of compliance prepared by such Servicing Function Participant. When
the Master Servicer (or any Servicing Function Participant engaged by it) submit their assessments
to the Trustee, such parties will also at such time include the assessment and attestation pursuant
to Section 8.03(b) of each Servicing Function Participant engaged by it.
Promptly after receipt of each such report on assessment of compliance, (i) FMSC shall review
each such report and, if applicable, consult with the Master Servicer, the Trustee and any
Servicing Function Participant engaged by such parties as to the nature of any material instance of
noncompliance with the Relevant Servicing Criteria by each such party, and (ii) the Trustee shall
confirm that the assessments, taken as a whole, address all of the Servicing Criteria and taken
individually address the Relevant Servicing Criteria for each party as set forth on Exhibit B and
on any similar exhibit set forth in each Servicing Agreement in respect of each Servicer and notify
FMSC of any exceptions.
The Master Servicer shall include all annual reports on assessment of compliance received by
it from the Servicers with its own assessment of compliance to be submitted to the Trustee pursuant
to this Section.
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In the event the Master Servicer or any Servicing Function Participant engaged by any such
party is terminated, assigns its rights and obligations under, or resigns pursuant to, the terms of
this Agreement, or any other applicable agreement, as the case may be, such party shall provide a
report on assessment of compliance pursuant to this Section 8.03(a), or to such other applicable
agreement, notwithstanding any such termination, assignment or resignation.
(b) By March 1 (with a ten-calendar day cure period) of each year, commencing in March 2007,
the Master Servicer and the Trust Administrator, at its own expense, shall cause, and it shall
cause any Servicing Function Participant engaged by it to cause, each at its own expense, a
registered public accounting firm (which may also render other services to the Master Servicer, or
such other Servicing Function Participants, as the case may be) and that is a member of the
American Institute of Certified Public Accountants to furnish an attestation report to the Trustee
and FMSC, to the effect that (i) it has obtained a representation regarding certain matters from
the management of such party, which includes an assertion that such party has complied with the
Relevant Servicing Criteria, and (ii) on the basis of an examination conducted by such firm in
accordance with standards for attestation engagements issued or adopted by the PCAOB, it is
expressing an opinion as to whether such party’s compliance with the Relevant Servicing Criteria
was fairly stated in all material respects, or it cannot express an overall opinion regarding such
party’s assessment of compliance with the Relevant Servicing Criteria. In the event that an
overall opinion cannot be expressed, such registered public accounting firm shall state in such
report why it was unable to express such an opinion. Such report must be available for general use
and not contain restricted use language.
Promptly after receipt of each such assessment of compliance and attestation report, the
Trustee shall confirm that each assessment submitted pursuant to Section 8.03(a) is coupled with an
attestation meeting the requirements of this Section and notify FMSC of any exceptions.
The Master Servicer shall include each such attestation furnished to it by the Servicers with
its own attestation to be submitted to the Trustee pursuant to this Section.
In the event the Master Servicer or any Servicing Function Participant engaged by any such
party, is terminated, assigns its rights and duties under, or resigns pursuant to the terms of,
this Agreement, or any applicable custodial agreement, Servicing Agreement or sub-servicing
agreement, as the case may be, such party shall cause a registered public accounting firm to
provide an attestation pursuant to this Section 8.03(b), or such other applicable agreement,
notwithstanding any such termination, assignment or resignation.
Section 8.04. Commission Reporting.
(a) (i) Using best efforts, within 10 days after each Payment Date, and no later than 15 days
after each Payment Date (subject to permitted extensions under the
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Exchange Act), the Master Servicer shall, in accordance with industry standards, prepare and
file, on behalf of the Issuing Entity, with the Commission via the Electronic Data Gathering and
Retrieval System (“XXXXX”), any Form 10-D required by the Exchange Act, in form and substance as
required by the Exchange Act, signed by the Master Servicer, with a copy of the monthly statement
to be furnished by the Master Servicer to the securityholders for such Payment Date attached
thereto. Any disclosure in addition to the monthly statement that is required to be included on
Form 10-D (“Additional Form 10-D Disclosure”) shall be reported by the parties set forth on Exhibit
C to FMSC and the Trustee and directed and approved by FMSC pursuant to the following paragraph,
and the Master Servicer will have no duty or liability for any failure hereunder to determine or
prepare any Additional Form 10-D Disclosure, except as set forth in the next paragraph.
(ii) For so long as the Issuing Entity is subject to the reporting requirements of the
Exchange Act, within 5 calendar days after the related Payment Date, (i) the parties set forth in
Exhibit C shall be required to provide, pursuant to Section 8.04(a)(v) below, to the Master
Servicer and FMSC, to the extent known, in XXXXX-compatible format, or in such other format as
otherwise agreed upon by the Master Servicer and such party, the form and substance of any
Additional Form 10-D Disclosure, if applicable, together with an Additional Disclosure Notification
in the form attached hereto as Exhibit D (an “Additional Disclosure Notification”) and (ii) FMSC
will approve, as to form and substance, or disapprove, as the case may be, the inclusion of the
Additional Form 10-D Disclosure on Form 10-D. The Master Servicer has no duty under this Agreement
to monitor or enforce the performance by the parties listed on Exhibit C of their duties under this
paragraph or proactively solicit or procure from such parties any Additional Form 10-D Disclosure
information. FMSC will be responsible for any reasonable fees and expenses assessed or incurred by
the Master Servicer in connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this Section.
After preparing the Form 10-D, the Master Servicer shall, upon request, forward
electronically a copy of the Form 10-D to FMSC for review, only to the extent that the Form 10-D
contains Additional Form 10-D Disclosure. Within two Business Days after receipt of such copy, but
no later than the 7th calendar day (on a best efforts basis, and in no event later than the
12th calendar day) after the Payment Date, FMSC shall notify the Master Servicer in
writing (which may be furnished electronically) of any changes to or approval of such Form 10-D.
In the absence of receipt of any written changes or approval, or if FMSC does not request a copy of
a Form 10-D, the Master Servicer shall be entitled to assume that such Form 10-D is in final form
and the Master Servicer may proceed with the execution and filing of the Form 10-D. A duly
authorized representative of the Master Servicer shall sign each Form 10-D. If a Form 10-D cannot
be filed on time or if a previously filed Form 10-D needs to be amended, the Master Servicer will
follow the procedures set forth in Section 8.04(a)(vi). Promptly (but no later than one Business
Day) after filing with the Commission, the Master Servicer will make available on its internet
website a final executed copy of each Form 10-D filed by it. The parties to this Agreement
acknowledge that the performance by the Master Servicer and the Trustee of its duties under
Sections 8.04(a)(i), (ii) and (v) related to the timely
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preparation and filing of Form 10-D is contingent upon such parties strictly observing all
applicable deadlines in the performance of their duties under such Sections. FMSC acknowledges
that the performance by the Master Servicer of its duties under this Section 8.04(a)(ii) related to
the timely preparation, execution and filing of Form 10-D is also contingent upon the Servicer, the
Custodian and any Sub-Servicer or Subcontractor strictly observing deadlines no later than those
set forth in this paragraph that are applicable to the parties to this Agreement in the delivery to
the Master Servicer of any necessary Additional Form 10-D Disclosure pursuant to any applicable
agreement. The Master Servicer shall not have any liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare, execute and/or timely file such
Form 10-D and Form 10-K, where such failure results from the Trustee’s inability or failure to
receive, on a timely basis, any information from any other party hereto or any Custodian,
Sub-Servicer or Subcontractor needed to prepare, arrange for execution or file such Form 10-D, not
resulting from its own negligence, bad faith or willful misconduct.
