Form of Servicing Agreement For HELOC Transactions
Form
of Servicing Agreement
For HELOC Transactions |
[________________],
as
Servicer
[________________],
as
Seller
and
[________________],
as
Master
Servicer
_____________________________
Xxxxxxxxx
Mortgage Securities Corporation
[Name
of
Series]
Dated
as
of [________] [__], 20[__]
_____________________________
TABLE
OF CONTENTS
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PAGE
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ARTICLE
I. DEFINITIONS
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2
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ARTICLE
II. SELLER’S ENGAGEMENT OF SERVICER TO PERFORM SERVICING RESPONSIBILITIES
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11
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Section
2.01
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Contract
for Servicing; Possession of Servicing Files.
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11
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Section
2.02
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Books
and Records.
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12
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ARTICLE
III. SERVICING OF THE MORTGAGE LOANS
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13
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Section
3.01
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Servicer
to Service.
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13
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Section
3.02
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Collection
of Revolving Credit Loan Payments.
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16
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Section
3.03
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Establishment
of and Deposits to Custodial Account.
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16
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Section
3.04
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Permitted
Withdrawals From Custodial Account.
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18
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Section
3.05
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Establishment
of and Deposits to Escrow Account.
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19
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Section
3.06
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Permitted
Withdrawals From Escrow Account.
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20
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Section
3.07
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Reserved.
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20
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Section
3.08
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Fidelity
Bond and Errors and Omissions Insurance.
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20
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Section
3.09
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Notification
of Adjustments.
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21
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Section
3.10
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Completion
and Recordation of Assignments of Mortgage.
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21
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Section
3.11
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Protection
of Accounts.
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21
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Section
3.12
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Payment
of Taxes, Insurance and Other Charges.
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22
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Section
3.13
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Maintenance
of Hazard Insurance.
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22
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Section
3.14
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Maintenance
of Mortgage Blanket Insurance.
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23
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Section
3.15
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Restoration
of Mortgaged Property.
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23
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Section
3.16
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Management
of REO Property.
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23
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Section
3.17
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Real
Estate Owned Reports.
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24
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Section
3.18
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MERS.
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24
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Section
3.19
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Waiver
of Prepayment Penalty Amounts.
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25
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Section
3.20
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Safeguarding
Customer Information.
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26
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Section
3.21
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Realization
Upon Specially Serviced Revolving Credit Loans
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26
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ARTICLE
IV PAYMENTS TO MASTER SERVICER
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26
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Section
4.01
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Remittances.
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26
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Section
4.02
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Statements
to Master Servicer.
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27
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Section
4.03
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Monthly
Advances by Servicer.
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28
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ARTICLE
V. GENERAL SERVICING PROCEDURES
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29
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Section
5.01
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Servicing
Compensation.
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29
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Section
5.02
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Annual
Audit Report.
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29
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Section
5.03
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Annual
Officer’s Certificate.
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30
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Section
5.04
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Compliance
with Applicable Servicing Criteria.
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30
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Section
5.05
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Transfers
of Mortgaged Property.
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31
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ARTICLE
VI. REPRESENTATIONS, WARRANTIES AND
AGREEMENTS
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32
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Section
6.01
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Representations,
Warranties and Agreements of the Servicer.
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32
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ii
Section
6.02
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Remedies
for Breach of Representations and Warranties of the Servicer.
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33
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Section
6.03
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Additional
Indemnification by the Servicer; Third Party Claims.
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34
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Section
6.04
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[Reserved].
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35
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Section
6.05
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Indemnification
with Respect to Certain Taxes and Loss of REMIC Status.
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35
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Section
6.06
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Reporting
Requirements of the Commission and Indemnification.
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35
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ARTICLE
VII. THE SERVICER
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36
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Section
7.01
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Merger
or Consolidation of the Servicer.
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36
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Section
7.02
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Limitation
on Liability of the Servicer and Others.
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37
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Section
7.03
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Limitation
on Resignation and Assignment by the Servicer.
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37
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Section
7.04
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Subservicing
Agreements and Successor Subservicer.
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38
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ARTICLE
VIII. TERMINATION
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39
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Section
8.01
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Termination
for Cause.
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39
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Section
8.02
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Termination
Without Cause.