(iii) Within four (4) Business Days after the occurrence of an event requiring disclosure on
Form 8-K (each such event, a “Reportable Event”), and if requested by FMSC, the Master Servicer
shall prepare and file on behalf of the Issuing Entity a Form 8-K, as required by the Exchange Act,
provided that FMSC shall file the initial Form 8-K in connection with the issuance of the
Securities. Any disclosure or information related to a Reportable Event or that is otherwise
required to be included on Form 8-K other than the initial Form 8-K (“Form 8-K Disclosure
Information”) shall, be reported by the parties set forth on Exhibit C to FMSC and the Trustee and
directed and approved by FMSC, pursuant to the following paragraph.
For so long as the Issuing Entity is subject to the Exchange Act reporting requirements, no
later than the close of business (New York City Time) on the 2nd Business Day after the
occurrence of a Reportable Event (i) the parties set forth in Exhibit C shall be required pursuant
to Section 8.04(a)(v) below to provide to the Master Servicer and FMSC, to the extent known, in
XXXXX-compatible format, or in such other format as otherwise agreed upon by the Trustee and such
party, the form and substance of any Form 8-K Disclosure Information, if applicable, together with
an Additional Disclosure Notification and (ii) FMSC will approve, as to form and substance, or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure Information on Form 8-K.
FMSC will be responsible for any reasonable fees and expenses assessed or incurred by the Master
Servicer in connection with including any Form 8-K Disclosure Information on Form 8-K pursuant to
this Section.
After preparing the Form 8-K, the Master Servicer shall, upon request, forward electronically
a copy of the Form 8-K to FMSC for review. Promptly, but no later than the close of business on
the third Business Day after the Reportable Event, FMSC shall notify the Master Servicer in writing
(which may be furnished electronically) of any changes to or approval of such Form 8-K. In the
absence of receipt of any written changes or approval, or if FMSC does not request a copy of a Form
8-K, the Master Servicer shall be entitled to assume that such Form 8-K is in final form and the
Master Servicer may proceed with the execution and filing of the Form 8-K. A duly
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authorized representative of the Master Servicer shall sign each Form 8-K. If a Form 8-K
cannot be filed on time or if a previously filed Form 8-K needs to be amended, the Master Servicer
will follow the procedures set forth in Section 8.04(a)(vi). Promptly (but no later than one
Business Day) after filing with the Commission, the Master Servicer will make available on its
internet website a final executed copy of each Form 8-K filed by it. The parties to this Agreement
acknowledge that the performance by the Master Servicer of its duties under this Section
8.04(a)(iii) related to the timely preparation and filing of Form 8-K is contingent upon such
parties strictly observing all applicable deadlines in the performance of their duties under this
Section 8.04(a)(iii). FMSC acknowledges that the performance by the Master Servicer of its duties
under this Section 8.04(a)(iii) related to the timely preparation, execution and filing of Form
10-D is also contingent upon the Servicer, the Custodians and any Sub-Servicer or Subcontractor
strictly observing deadlines no later than those set forth in this paragraph that are applicable to
the parties to this Agreement in the delivery to the Master Servicer of any necessary Form 8-K
Disclosure Information pursuant to the Custodial Agreement or any other applicable agreement. The
Master Servicer shall not have any liability for any loss, expense, damage or claim arising out of
or with respect to any failure to properly prepare, execute and/or timely file such Form 8-K, where
such failure results from the Trustee’s inability or failure to receive, on a timely basis, any
information from any other party hereto or any Custodian, Sub-servicer or Subcontractor needed to
prepare, arrange for execution or file such Form 8-K, not resulting from its own negligence, bad
faith or willful misconduct.
(iv) (A) On or prior to 90 days after the end of each fiscal year of the Issuing Entity or
such earlier date as may be required by the Exchange Act (the “10-K Filing Deadline”) (it being
understood that the fiscal year for the Issuing Entity ends on December 31st of each
year), the Trustee shall prepare and file on behalf of the Issuing Entity a Form 10-K, in form and
substance as required by the Exchange Act. Each such Form 10-K shall include the following items,
in each case to the extent they have been delivered to the Trustee within the applicable time
frames set forth in this Agreement, (i) an annual compliance statement for the Servicer, the Master
Servicer, the Trustee and any Sub-Servicer, Subcontractor or other Person engaged by such parties
or the Trustee (together with the Custodian, each a “Reporting Servicer”), as described under
Section 8.02 of this Agreement, provided, however, that the Trustee, at its discretion, may omit
from the Form 10-K any annual compliance statement that is not required to be filed with such Form
10-K for each Reporting Servicer pursuant to Regulation AB, (ii)(A) the annual reports on
assessment of compliance with Servicing Criteria for each Reporting Servicer, as described under
Section 8.03 of this Agreement, and (B) if the report on assessment of compliance with the
Servicing Criteria identifies any material instance of noncompliance, disclosure identifying such
instance of noncompliance, or if each reporting Servicer’s report on assessment of compliance with
Servicing Criteria is not included as an exhibit to such Form 10-K, disclosure that such report is
not included and an explanation why such report is not included provided, however, that the
Trustee, at its discretion, may omit from the Form 10-K any assessment of compliance or attestation
report described in clause (iii) below that is not required to be filed with such Form 10-K
pursuant to Regulation AB, (iii)(A) the registered public accounting firm attestation report for
each Reporting Servicer as described under Section 8.03 of this
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Agreement, and (B) if any registered public accounting firm attestation report described under
Section 8.03 identifies any material instance of noncompliance, disclosure identifying such
instance of noncompliance, or if any such registered public accounting firm attestation report is
not included as an exhibit to such Form 10-K, disclosure that such report is not included and an
explanation why such report is not included, and (iv) a Xxxxxxxx-Xxxxx Certification
(“Xxxxxxxx-Xxxxx Certification”) as described below. Any disclosure or information in addition to
(i) through (iv) above that is required to be included on Form 10-K (“Additional Form 10-K
Disclosure”) shall, be reported by the parties set forth on Exhibit C to FMSC and the Trustee and
directed and approved by FMSC pursuant to the following paragraph, and the Trustee will have no
duty or liability for any failure hereunder to determine or prepare any Additional Form 10-K
Disclosure, except as set forth in the next paragraph.
No later than March 1st (with a 10 calendar day cure period) of each year that the
Issuing Entity is subject to the Exchange Act reporting requirements, (i) the parties set forth in
Exhibit C shall be required to provide pursuant to Section 8.04(a)(v) below to FMSC and to the
Trustee, to the extent known, in XXXXX-compatible format, or in such other format as otherwise
agreed upon by the Trustee and such party, the form and substance of any Additional Form 10-K
Disclosure, if applicable, together with an Additional Disclosure Notification and (ii) FMSC will
approve, as to form and substance, or disapprove, as the case may be, the inclusion of the
Additional Form 10-K Disclosure on Form 10-K. The Trustee has no duty under this Agreement to
monitor or enforce the performance by the parties listed on Exhibit C of their duties under this
paragraph or proactively solicit or procure from such parties any Additional Form 10-K Disclosure
information. FMSC will be responsible for any reasonable fees and expenses assessed or incurred by
the Trustee in connection with including any Additional Form 10-K Disclosure on Form 10-K pursuant
to this Section.
After preparing the Form 10-K, the Trustee shall forward, upon request, electronically a copy
of the Form 10-K to FMSC for review. Within three Business Days after receipt of such copy, but no
later than March 25th, FMSC shall notify the Trustee in writing (which may be furnished
electronically) of any changes to or approval of such Form 10-K. In the absence of receipt of any
written changes or approval, or if FMSC does not request a copy of a Form 10-K, the Trustee shall
be entitled to assume that such Form 10-K is in final form and the Trustee may proceed with the
execution and filing of the Form 10-K. A senior officer of the Master Servicer in charge of the
master servicing function shall sign the Form 10-K. If a Form 10-K cannot be filed on time or if a
previously filed Form 10-K needs to be amended, the Trustee will follow the procedures set forth in
Section 4.07(a)(vi). Promptly (but no later than one Business Day) after filing with the
Commission, the Trustee will make available on its internet website a final executed copy of each
Form 10-K filed by it. The parties to this Agreement acknowledge that the performance by the
Master Servicer and the Trustee of its duties under Section 8.04(a)(iv) and Section 8.04(a) (v)
related to the timely preparation, execution and filing of Form 10-K is contingent upon such
parties strictly observing all applicable deadlines in the performance of their duties under such
Sections, Section 8.02 and Section 8.03. FMSC acknowledges that the performance by the Master
Servicer and the Trustee of its duties under this Section 8.04(a)(iv) related to
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the timely preparation, execution and filing of Form 10-K is also contingent upon the
Servicer, the Custodian and any Sub-Servicer or Subcontractor strictly observing deadlines no later
than those set forth in this paragraph that are applicable to the parties to this Agreement in the
delivery to the Trustee of any necessary Additional Form 10-K Disclosure, any annual statement of
compliance and any assessment of compliance and attestation pursuant to the related Custodial
Agreement or any other applicable agreement. Neither the Master Servicer nor the Trustee shall
have any liability for any loss, expense, damage, claim arising out of or with respect to any
failure to properly prepare, execute and/or timely file such Form 10-K, where such failure results
from the Trustee’s inability or failure to receive, on a timely basis, any information from any
other party hereto or any Custodian, Sub-servicer or Subcontractor needed to prepare, arrange for
execution or file such Form 10-K, not resulting from its own negligence, bad faith or willful
misconduct.
Each Form 10-K shall include a certification (the “Xxxxxxxx-Xxxxx Certification”), as set
forth in Exhibit E-1 attached hereto, required to be included therewith pursuant to the
Xxxxxxxx-Xxxxx Act. Each of the Servicer, the Master Servicer and the Trustee shall provide, and
each such party and the Trustee shall cause any Sub-servicer or Subcontractor engaged by it to
provide, to the Person who signs the Xxxxxxxx-Xxxxx Certification (the “Certifying Person”), by
March 15th of each year in which the Issuing Entity is subject to the reporting
requirements of the Exchange Act, a certification (a “Back-Up Certification”), in the form attached
hereto as Exhibit E-2, upon which the Certifying Person, the entity for which the Certifying Person
acts as an officer, and such entity’s officers, directors and Affiliates (collectively with the
Certifying Person, “Certification Parties”) can reasonably rely. A senior officer of Fremont shall
serve as the Certifying Person on behalf of the Issuing Entity. Such officer of the Certifying
Person can be contacted by e-mail at [ ] or by facsimile at [ ]. In the event
that any such party or any Sub-servicer or Subcontractor engaged by such party is terminated or
resigns pursuant to the terms of this Agreement, or any other applicable agreement, as the case may
be, such party shall provide a Back-Up Certification to the Certifying Person pursuant to this
Section 8.04(a)(iv) with respect to the period of time it was subject to this Agreement or any
other applicable agreement, as the case may be. Notwithstanding the foregoing, (i) the Master
Servicer and the Trustee shall not be required to deliver a Back-Up Certification to each other if
both are the same Person and the Master Servicer is the Certifying Person and (ii) the Master
Servicer shall not be obligated to sign the Xxxxxxxx-Xxxxx Certification in the event that it does
not receive any Back-Up Certification required to be furnished to it pursuant to this section or
any Servicing Agreement.
(v) With respect to any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or
any Form 8-K Disclosure Information (collectively, the “Additional Disclosure”) relating to the
Trust Fund, the Master Servicer’s and/or Trustee’s obligation to include such Additional
Information in the applicable Exchange Act report is subject to receipt from the entity that is
indicated in Exhibit C as the responsible party for providing that information, if other than the
Trustee, as and when required as described in Section 8.04(a)(ii) through (iv) above. Each of the
Master Servicer, the Servicer, the Trustee and Depositor hereby agree to notify and to provide,
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to the extent known, to the Trustee and FMSC, all Additional Disclosure relating to the Trust
Fund, with respect to which such party is the responsible party for providing that information, as
indicated in Exhibit D hereof.
The Master Servicer at its expense shall cause its independent certified public accountants,
which shall be a firm of national reputation, to furnish a single statement to the Trustee and to
the Issuing Entity on or before April 30 of each year relative to all series of Securities for
which a Master Servicing Agreement has been executed to the effect that such firm has examined
certain records and documents prepared by the Master Servicer relating to the Master Servicer’s
performance of its obligations required by Articles Four and Five of the Standard Terms to each
Master Servicing Agreement entered into on or before the preceding December 31, and that, on the
basis of such examination, such firm is of the opinion that the Master Servicer’s activities have
been conducted in compliance with each such Master Servicing Agreement, except for (i) such
exceptions as such firm believes to be immaterial and (ii) such other exceptions as are set forth
in such statement. Such examination shall be performed using various statistical sampling
techniques to verify the performance or occurrence of the following: (i) receipt of the detail and
certification reports and the custodial account reconciliation reports from the Servicers each
month, (ii) reconciliation and verification of the Servicer remittance each month, (iii)
reconciliation of the funds transferred to the Trustee by Bond Series, (iv) receipt of a copy of
the Servicer’s Errors and Omissions Policy, Fidelity Bond Policy and ACH Authorization forms, and
(v) maintenance by the Master Servicer of an Errors and Omission Policy in favor of
[___] and a Fidelity Bond Policy in favor of [___], which additionally names
[___] as a named insured. In addition, such examination shall include inquiries of the
Trustee, to determine whether the Trustee has received (i) a report setting forth the principal
balance and monthly remittance amount for each loan by the 15th day of each month and (ii) funds
due from the Master Servicer by the 20th day of each month. Upon request by the Trustee, FMSC, or
the Issuing Entity, the Master Servicer shall furnish to the Trustee copies of the audit report for
each Servicer as shall be required by the Sales/Servicing Agreement with such Servicer.