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41
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ARTICLE
IX. MISCELLANEOUS PROVISIONS
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41
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Section
9.01
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Successor
to the Servicer.
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41
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Section
9.02
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Costs.
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43
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Section
9.03
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Notices.
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43
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Section
9.04
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Severability
Clause.
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45
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Section
9.05
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No
Personal Solicitation.
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45
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Section
9.06
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Counterparts.
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45
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Section
9.07
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Place
of Delivery and Governing Law.
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45
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Section
9.08
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Further
Agreements.
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46
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Section
9.09
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Intention
of the Parties.
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46
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Section
9.10
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Successors
and Assigns; Assignment of Servicing Agreement.
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46
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Section
9.11
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Assignment
by the Seller.
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46
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Section
9.12
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Waivers.
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46
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Section
9.13
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Exhibits.
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46
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Section
9.14
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General
Interpretive Principles.
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47
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Section
9.15
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Reproduction
of Documents.
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47
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Section
9.16
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Protection
of Confidential Information.
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47
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Section
9.17
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Amendment.
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48
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Exhibit
D-1 1
EXHIBIT
A
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Revolving
Credit Loan Schedule
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EXHIBIT
B
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Custodial
Account Certification
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EXHIBIT
C
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Escrow
Account Certification
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EXHIBIT
D-1
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Master
Servicer Data Field Requirements (Standard Layout)
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EXHIBIT
D-2
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Master
Servicer Default File Format
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EXHIBIT
E
|
Form
of Certification to be Provided to the Depositor, the Master Servicer
and
the Indenture Trustee by the
Servicer
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iii
THIS
SERVICING AGREEMENT (this “Agreement”), entered into as of the [__] day of
[________], 20[__], by and among [____________], a [____________]
(“[____________]” or the “Seller”), [____________], a [____________] (the
“Servicer”), and [____________], as Master Servicer under the Sale and Servicing
Agreement (as defined herein), recites and provides as follows:
RECITALS
[ADD
ANY
NECESSARY RECITALS]
WHEREAS,
the Seller has conveyed certain revolving home equity line of credit mortgage
loans identified on Exhibit A hereto (the Revolving Credit Loans”) on a
servicing-retained basis to Xxxxxxxxx Mortgage Securities Corporation, a
Delaware corporation (the “Depositor”), pursuant to a revolving credit loan
purchase agreement, which in turn has conveyed the Revolving Credit Loans to
[______________] (the “Trust”), which was created pursuant to the Trust
Agreement (as defined herein), pursuant to the terms of the Sale and Servicing
Agreement (as defined herein).
WHEREAS,
from time to time certain other revolving home equity line of credit mortgage
loans conveyed by the Depositor to the Trust under the Sale and Servicing
Agreement on the Closing Date and serviced by other servicers may subsequent
to
the Closing Date be transferred to the Servicer for servicing under this
Agreement and Exhibit A hereto will be amended to include such revolving credit
loans which will then be “Revolving Credit Loans” under this
Agreement.
WHEREAS,
the Seller desires that the Servicer service the Revolving Credit Loans pursuant
to this Agreement, and the Servicer has agreed to do so, subject to the right
of
the Seller and of the Master Servicer to terminate the rights and obligations
of
the Servicer hereunder at any time and to the other conditions set forth
herein.
WHEREAS,
the Master Servicer shall be obligated under the Sale and Servicing Agreement,
among other things, to supervise the servicing of the Revolving Credit Loans
on
behalf of the Indenture Trustee, and shall have the right, under certain
circumstances, to terminate the rights and obligations of the Servicer under
this Servicing Agreement.
WHEREAS,
the Seller and the Servicer acknowledge and agree that the Seller will assign
all of its rights and delegate all of its obligations hereunder (excluding
the
Seller’s rights and obligations as owner of the servicing rights relating to the
Revolving Credit Loans) to the Depositor and the Depositor will assign all
of
its rights (but not the obligations, except as set forth in the Sale and
Servicing Agreement) hereunder to the Trust pursuant to the Sale and Servicing
Agreement, and that each reference herein (other than with respect to the
Seller’s ownership of the servicing rights) to the Seller is intended, unless
otherwise specified, to mean the Seller or the Trust, as assignee, whichever
is
the owner of the Revolving Credit Loans from time to time.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth
and
for other good and valuable consideration, the receipt and adequacy of which
are
hereby acknowledged, the Seller, the Servicer and the Master Servicer hereby
agree as follows:
ARTICLE
I.