(b) In the event that the Trustee is unable to timely file with the Commission all or any
required portion of any Form 8-K, Form 10-D or Form 10-K required to be filed by this Agreement
because required disclosure information was either not delivered to it or was delivered to it after
the delivery deadlines set forth in this Agreement or for any other reason, the Trustee will
promptly notify electronically FMSC. In the case of Form 10-D and Form 10-K, the parties to this
Agreement will cooperate to prepare and file a Form 12b-25 and a Form 10-D/A and Form 10-K/A as
applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of Form 8-K, the Trustee
will, upon receipt of all required Form 8-K Disclosure Information and upon the approval and
direction of FMSC, include such disclosure information on the next succeeding Form 10-D. In the
event that any previously filed Form 8-K, Form 10-D or Form 10-K needs to be amended, in connection
with any Additional Form 10-D Disclosure (other than, in the case of Form 10-D, for the purpose of
restating any Monthly Statement), Additional
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Form 10-K Disclosure or Form 8-K Disclosure Information, the Trustee will electronically
notify FMSC and such other parties to the transaction as are affected by such amendment, and such
parties will cooperate to prepare any necessary Form 8-K/A, Form 10-D/A or Form 10-K/A. Any Form
15, Form 12b-25 or any amendment to Form 8-K or Form 10-D shall be signed by a duly authorized
representative or senior officer in charge of master servicing, as applicable, of the Master
Servicer. The parties to this Agreement acknowledge that the performance by the Master Servicer
and the Trustee of its duties under this Section 4.07(a)(vi) related to the timely preparation,
execution and filing of Form 15, a Form 12b-25 or any amendment to Form 8-K, Form 10-D or Form 10-K
is contingent upon each such party performing its duties under this Section. Neither the Master
Servicer nor the Trustee shall have any liability for any loss, expense, damage, claim arising out
of or with respect to any failure to properly prepare, execute and/or timely file any such Form 15,
Form 12b-25 or any amendments to Form 8-K, Form 10-D or Form 10-K, where such failure results from
the Trustee’s inability or failure to receive, on a timely basis, any information from any other
party hereto or any custodian, sub-servicer or subcontractor needed to prepare, arrange for
execution or file such Form 15, Form 12b-25 or any amendments to Form 8-K, Form 10-D or Form 10-K,
not resulting from its own negligence, bad faith or willful misconduct.
FMSC agrees to promptly furnish to the Trustee, from time to time upon request, such further
information, reports and financial statements within its control related to this Agreement and the
Mortgage Loans as the Trustee reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Trustee shall have no responsibility to file any items other than
those specified in this Section 8.04; provided, however, the Trustee will cooperate with FMSC in
connection with any additional filings with respect to the Trust Fund as FMSC deems necessary under
the Exchange Act. Fees and expenses incurred by the Trustee in connection with this Section 8.04
shall not be reimbursable from the Trust Fund.
(A) The Trustee shall indemnify and hold harmless FMSC and its officers, directors and
affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses arising out of or
based upon (i) a breach of the Trustee’s obligations under this Section 8.04 or the Trustee’s
negligence, bad faith or willful misconduct in connection therewith or (ii) any material
misstatement or omission in the Annual Statement of Compliance and the Assessment of Compliance
delivered by the Trustee pursuant to Section 8.02 and Section 8.03.
(B) FMSC shall indemnify and hold harmless the Trustee and the Master Servicer and
their respective officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach of the
obligations of FMSC under this Section 8.04 or FMSC’s negligence, bad faith or willful
misconduct in connection therewith.
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(C) The Master Servicer shall indemnify and hold harmless the Trustee and FMSC and
their respective officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments and other costs and expenses arising out of or based upon (i) a breach of the
obligations of the Master Servicer under this Section or the Master Servicer’s negligence,
bad faith or willful misconduct in connection therewith or (ii) any material misstatement or
omission in the Statement as to Compliance delivered by the Master Servicer pursuant to
Section 8.02 or the Assessment of Compliance delivered by the Master Servicer pursuant to
Section 8.03.
(c) Notwithstanding any other provisions of this Agreement, this Section 8.04 may be amended
without the consent of the Securityholders.
ARTICLE IX
MERGER OR CONSOLIDATION OF MASTER SERVICER; RESIGNATION
Section 9.01. Merger or Consolidation.
Anything herein to the contrary notwithstanding, any corporation into which the Master
Servicer may be merged or consolidated or any corporation resulting from any merger or
consolidation to which the Master Servicer shall be a party or any corporation succeeding to the
business of the Master Servicer shall be the successor of the Master Servicer hereunder without the
execution or filing of any paper or any further act on the part of any of the parties hereto.
Section 9.02. Assignment or Transfer of Master Servicing Agreement.
The Master Servicer may, with the prior written consent of the Issuing Entity, FMSC, and the
Trustee, assign or transfer all of its rights and obligations under the Master Servicing Agreement,
provided, however, that the Trustee shall not consent to such an assignment or transfer unless it
shall have received written notice from the Rating Agency that rated the Series to which the Master
Servicing Agreement relates that such assignment or transfer will not result in a reduction of the
rating assigned by the Rating Agency to such Series.
Section 9.03. Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties hereby imposed on it
except upon determination that its duties hereunder are no longer permissible under applicable law.
Any such determination permitting the resignation of the Master Servicer shall be evidenced by an
opinion of counsel to such effect delivered to the Trustee. No such resignation shall become
effective until the Trustee shall have assumed or a successor master servicer shall have been
appointed by the Trustee and until such successor shall have assumed the Master Servicer’s
responsibilities and obligations under the Master Servicing Agreement.
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ARTICLE X
DEFAULT
Section 10.01. Events of Default by Master Servicer.
The happening of any of the following events shall constitute a default (“Event of Default”)
by the Master Servicer under the Master Servicing Agreement:
(a) Any failure on the part of the Master Servicer to make when due any of the advances or to
perform any other obligations required under Article V above;
(b) Any failure on the part of the Master Servicer to make when due any payment or to perform
any other obligations required under Article VI above;
(c) Any failure on the part of the Master Servicer duly to observe or perform in any material
respect any covenants or conditions (other than those referred to in Section 10.01(a) and 10.01(b)
above) to be performed or observed by it in the Master Servicing Agreement which continues uncured
for a period of 45 days after the date on which the Trustee shall have given to the Master Servicer
written notice of such failure and demanding that such default be cured;
(d) Any involuntary petition in bankruptcy or any other similar petition shall be filed
against the Master Servicer seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future federal, state or other
statute, law or regulation, and shall remain undismissed for 60 days, or if any custodian, trustee,
receiver or liquidator of all or any substantial part of the assets of the Master Servicer shall be
appointed or take possession of such assets without the consent or acquiescence of the Master
Servicer and such appointment remains unvacated for 60 days;
(e) The Master Servicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of, or relating to, the Master Servicer, or all or substantially all of the
Master Servicer’s property;
(f) The Master Servicer shall admit in writing its inability to pay its debts generally as
they become due, file a petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(g) Any Rating Agency shall lower or give written notice to lower the then current rating of
the Securities because the existing or prospective financial condition or mortgage loan servicing
capability of the Master Servicer is insufficient to maintain the then current rating of the
Securities.
In case of any Event of Default, the Trustee or the Issuing Entity upon written approval of
the Trustee may terminate all authority, power and rights of the Master
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Servicer under the Master Servicing Agreement, and all rights, power and authority of the
Master Servicer shall automatically and without further action by any Person pass to and be vested
in the Trustee. Without limiting the generality of the foregoing, the Trustee is hereby authorized
and empowered to execute and deliver on behalf of the Master Servicer, as the Master Servicer’s
attorney-in-fact, any and all documents and other instruments, and to do or accomplish all other
acts or things that in the Trustee’s sole and absolute judgment may be necessary or appropriate to
effect such termination. Notwithstanding the foregoing, upon any such termination the Master
Servicer shall do all things reasonably requested by the Trustee to effect the termination of the
Master Servicer’s responsibilities, rights and powers hereunder, including, without limitation,
providing to the Trustee all documents and records reasonably requested by the Trustee to enable
the Trustee or its designee to assume and carry out the duties and obligations that otherwise were
to have been performed and carried out by the Master Servicer hereunder but for such termination.