DEFINITIONS
The
following terms are defined as follows (except as otherwise agreed in writing
by
the parties):
Accepted
Servicing Practices:
With
respect to any Revolving Credit Loan, those mortgage servicing practices of
prudent mortgage lending institutions that service mortgage loans of the same
type as such Revolving Credit Loan in the jurisdiction where the related
Revolving Credit Loan is located.
Adjustable
Rate Mortgage Loan:
A
Revolving Credit Loan serviced pursuant to this Agreement under which the
Mortgage Interest Rate is adjusted from time to time in accordance with the
terms and provisions of the related Mortgage Note.
Aggregate
Loan Balance:
At any
date of determination, the outstanding principal balance of the Revolving
Credit Loans serviced hereunder.
Agreement:
This
Servicing Agreement and all amendments hereof and supplements
hereto.
Ancillary
Income:
All
income derived from the Revolving Credit Loans, other than Servicing Fees and
Prepayment Penalty Amounts, including but not limited to late charges, fees
received with respect to checks or bank drafts returned by the related bank
for
non-sufficient funds, assumption fees, optional insurance administrative fees
and all other incidental fees and charges.
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the transfer of the Revolving
Credit Loan to the party indicated therein, which assignment, notice of transfer
or equivalent instrument may be in the form of one or more blanket assignments
covering the Revolving Credit Loans secured by Mortgaged Properties located
in
the same jurisdiction, if permitted by law.
Best
Efforts:
Efforts
determined to be reasonably diligent by the Seller or the Servicer, as the
case
may be, in its sole discretion. Such efforts do not require the Seller or the
Servicer, as the case may be, to enter into any litigation, arbitration or
other
legal or quasi-legal proceeding, nor do they require the Seller or the Servicer,
as the case may be, to advance or expend fees or sums of money in addition
to
those specifically set forth in this Agreement.
2
Business
Day:
Any day
other than (i) a Saturday or a Sunday or (ii) a day on which banking
institutions in [__________],[__________],[__________], New York, New York
or,
if other than New York, the city in which the corporate trust office of the
Indenture Trustee is located.
Certificates:
Any or
all of the Certificates issued pursuant to the Trust Agreement.
Closing
Date:
[________] [__], 20[__].
Code:
The
Internal Revenue Code of 1986, as it may be amended from time to time or any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Condemnation
Proceeds:
All
awards of settlements in respect of a Mortgaged Property, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Revolving Credit Loan
documents.
Costs:
For any
Person, any claims, losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses of such Person.
Credit
Advance Rate:
The
related per annum interest rate set forth in the related Mortgage Note with
respect to any Revolving Credit Loan.
Credit
Line:
With
respect to a Revolving Credit Loan, the maximum principal amount which may
be
advanced to a Mortgagor under the terms of the related Mortgage
Note.
Credit
Line Advance:
With
respect to a Revolving Credit Loan, a principal disbursement to a Mortgagor
under the terms of the related Mortgage Note (collectively, “Credit
Line Advances”).
Custodial
Account:
The
separate account or accounts created and maintained pursuant to Section
3.03.
Custodian:
Each of
[___________],[___________] and [___________] and their respective
successors.
Depositor:
Xxxxxxxxx Mortgage Securities Corporation or any successor in
interest.
Determination
Date:
With
respect to each Remittance Date, the [___] day of the month in which such
Remittance Date occurs, or, if such [___] day is not a Business Day, the next
succeeding Business Day.
Due
Date:
The day
of the month on which the Monthly Payment is due on a Revolving Credit Loan,
exclusive of any days of grace. With respect to the Revolving Credit Loans
for
which payment from the Mortgagor is due on a day other than the first day of
the
month, such Revolving Credit Loans will be treated as if the Monthly Payment
is
due on the first day of the immediately succeeding month.
3
Due
Period:
With
respect to each Remittance Date, the period commencing on the second day of
the
month immediately preceding the month of the Remittance Date and ending on
the
first day of the month of the Remittance Date.
Eligible
Deposit Account:
An
account that is maintained with a federal or state-chartered depository
institution or trust company that complies with the definition of Eligible
Institution.
Eligible
Institution:
Any of
the following:
(i)
an
institution whose:
(A) commercial
paper, short-term debt obligations, or other short-term deposits are rated
at
least “A-1+” or long-term unsecured debt obligations are rated at least “AA-” by
S&P, if the amounts on deposit are to be held in the account for no more
than 365 days; or
(B) commercial
paper, short-term debt obligations, demand deposits, or other short-term
deposits are rated at least “A-2” by S&P, if the amounts on deposit are to
be held in the account for no more than 30 days and are not intended to be
used
as credit enhancement. Upon the loss of the required rating set forth in this
clause (ii), the accounts shall be transferred immediately to accounts which
have the required rating. Furthermore, commingling by the Servicer is acceptable
at the A-2 rating level if the Servicer is a bank, thrift or depository and
provided the Servicer has the capability to immediately segregate funds and
commence remittance to an Eligible Deposit Account upon a downgrade;
or
(ii) the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity.
Eligible
Investments:
Any one
or more of the obligations and securities listed below which investment provides
for a date of maturity not later than the Determination Date in each
month:
(i)
direct
obligations of, and obligations fully guaranteed as to timely payment of
principal and interest by, the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America (“Direct
Obligations”);
(ii)
federal
funds, or demand and time deposits in, certificates of deposits of, or bankers’
acceptances issued by, any depository institution or trust company (including
U.S. subsidiaries of foreign depositories and the Indenture Trustee or any
agent
of the Indenture Trustee, acting in its respective commercial capacity)
incorporated or organized under the laws of the United States of America or
any
state thereof and subject to supervision and examination by federal or state
banking authorities, so long as at the time of investment or the contractual
commitment providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust company
(or,
in the case of a depository institution or trust company which is the principal
subsidiary of a holding company, the commercial paper or other short-term debt
or deposit obligations of such holding company or deposit institution, as the
case may be) have been rated by each Rating Agency in its highest short-term
rating category or one of its two highest long-term rating
categories;
4
(iii)
repurchase
agreements collateralized by Direct Obligations or securities guaranteed by
Xxxxxx Xxx, Xxxxxx Xxx or Xxxxxxx Mac with any registered broker/dealer subject
to Securities Investors’ Protection Corporation jurisdiction or any commercial
bank insured by the FDIC, if such broker/dealer or bank has an uninsured,
unsecured and unguaranteed obligation rated by each Rating Agency in its highest
short-term rating category;
(iv)
securities
bearing interest or sold at a discount issued by any corporation incorporated
under the laws of the United States of America or any state thereof which have
a
credit rating from each Rating Agency, at the time of investment or the
contractual commitment providing for such investment, at least equal to one
of
the two highest long-term credit rating categories of each Rating Agency;
provided,
however,
that
securities issued by any particular corporation will not be Eligible Investments
to the extent that investment therein will cause the then outstanding principal
amount of securities issued by such corporation and held as part of the Trust
to
exceed 20% of the sum of the Aggregate Loan Balance and the aggregate principal
amount of all Eligible Investments in the Securities Account; provided, further,
that such securities will not be Eligible Investments if they are published
as
being under review with negative implications from any Rating
Agency;
(v)
commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more
than 180 days after the date of issuance thereof) rated by each Rating Agency
in
its highest short-term rating category;
(vi)
a
Qualified GIC;
(vii)
certificates
or receipts representing direct ownership interests in future interest or
principal payments on obligations of the United States of America or its
agencies or instrumentalities (which obligations are backed by the full faith
and credit of the United States of America) held by a custodian in safekeeping
on behalf of the holders of such receipts; and
(viii)
any
other
demand, money market, common trust fund or time deposit or obligation, or
interest-bearing or other security or investment, (A) rated in the highest
rating category by each Rating Agency or (B) that would not adversely affect
the
then current rating by any Rating Agency of any of the Certificates. Such
investments in this subsection (viii) may include money market mutual funds
or
common trust funds, including any fund for which the Indenture Trustee, the
Master Servicer or an affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (x) the Indenture Trustee, the Master Servicer or an
affiliate thereof charges and collects fees and expenses from such funds for
services rendered, (y) the Indenture Trustee, the Master Servicer or an
affiliate thereof charges and collects fees and expenses for services rendered
pursuant to this Agreement, and (z) services performed for such funds and
pursuant to this Agreement may converge at any time.