Section 10.02. Other Remedies of Trustee.
Upon any Event of Default, the Trustee, in addition to the rights specified in Section 10.01,
shall have the right, in its own name and as “Trustee”, to take all actions now or hereafter
existing at law, in equity or by statute to enforce its rights and remedies, of the Securityholders
(including the institution and prosecution of all judicial, administrative and other proceedings
and the filings of proofs of claim and debt in connection therewith). No remedy provided for by
the Master Servicing Agreement shall be exclusive of any other remedy, and each and every remedy
shall be cumulative and in addition to any other remedy and no delay or omission to exercise any
right or remedy shall impair any such right or remedy or shall be deemed to be a waiver of any
Event of Default.
ARTICLE XI
DUTIES OF THE MASTER SERVICER
Section 11.01. General Bond Administration.
The Master Servicer shall perform (or supervise the performance of) the following duties on
behalf of the Issuing Entity (unless otherwise specified, references in this subsection are to
Sections of the Indenture and each capitalized term used in this Section 11.01 and not otherwise
defined shall have the meaning ascribed to it in the Indenture):
(i) cause each Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument specifying the responsibilities of such Paying Agent in accordance
with the provisions of Section 9.03 (Section 9.03);
(ii) prepare and cause to be delivered to the Trustee the annual written compliance
statement (Section 9.09);
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(iii) compensate and reimburse the Trustee pursuant to Section 7.07 (Section 7.07);
(iv) prepare (or cause to be prepared) any supplemental indenture or amendment to the
Indenture to be executed subsequent to the Closing Date (and documents required to accompany
them) as the Issuing Entity or Trustee may determine to be necessary or appropriate
(Sections 10.01 and 10.02);
(v) prepare and deliver notices to the Trustee for execution as necessary, distribute
such notices and prepare such other information and documents as may be required in
connection with any optional redemption of the Bonds (Sections 11.01, 11.03 and 11.04);
(vi) advise the Issuing Entity with respect to any proposed removal of the Trustee and,
if a successor or additional trustee is to be appointed, solicit and review bids, examine
the qualifications of bidders, submit to the Issuing Entity a list of qualified candidates
from which such appointment may be made by the Issuing Entity and draft any notice required
in connection with the appointment of a successor trustee (Sections 7.10 and 7.11);
(vii) if a successor to the Bond Registrar is to be appointed subsequent to the Closing
Date, solicit and review bids, examine the qualifications of bidders, and submit to the
Issuing Entity a list of qualified candidates from which such appointment may be made by the
Issuing Entity (Section 3.05);
(viii) subsequent to the Closing Date, prepare, file, record or deliver such
continuation statements, instruments of further assurance and such other instruments as
required by Section 9.05 of the Indenture and submit such instruments to the Issuing Entity
for execution and filing or delivery and advise the Issuing Entity when the Master Servicer
becomes aware of a necessity to take other action to protect the Trust Estate (Section
9.05);
(ix) cause all Opinions of Counsel required by Section 9.06 to be prepared and
delivered to the Issuing Entity for delivery to the Trustee (Section 9.06);
(x) prepare documents necessary for the satisfaction and discharge of the Indenture,
submit such documents to the Issuing Entity and (upon execution by the Issuing Entity)
deliver and (as necessary) record such documents (Section 5.01);
(xi) prepare and deliver to the Issuing Entity for distribution any notifications
required in connection with any election by the Issuing Entity to defease the Bonds (Section
5.01);
(xii) prepare all documents required in connection with any Grant of Substitute
Mortgage Collateral and submit such documents to the Issuing Entity
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for execution, obtain any Opinions of Counsel required in connection therewith, and
prepare any notices required in connection with the issuance of a replacement Guaranteed
Investment Contract and deliver such notices to the Issuing Entity (Section 3.11);
(xiii) prepare (or cause to be prepared) certificates or opinions with respect to
compliance with the Indenture and submit such certificates or opinions to the Issuing Entity
for execution (Section 15.01 );
(xiv) prepare and cause to be filed all reports required to be filed pursuant to
Section 8.04 (Section 8.04);
(xv) compile and render all Accounting Reports, Interest Payment Date Reports and
Collateral Valuation Reports required pursuant to Section 12.09 (Section 12.09);
(xvi) cause to be delivered to the Trustee the Yearly Accountants’ Certificates
(Sections 13.01(f));
(xvii) make any required corrections in Collateral Valuation and Accounting Reports
(Section 13.01(h));
(xviii) cause to be delivered to the Trustee all Accountants’ Certificates, written
instructions, and other documents required to disburse excess funds or release Mortgage
Collateral from the Trust Estate (Section 13.05); and
(xix) notify the Rating Agencies of any events of which the Issuing Entity is required
to give notice pursuant to the Indenture.
Section 11.02. REMIC Bond Administration.
With respect to a Series of Bonds for which the Issuing Entity has made (or intends to make) a
REMIC Election, the Master Servicer shall perform (or supervise the performance of), on behalf of
the Issuing Entity, the following duties relating to federal, state, and local tax compliance of
the REMIC:
(i) the preparation of and filing (after execution by the Issuing Entity or other person, as
necessary) with the Internal Revenue Service or other taxing authority any and all tax or
information returns or reports required to be filed by the REMIC Pool that are due after the
Closing Date, including any Forms 8281 (collectively, “Post-Closing Reports and Returns”) in the
time and manner required by the Code, applicable regulations or procedures thereunder, or
equivalent provisions of state or local law;
(ii) the making of an election for the REMIC Pool to be treated as a REMIC in the time
and manner required by the Code or applicable regulations or procedures thereunder;
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(iii) the provision of advice and instruction to the Issuing Entity as to how to
conduct the affairs of the REMIC Pool in a manner consistent with applicable provisions of
the Code and regulations thereunder in connection with maintaining the status of the REMIC
Pool as a REMIC (including with respect to the termination of the REMIC and, in connection
with the termination of the REMIC, the preparation of a plan of liquidation of the REMIC
Pool at the appropriate time);
(iv) the acquisition and retention of ownership of a nominal principal amount of any
residual interest Bond or residual interest certificate and the performance of the duties of
the REMIC “tax matters person” under the Code;
(v) the provision of advice and instruction to the Issuing Entity with respect to all
requirements for any exemption from withholding (that the Master Servicer reasonably
believes to be available) of federal or state income taxes with respect to the Bonds
including the filing of any related Post-Closing Reports and Returns and the acquisition
Section 11.03. Additional Bond Administration Rights and Duties of Master Servicer.
The Master Servicer will provide such additional reports, statements and other information
relating to the Securities to the Issuing Entity, the Trustee, or the Securityholders, as may
reasonably be requested by the Issuing Entity.
Section 11.04. Additional Costs Payable by Master Servicer.
The Master Servicer will pay all Trustee’s fees associated with the Series Bonds and will bear
all costs associated with the performance of the Master Servicer’s duties hereunder, including (but
not limited to) accountants’ fees, attorneys’ fees, internal costs, and costs associated with the
enforcements and the Pool Insurance Policies.
ARTICLE XII
MISCELLANEOUS
Section 12.01. No Assignment or Delegation of Duties by Master Servicer.