5
provided,
however,
that no
such instrument shall be an Eligible Investment if such instrument evidences
either (i) a right to receive only interest payments with respect to the
obligations underlying such instrument, or (ii) both principal and interest
payments derived from obligations underlying such instrument and the principal
and interest payments with respect to such instrument provide a yield to
maturity of greater than 120% of the yield to maturity at par of such underlying
obligations.
Errors
and Omissions Insurance:
Errors
and Omissions Insurance to be maintained by the Servicer in accordance with
the
Xxxxxx Mae Guides.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to Section
3.05.
Escrow
Payments:
With
respect to any Revolving Credit Loan, the amounts constituting ground rents,
taxes, assessments, water rates, sewer rents, municipal charges, mortgage
insurance premiums, fire and hazard insurance premiums, condominium charges,
and
any other payments required to be escrowed by the Mortgagor with the mortgagee
pursuant to the Mortgage or any other related document.
Event
of Default:
Any
event set forth in Section 8.01.
Xxxxxx
Xxx:
Xxxxxx
Xxx, or any successor thereto.
Xxxxxx
Mae Guides:
The
Xxxxxx Xxx Selling Guide and the Xxxxxx Mae Servicing Guide and all amendments
or additions thereto.
FDIC:
The
Federal Deposit Insurance Corporation or any successor thereto.
Fidelity
Bond:
A
fidelity bond to be maintained by the Servicer in accordance with the Xxxxxx
Xxx
Guides.
Xxxxxxx
Mac:
Xxxxxxx
Mac or any successor thereto.
Xxxxxx
Mae:
The
Government National Mortgage Association or any successor thereto.
Indenture:
The
indenture dated as of [________] [__], 20[__], between the Trust and the
Indenture Trustee.
Indenture
Trustee:
[_________] or any successor in interest, or if any successor trustee or
co-trustee shall be appointed as provided in the Indenture, then such successor
indenture trustee or such co-indenture trustee, as the case may be.
6
Insurance
Proceeds:
With
respect to each Revolving Credit Loan, proceeds of insurance policies insuring
the Revolving Credit Loan or the related Mortgaged Property including proceeds
of any hazard or flood insurance policy.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a defaulted Revolving Credit
Loan, whether through the sale or assignment of such Revolving Credit Loan,
trustee’s sale, foreclosure sale or otherwise, or the sale of the related REO
Property, if the Mortgaged Property is acquired in satisfaction of the Revolving
Credit Loan.
Master
Servicer:
[________________], or any successor in interest, or if any successor master
servicer shall be appointed as provided in the Sale and Servicing Agreement,
then such successor master servicer.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or
any
successor in interest thereto.
MERS
Eligible Revolving Credit Loan:
Any
Revolving Credit Loan that has been designated by the Servicer as recordable
in
the name of MERS.
MERS
Revolving Credit Loan:
Any
Revolving Credit Loan as to which the related Mortgage, or an Assignment of
Mortgage, has been or will be recorded in the name of MERS, as agent for the
holder from time to time of the Mortgage Note.
Monthly
Advance:
With
respect to each Remittance Date and each Revolving Credit Loan, an amount equal
to the Monthly Payment (with the interest portion of such Monthly Payment
adjusted to the Revolving Credit Loan Remittance Rate) that was due on the
Revolving Credit Loan on the Due Date in the related Due Period, and that (i)
was delinquent at the close of business on the related Determination Date and
(ii) was not the subject of a previous Monthly Advance, but only to the extent
that such amount is expected, in the reasonable judgment of the Servicer, to
be
recoverable from collections or other recoveries in respect of such Revolving
Credit Loan. To the extent that the Servicer determines that any such amount
is
not recoverable from collections or other recoveries in respect of such
Revolving Credit Loan, such determination shall be evidenced by a certificate
of
a Servicing Officer delivered to the Master Servicer setting forth such
determination and the procedures and considerations of the Servicer forming
the
basis of such determination.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Revolving Credit
Loan.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first or second lien on an unsubordinated estate in fee simple in
real
property securing the Mortgage Note.