Except as expressly provided in the Master Servicing Agreement, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges under the Master Servicing Agreement
to any other Person, or delegate to or subcontract with, or authorize or appoint any other Person
to perform any of the duties, covenants or obligations to be performed by the Master Servicer
hereunder, without the prior written consent of the Trustee, and any agreement, instrument or act
purporting to effect any such assignment, transfer, delegation or appointment shall be void.
Notwithstanding the foregoing, the Master Servicer shall have the right without the prior written
consent of the Trustee and hereby agrees to delegate to or subcontract with or authorize or appoint
an affiliate of the Master Servicer to perform and carry out any duties,
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covenants or obligations to be performed and carried out by the Master Servicer hereunder. In
no case, however, except an assignment pursuant to Section 9.02 of these Standard Terms, shall any
permitted assignment relieve the Master Servicer of any liability to the Trustee, FMSC, or the
Issuing Entity hereunder.
Section 12.02. Binding Nature of Agreement; Assignment.
The Master Servicing Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
Section 12.03. Entire Agreement.
The Master Servicing Agreement, which includes these Standard Terms and the Sales/Servicing
Agreement, contains the entire agreement and understanding among the parties hereto with respect to
the subject matter hereof, and supersedes all prior and contemporaneous agreements, understanding,
inducements and conditions, express or implied, oral or written, or any nature whatsoever with
respect to the subject matter hereof. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
Section 12.04. Amendments and Supplements.
These Standard Terms may not be modified, amended or superseded other than by an agreement in
writing among the Master Servicer, FMSC, and the Issuing Entity which has been approved in writing
by the Trustee. The Master Servicer shall use its best efforts promptly to provide notice to the
Rating Agency if these Standard Terms are so modified, amended or superseded.
Section 12.05. Controlling Law.
The Master Servicing Agreement and all questions relating to its validity, interpretation,
performance and enforcement, shall be governed by and construed, interpreted and enforced in
accordance with the laws of the Commonwealth of Virginia, notwithstanding any Virginia or other
choice-of-law provisions to the contrary.
Section 12.06. Indulgences, No Waivers.
Neither the failure nor any delay on the part of a party to exercise any right, remedy, power
or privilege under the Master Servicing Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any
right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such
right, remedy, power or privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have granted such waiver.
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Section 12.07. Titles Not to Affect Interpretation.
The titles of paragraphs and subparagraphs contained in these Standard Terms are for
convenience only, and they neither form a part of these Standard Terms nor are they to be used in
the construction or interpretation hereof.
Section 12.08. Attorney’s Fees.
If either party hereto shall bring suit against the other as a result of any alleged breach or
failure by the other party to fulfill or perform any covenants or obligations under the Master
Servicing Agreement or in any deed, instrument or other document delivered pursuant hereto, or to
seek declaratory relief as to the rights or obligations of either party hereto, then in such event,
the prevailing party in such action shall, in addition to any other relief granted or awarded by
the Court, be entitled to judgment for reasonable attorneys’ fees incurred by reason of such action
and all costs of suit and those incurred in preparation thereof, at both trial and appellate
levels.
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Exhibits to
Standard Terms to Master Servicing Agreement
Standard Terms to Master Servicing Agreement
| Exhibits | Title | |
Exhibit A
|
Monthly Bond Remittance Report | |
Exhibit B
|
Relevant Servicing Criteria | |
Exhibit C
|
Form 10-D, Form 8-K and Form 10-K Reporting Responsibility | |
Exhibit D
|
Form of Additional Disclosure Notification | |
Exhibit E
|
Form of Servicer Certification |
EXHIBIT A
MONTHLY REMITTANCE REPORT
The Monthly Remittance Report forwarded to the Issuing Entity and the Trustee for Mortgage
Loans will set forth the information set forth below.
| A. | Calculation of the monthly remittance to the Trustee (including payments of principal and interest and all other cash adjustments) (i) for each Mortgage Loan, and (ii) for all Mortgage Loans in the aggregate. | ||
| B. | The aggregate remaining scheduled principal balance of the Mortgage Loans. | ||
| C. | The calculation of the Master Servicing Fee due for the current month. | ||
| D. | For any uninsured loss, a schedule setting forth the loan number, the Borrower’s last name, the amount of the uninsured loss and an explanation; | ||
| E. | If requested by the Issuing Entity, for any principal prepayment (curtailment or liquidation), a schedule setting forth the loan number, Borrower’s last name, the amount of the principal prepayment, and, if a curtailment, whether such curtailment is deemed to have been paid prior to the first day of the remittance month. | ||
| F. | Calculation and required balance of the Month-End Reserve Fund. |
EXHIBIT B
RELEVANT SERVICING CRITERIA
| Reg. AB Item 1122(d) | Securities | |||||||||||||||
| Servicing Criteria* | Servicer | Trustee | Custodian | Paying Agent | Master Servicer | Administrator | ||||||||||
| (1) | General Servicing Considerations | |||||||||||||||
| (i) | monitoring performance or other triggers and events of default | X | X | X | ||||||||||||
| (ii) | monitoring performance of vendors of activities outsourced | X | ||||||||||||||
| (ii) | maintenance of back-up servicer for pool assets | |||||||||||||||
| (iv) | fidelity bond and E&O policies in effect | X | X | |||||||||||||
| (2) | Cash Collection and Administration | |||||||||||||||
| (i) | timing of deposits to custodial account | X | X | X | X | |||||||||||
| (ii) | wire transfers to investors by authorized personnel | X | X | X | ||||||||||||
| (iii) | advances or guarantees made, reviewed and approved as required | X | X | |||||||||||||
| (iv) | accounts maintained as required | X | X | X | ||||||||||||
| (v) | accounts at federally insured depository institutions |
X | X | X | ||||||||||||
| (vi) | unissued checks safeguarded | X | X | X | ||||||||||||
| (vii) | monthly reconciliations of accounts | X | X | X | X | |||||||||||
| (3) | Investor Remittances and Reporting | |||||||||||||||
| (i) | investor reports | X | X | X | ||||||||||||
| (ii) | remittances | X | X | X | ||||||||||||
| (iii) | proper posting of distributions | X | X | X | ||||||||||||
| (iv) | reconciliation of remittances and payment statements | X | X | X | X | |||||||||||
| (4) | Pool Asset Administration | |||||||||||||||
| (i) | maintenance of pool collateral | X | X | |||||||||||||
| (ii) | safeguarding of pool assets/documents | X | X | |||||||||||||
| (iii) | additions, removals and substitutions of pool assets | X | ||||||||||||||
| (iv) | posting and allocation of pool asset payments to pool assets | X | ||||||||||||||
| (v) | reconciliation of servicer records | X | ||||||||||||||
| (vi) | modifications or other changes to terms of pool assets | X | ||||||||||||||
| (vii) | loss mitigation and recovery actions | X | ||||||||||||||
| (viii) | records regarding collection efforts |
X | ||||||||||||||
| (ix) | adjustments to variable interest rates on pool assets | X | ||||||||||||||
| (x) | matters relating to funds held in trust for obligors | X | ||||||||||||||
| (xi) | payments made on behalf of
obligors (such as for taxes or insurance) |
X | ||||||||||||||
| (xii) | late payment penalties with respect to payments made on behalf of obligors | X | ||||||||||||||
| (xiii) | records with respect to payments made on behalf of obligors | X | ||||||||||||||
| (xiv) | recognition and recording of delinquencies, charge-offs and uncollectible accounts | X | ||||||||||||||
| (xv) | maintenance of external credit enhancement or other support | X | ||||||||||||||
| * | The descriptions of the Item 1122(d) servicing criteria use key words and phrases and are not verbatim recitations of the servicing criteria. Refer to Regulation AB, Item 1122 for a full description of servicing criteria. |
EXHIBIT C
FORM 10-D, FORM 8-K AND FORM 10-K REPORTING RESPONSIBILITY
ADDITIONAL FORM 10-D DISCLOSURE
| Item on Form 10-D | Party Responsible | |
Item 1: Distribution and Pool |
||
Performance Information |
||
Information included in the [Monthly Statement] |
Servicer Master Servicer |
|
Any information required by 1121 which is
NOT included on the [Monthly Statement]
|
FMSC | |
Item 2: Legal Proceedings |
||
Any legal proceeding pending against
the following entities or their respective
property, that is material to
Certificateholders, including any
proceedings known to be contemplated by
governmental authorities: |
||
§ Issuing Entity (Trust Fund)
|
Trustee, Master Servicer and FMSC | |
§ Sponsor (Seller)
|
Seller or FMSC | |
§ Depositor
|
FMSC | |
§ Trustee
|
Trustee | |
§ Master Servicer
|
Master Servicer | |
§ Custodian
|
Custodian | |
§ 1110(b) Originator
|
FMSC | |
§ Any 1108(a)(2) Servicer (other than the Master Servicer or Securities Administrator) |
Servicer | |
§ Any other party contemplated by 1100(d)(1)
|
FMSC | |
Item 3: Sale of Securities and Use of
Proceeds |
FMSC | |
Information from Item 2(a) of Part II
of Form 10-Q: |
||
With respect to any sale of securities by
the sponsor, depositor or issuing entity,
that are backed by the same asset pool or
are otherwise issued by the issuing entity,
whether or not registered, provide the sales
and use of proceeds information in Item 701
of Regulation S-K. Pricing information |
ADDITIONAL FORM 10-D DISCLOSURE
| Item on Form 10-D | Party Responsible | |
be omitted if securities were not
registered.
|
||
Item 4: Defaults Upon Senior |
||
Securities |
FMSC | |
Information from Item 3 of Part II of
Form 10-Q: |
||
Report the occurrence of any Event of
Default (after expiration of any grace
period and provision of any required notice)
|
Trustee | |
Item 5: Submission of Matters to a |
||
Vote
of Security Holders
|
||
Information from Item 4 of Part II of
Form 10-Q
|
Trustee | |
Item 6: Significant Obligors of Pool |
FMSC | |
Assets |
||
Item 1112(b) – Significant Obligor
Financial Information*
|
||
* This information need only be reported on
the Form 10-D for the distribution period in
which updated information is required
pursuant to the Item. |
||
Item 7: Significant Enhancement |
||
Provider Information |
||
Item 1114(b)(2) – Credit Enhancement
Provider Financial Information* |
||
§ Determining applicable disclosure threshold
|
FMSC | |
§ Requesting required financial information
(including any required accountants’ consent
to the use thereof) or effecting
incorporation by reference
|
FMSC | |
Item 1115(b) – Derivative Counterparty
Financial Information* |
||
§ Determining current maximum probable exposure |
FMSC | |
§ Determining current significance percentage
|
FMSC | |
§ Requesting required financial information
(including any required accountants’ consent
to the use thereof) or effecting
incorporation by reference
|
FMSC | |
* This information need only be reported on |
||
ADDITIONAL FORM 10-D DISCLOSURE
| Item on Form 10-D | Party Responsible | |
the Form 10-D for the distribution period in
which updated information is required
pursuant to the Items. |
||
Item 8: Other Information |
||
Disclose any information required to be
reported on Form 8-K during the period
covered by the Form 10-D but not reported
|
Any party responsible for the applicable Form 8-K Disclosure item | |
Item 9: Exhibits |
||
Monthly Statement to Certificateholders
|
Master Servicer | |
Exhibits required by Item 601 of Regulation
S-K, such as material agreements
|
FMSC |
ADDITIONAL FORM 10-K DISCLOSURE
| Item on Form 10-K | Party Responsible | |
Item 1B: Unresolved Staff Comments
|
FMSC | |
Item 9B:
Other
Information |
||
Disclose any information required to be
reported on Form 8-K during the fourth quarter
covered by the Form 10-K but not reported
|
Any party responsible for disclosure items on Form 8-K | |
Item 15: Exhibits, Financial Statement
|
Master Servicer | |
Schedules
|
FMSC | |
Reg AB Item 1112(b): Significant |
||
Obligors of Pool Assets |
||
Significant Obligor Financial Information*
|
FMSC | |
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to the
Item. |
||
Reg AB Item 1114(b)(2): Credit |
||
Enhancement Provider Financial |
||
Information |
||
§ Determining applicable disclosure threshold
|
FMSC | |
§ Requesting required financial information
(including any required accountants’ consent to
the use thereof) or effecting incorporation by
reference
|
FMSC | |
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to the
Items. |
||
Reg AB Item 1115(b): Derivative |
||
Counterparty Financial Information |
||
§ Determining current maximum probable exposure |
FMSC | |
§ Determining current significance percentage
|
FMSC | |
§ Requesting required financial information
(including any required accountants’ consent to
the use thereof) or effecting incorporation by
reference
|
FMSC | |
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to the
Items. |
ADDITIONAL FORM 10-K DISCLOSURE
| Item on Form 10-K | Party Responsible | |
Reg AB Item 1117: Legal Proceedings |
||
Any legal proceeding pending against the
following entities or their respective property,
that is material to Certificateholders, including
any proceedings known to be contemplated by
governmental authorities: |
||
§ Issuing Entity (Trust Fund)
|
Trustee, Master Servicer and FMSC | |
§ Sponsor (Seller)
|
Seller or FMSC | |
§ Depositor
|
Depositor | |
§ Trustee
|
[FMSC/Trustee] | |
§ Master Servicer
|
Master Servicer | |
§ Custodian
|
Custodian | |
§ 1110(b) Originator
|
FMSC | |
§ Any 1108(a)(2) Servicer (other than the Master Servicer or Securities Administrator) |
Servicer | |
§ Any other party contemplated by 1100(d)(1)
|
FMSC | |
Reg AB Item 1119: Affiliations and |
||
Relationships |
||
Whether (a) the Sponsor (Seller), Depositor
or Issuing Entity is an affiliate of the
following parties, and (b) to the extent known
and material, any of the following parties are
affiliated with one another:
|
FMSC as to (a) Sponsor/Seller as to (a) | |
§ Master Servicer
|
Master Servicer | |
§ Trustee
|
Trustee | |
§ Any other 1108(a)(3) servicer
|
Servicer | |
§ Any 1110 Originator
|
FMSC/Sponsor | |
§ Any 1112(b) Significant Obligor
|
FMSC/Sponsor | |
§ Any 1114 Credit Enhancement Provider
|
FMSC/Sponsor | |
§ Any 1115 Derivate Counterparty Provider
|
FMSC/Sponsor | |
§ Any other 1101(d)(1) material party
|
FMSC/Sponsor | |
Whether there are any “outside the ordinary
course business arrangements” other than would be
obtained in an arm’s length transaction between
(a) the Sponsor (Seller), Depositor or Issuing
Entity on the one hand, and (b) any of the
following parties (or their affiliates) on the
other hand, that exist currently or within the
past two years and that are material to a
Certificateholder’s understanding of the
Certificates:
|
FMSC as to (a) Sponsor/Seller as to (a) | |
§ Master Servicer
|
Master Servicer | |
§ Trustee
|
Trustee |
ADDITIONAL FORM 10-K DISCLOSURE
| Item on Form 10-K | Party Responsible | |
§ Any other 1108(a)(3) servicer
|
Servicer | |
§ Any 1110 Originator
|
FMSC/Sponsor | |
§ Any 1112(b) Significant Obligor
|
FMSC/Sponsor | |
§ Any 1114 Credit Enhancement Provider
|
FMSC/Sponsor | |
§ Any 1115 Derivate Counterparty Provider
|
FMSC/Sponsor | |
§ Any other 1101(d)(1) material party
|
FMSC/Sponsor | |
Whether there are any specific relationships
involving the transaction or the pool assets
between (a) the Sponsor (Seller), Depositor or
Issuing Entity on the one hand, and (b) any of