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
real property securing repayment of the debt evidenced by a Mortgage
Note.
7
Mortgagor:
The
obligor on a Mortgage Note.
Non-MERS
Eligible Revolving Credit Loan:
Any
Revolving Credit Loan other than a MERS Eligible Revolving Credit
Loan.
Non-MERS
Revolving Credit Loan:
Any
Revolving Credit Loan other than a MERS Revolving Credit Loan.
Notes:
The
notes issued pursuant to the Indenture.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Servicer, reasonably
acceptable to the Seller, but which must be independent outside counsel with
respect to any such opinion of counsel concerning (i) the non-recordation of
Revolving Credit Loans pursuant to Section 2.02 hereof and (ii) federal income
tax matters.
Owner
Trustee:
[_________] or any successor in interest, or if any successor trustee or
co-trustee shall be appointed as provided in the Trust Agreement, then such
successor owner trustee or such co-owner trustee, as the case may
be.
Person:
Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
[Prepayment
Interest Excess Amount:
With
respect to any Principal Prepayment in full which is applied to the related
Revolving Credit Loan from the first day of the month of any Remittance Date
through the sixteenth day of the month of such Remittance Date, all amounts
paid
in respect of interest on such Principal Prepayment in full. A Prepayment
Interest Excess Amount cannot result from a Principal Prepayment in part, but
only from a Principal Prepayment in full.]
[Prepayment
Interest Shortfall Amount:
With
respect to any Remittance Date and any Principal Prepayment in full which is
applied to the related Revolving Credit Loan from the seventeenth day of the
month immediately preceding the month of such Remittance Date through the last
day of the month immediately preceding the month of such Remittance Date, the
amount of interest (net of the related Servicing Fee) that would have accrued
on
the amount of such Principal Prepayment in full from the date on which such
Principal Prepayment was applied to such Revolving Credit Loan until the last
day of the month immediately preceding the month of such Remittance Date,
inclusive. With respect to any Remittance Date and any Principal Prepayment
in
part which is applied to the related Revolving Credit Loan during the related
Prepayment Period, the amount of interest that would have accrued on the amount
of such Principal Prepayment in part from the date on which such Principal
Prepayment in part was applied to such Revolving Credit Loan until the end
of
the Prepayment Period, inclusive.]
Prepayment
Penalty Amount:
With
respect to any Remittance Date, all prepayment penalties, penalty or yield
maintenance premiums or charges paid by the obligors under the Mortgage Notes
due to Principal Prepayments collected by the Servicer during the immediately
preceding Prepayment Period.
8
Prepayment
Penalty Schedule:
A data
field in the Revolving Credit Loan Schedule attached hereto as Exhibit A which
sets forth the amount or method of calculation of the Prepayment Penalty Amount
and the term during which such Prepayment Penalty Amount is imposed with respect
to a Revolving Credit Loan.
[Prepayment
Period:
With
respect to any Remittance Date and a Principal Prepayment in full, the period
from the seventeenth day of the month immediately preceding the month of such
Remittance Date to the sixteenth day of the month of such Remittance Date.
With
respect to any Remittance Date and any Principal Prepayment in part, the
calendar month immediately preceding the month of such Remittance
Date.]
Prime
Rate:
The
prime rate published from time to time, as published as the average rate in
The
Wall Street Journal Northeast Edition.
Principal
Prepayment:
Any
payment or other recovery of principal on a Revolving Credit Loan which is
received in advance of its scheduled Due Date and which is not accompanied
by an
amount of interest representing scheduled interest due on any date or dates
in
any month or months subsequent to the month of prepayment.
Prior
Servicer:
Any
prior servicer (other than the Servicer) of any of the Revolving Credit
Loans.
Rating
Agency:
Each of
[_______], [_______] and [_______].
[REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code.]
Remittance
Date:
The
[___] day (or if such [___] day is not a Business Day, the first Business Day
immediately following) of any month.
REO
Disposition:
The
final sale by the Servicer of any REO Property.
REO
Disposition Proceeds:
All
amounts received with respect to an REO Disposition pursuant to Section
3.16.
REO
Property:
A
Mortgaged Property acquired by the Servicer on behalf of the Trust through
foreclosure or by deed in lieu of foreclosure, pursuant to Section
3.16.
Retained
Interest:
The
meaning set forth in the Sale and Servicing Agreement.
Retained
Interest Holder:
The
meaning set forth in the Sale and Servicing Agreement.
Revolving
Credit Loan Remittance Rate:
With
respect to each Revolving Credit Loan, the annual rate of interest remitted
to
the Master Servicer, which shall be equal to the Mortgage Interest Rate minus
the applicable Servicing Fee.
9
Revolving
Credit Loan Schedule:
A
schedule of the Revolving Credit Loans setting forth information with respect
to
such Revolving Credit Loans (including any MERS identification number (if
available) with respect to each MERS Revolving Credit Loan or MERS Eligible
Revolving Credit Loan and a Prepayment Penalty Schedule), attached hereto as
Exhibit A, which may be amended from time to time to include additional mortgage
loans which are transferred to the Servicer by a Prior Servicer in a Servicing
Transfer.
Revolving
Credit Loan:
An
individual Revolving Credit Loan that is the subject of this Agreement, each
Revolving Credit Loan subject to this Agreement being identified on the
Revolving Credit Loan Schedule, which Revolving Credit Loan includes without
limitation the Revolving Credit Loan documents, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Revolving Credit
Loan.
Sale
and Servicing Agreement:
The
sale and servicing agreement dated as of [________] [__], 20[__], among
Indenture Trustee, the Master Servicer and the Depositor.
Seller:
[____________] or its successors in interest and assigns.
Servicer:
[______________] or its successor in interest or assigns or any successor to
the
Servicer under this Agreement as herein provided.
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred in the
performance by the Servicer of its servicing obligations, including, but not
limited to, the cost of (i) the preservation, inspection, restoration and
protection of the Mortgaged Property, (ii) any enforcement or administrative
or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the Mortgaged Property if the Mortgaged Property is acquired
in
satisfaction of the Mortgage, (iv) taxes, assessments, water rates, sewer rents
and other charges which are or may become a lien upon the Mortgaged Property
and
fire and hazard insurance coverage, (v) any losses sustained by the Servicer
with respect to the liquidation of the Mortgaged Property and (vi) compliance
with the obligations pursuant to the provisions of the Xxxxxx Xxx
Guides.
Servicing
Fee:
An
amount equal to (a) one-twelfth the product of (i) a rate per annum equal to
[___]% and (ii) the outstanding principal balance of such Revolving Credit
Loan
and (b) any Prepayment Interest Excess Amount. The obligation of the Indenture
Trustee to pay the Servicing Fee is limited to, and the Servicing Fee is payable
solely from the interest portion (including recoveries with respect to interest
from Liquidation Proceeds to the extent permitted by Section 3.04 of this
Agreement) of such Monthly Payment collected by the Servicer or as otherwise
provided under this Agreement.
Servicing
File:
The
items pertaining to a particular Revolving Credit Loan including, but not
limited to, the computer files, data disks, books, records, data tapes, notes,
and all additional documents generated as a result of or utilized in originating
and/or servicing each Revolving Credit Loan, which are held in trust for the
Indenture Trustee by the Servicer.
Servicing
Officer:
Any
officer of the Servicer involved in or responsible for, the administration
and
servicing of the Revolving Credit Loans whose name appears on a list of
servicing officers furnished by the Servicer to the Master Servicer or the
Seller upon request, as such list may from time to time be amended.
10
Servicing
Transfer:
Any
transfer of the servicing by a Prior Servicer of Revolving Credit Loans to
the
Servicer under this Agreement.
Servicing
Transfer Date:
The
date on which a Servicing Transfer occurs.
Specially
Serviced Revolving Credit Loan:
A
Revolving Credit Loan as to which a Servicing Event [(as defined in the Sale
and
Servicing Agreement)] has occurred and is continuing.
S&P:
Standard & Poor’s Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc. or any successor in interest.
Trust
Agreement:
The
Trust Agreement dated as of [________] [__], 20[__], between the Indenture
Trustee and the Owner Trustee.