the following parties (or their affiliates) on
the other hand, that exist currently or within
the past two years and that are material:
|
Depositor as to (a) Sponsor/Seller as to (a) | |
§ Master Servicer
|
Master Servicer | |
§ Trustee
|
[FMSC/Trustee] | |
§ Any other 1108(a)(3) servicer
|
Servicer | |
§ Any 1110 Originator
|
FMSC/Sponsor | |
§Any 1112(b) Significant Obligor
|
FMSC/Sponsor | |
§Any 1114 Credit Enhancement Provider
|
FMSC/Sponsor | |
§ Any 1115 Derivate Counterparty Provider
|
FMSC/Sponsor | |
§ Any other 1101(d)(1) material party
|
FMSC/Sponsor |
FORM 8-K DISCLOSURE INFORMATION
| Item on Form 8-K | Party Responsible | |
Item 1.01- Entry into a Material |
||
Definitive Agreement |
||
Disclosure is required regarding
entry into or amendment of any definitive
agreement that is material to the
securitization, even if depositor is not
a party. |
||
Examples: servicing agreement, custodial
agreement. |
||
Note: disclosure not required as to
definitive agreements that are fully
disclosed in the prospectus
|
All parties | |
Item 1.02- Termination of a Material |
||
Definitive Agreement |
||
Disclosure is required regarding
termination of any definitive agreement
that is material to the securitization
(other than expiration in accordance with
its terms), even if depositor is not a
party. |
||
Examples: servicing agreement, custodial
agreement.
|
All parties | |
Item 1.03- Bankruptcy or Receivership |
||
Disclosure is required regarding the
bankruptcy or receivership, with respect
to any of the following:
|
FMSC | |
§ Sponsor (Seller)
|
FMSC/Sponsor (Seller) | |
§ Depositor
|
FMSC | |
§ Master Servicer
|
Master Servicer | |
§ Affiliated Servicer
|
Servicer | |
§ Other Servicer servicing 20% or more of
the pool assets at the time of the report
|
Servicer | |
§ Other material servicers
|
Servicer | |
§ Trustee
|
Trustee | |
§ Significant Obligor
|
FMSC | |
§ Credit Enhancer (10% or more)
|
FMSC | |
§ Derivative Counterparty
|
FMSC | |
• Custodian
|
Custodian |
FORM 8-K DISCLOSURE INFORMATION
| Item on Form 8-K | Party Responsible | |
Item 2.04- Triggering Events that |
FMSC | |
Accelerate or Increase a Direct |
Master Servicer | |
Financial Obligation or an Obligation |
||
under an Off-Balance Sheet |
||
Arrangement |
||
Includes an early amortization,
performance trigger or other event,
including event of default, that would
materially alter the payment
priority/distribution of cash
flows/amortization schedule. |
||
Disclosure will be made of events other
than waterfall triggers which are
disclosed in the monthly statements to
the certificateholders.
|
||
Item 3.03- Material Modification to
Rights of Security Holders |
Master Servicer | |
| Trustee | ||
Disclosure is required of any
material modification to documents
defining the rights of
Certificateholders, including the Pooling
and Servicing Agreement.
|
FMSC | |
Item 5.03- Amendments of Articles of |
||
Incorporation or Bylaws; Change of |
||
Fiscal Year |
||
Disclosure is required of any
amendment “to the governing documents of
the issuing entity”.
|
FMSC | |
Item 6.01- ABS Informational and |
||
Computational Material
|
FMSC | |
Item 6.02- Change of Servicer or |
Master Servicer/FMSC/ | |
Securities Administrator |
Servicer/Trustee | |
Requires disclosure of any removal,
replacement, substitution or addition of
any master servicer, affiliated servicer,
other servicer servicing 10% or more of
pool assets at time of report, other
material servicers or trustee.
|
||
Reg AB disclosure about any new servicer
or master servicer is also required.
|
Servicer/Master Servicer/FMSC | |
Reg AB disclosure about any new Trustee
is also required.
|
Trustee |
FORM 8-K DISCLOSURE INFORMATION
| Item on Form 8-K | Party Responsible | |
Item 6.03- Change in Credit |
||
Enhancement or External Support |
||
Covers termination of any
enhancement in manner other than by its
terms, the addition of an enhancement, or
a material change in the enhancement
provided. Applies to external credit
enhancements as well as derivatives.
|
FMSC/Trustee | |
Reg AB disclosure about any new
enhancement provider is also required.
|
FMSC | |
Item 6.04- Failure to Make a
|
Master Servicer | |
Required Distribution
|
Trustee | |
Item 6.05- Securities Act Updating
Disclosure |
||
If any material pool characteristic
differs by 5% or more at the time of
issuance of the securities from the
description in the final prospectus,
provide updated Reg AB disclosure about
the actual asset pool.
|
FMSC | |
If there are any new servicers or
originators required to be disclosed
under Regulation AB as a result of the
foregoing, provide the information called
for in Items 1108 and 1110 respectively.
|
FMSC | |
Item 7.01- Reg FD Disclosure
|
All parties | |
Item 8.01- Other Events |
||
Any event, with respect to which
information is not otherwise called for
in Form 8-K, that the registrant deems of
importance to certificateholders.
|
FMSC | |
Item 9.01- Financial Statements and
|
Responsible party for reporting/disclosing the financial statement or |
|
Exhibits
|
exhibit |
EXHIBIT D
FORM OF ADDITIONAL DISCLOSURE NOTIFICATION
Additional Disclosure Notification
[Master Servicer]
[FMSC]
Attn: Corporate Trust Services — Fremont 200[ ]-[ ]-SEC REPORT PROCESSING
RE: **Additional Form [ ] Disclosure**Required
Ladies and Gentlemen:
In accordance with Section [ ] of the Pooling and Servicing Agreement, dated as of [ ] [ ],
200[ ], among [ ], as [ ], [ ], as [ ], [ ], as [ ] and [ ], as [ ]. The Undersigned, as
[ ], hereby notifies you that certain events have come to our attention that [will][may] need to
be disclosed on Form [ ].
Description of Additional Form [ ] Disclosure:
List of Any Attachments hereto to be included in the Additional Form [ ] Disclosure:
Any inquiries related to this notification should be directed to [ ], phone number: [ ];
email address: [ ].
| [NAME OF PARTY] as [role] |
||||||
| By: | ||||||
| Title: | ||||||
EXHIBIT E
Form of Servicer Certification