Any
capitalized terms used and not defined in this Agreement shall have the meanings
ascribed to such terms in the Sale and Servicing Agreement.
ARTICLE
II.
SELLER’S
ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES
Section
2.01 Contract
for Servicing; Possession of Servicing Files.
The
Seller, by execution and delivery of this Agreement, does hereby contract with
the Servicer, subject to the terms of this Agreement, for the servicing of
the
Revolving Credit Loans. On or before the Closing Date or Servicing Transfer
Date, as applicable, the Seller shall cause to be delivered the Servicing Files
with respect to the Revolving Credit Loans listed on the Revolving Credit Loan
Schedule to the Servicer. Each Servicing File delivered to a Servicer shall
be
held in trust by such Servicer for the benefit of the Trust; provided, however,
that the Servicer shall have no liability for any Servicing Files (or portions
thereof) not delivered by the Seller. The Servicer’s possession of any portion
of the Revolving Credit Loan documents shall be at the will of the Indenture
Trustee for the sole purpose of facilitating servicing of the related Revolving
Credit Loan pursuant to this Agreement, and such retention and possession by
the
Servicer shall be in a custodial capacity only. The ownership of each Mortgage
Note, Mortgage, and the contents of the Servicing File shall be vested in the
Trust and the ownership of all records and documents with respect to the related
Revolving Credit Loan prepared by or which come into the possession of the
Servicer shall immediately vest in the Trust and shall be retained and
maintained, in trust, by the Servicer at the will of the Indenture Trustee
in
such custodial capacity only. The portion of each Servicing File retained by
the
Servicer pursuant to this Agreement shall be segregated from the other books
and
records of the Servicer and shall be appropriately marked to clearly reflect
the
ownership of the related Revolving Credit Loan by the Trust. The Servicer shall
release from its custody the contents of any Servicing File retained by it
only
in accordance with this Agreement.
11
Section
2.02 Books
and Records.
(a)
Subject
to Section 3.01(a) hereof, as soon as practicable after the Closing Date, the
Servicing Transfer Date or the date on which a Qualifying Substitute Revolving
Credit Loan is delivered pursuant to Section [___] of the Sale and Servicing
Agreement, as applicable (but in no event more than 90 days thereafter except
to
the extent delays are caused by the applicable recording office), the Servicer,
at the expense of the Depositor, shall cause the Mortgage or Assignment of
Mortgage, as applicable, with respect to each MERS Eligible Revolving Credit
Loan, to be properly recorded in the name of MERS in the public recording office
in the applicable jurisdiction, or shall ascertain that such have previously
been so recorded and, with the cooperation of the Indenture Trustee, shall
take
such actions as are necessary to cause the Trust to be clearly identified as
the
owner of each MERS Revolving Credit Loan and each MERS Eligible Revolving Credit
Loan on the records of MERS for purposes of the system of recording transfers
of
beneficial ownership of mortgages maintained by MERS.
(b)
Subject
to Section 3.01(a) hereof, an Assignment of Mortgage in favor of the Trust
shall
be recorded as to each Non-MERS Revolving Credit Loan unless instructions to
the
contrary are delivered to the Servicer, in writing, by the Seller. Subject
to
the preceding sentence, as soon as practicable after the Closing Date or
Servicing Transfer Date, as applicable (but in no event more than 90 days
thereafter except to the extent delays are caused by the applicable recording
office), the Servicer, at the expense of the Seller, shall cause to be properly
recorded in each public recording office where such Non-MERS Eligible Revolving
Credit Loans are recorded each Assignment of Mortgage.
(c)
Additionally,
the Servicer shall prepare and execute, at the direction of the Indenture
Trustee, any note endorsements relating to any of the Non-MERS Revolving Credit
Loans.
(d)
All
rights arising out of the Revolving Credit Loans shall be vested in the Trust,
subject to the Servicer’s right to service and administer the Revolving Credit
Loans hereunder in accordance with the terms of this Agreement. All funds
received on or in connection with a Revolving Credit Loan, other than the
Servicing Fee and other compensation to which the Servicer is entitled as set
forth herein, including but not limited to any and all servicing compensation
pursuant to Section 5.01 below, shall be received and held by the Servicer
in
trust for the benefit of the Trust pursuant to the terms of this
Agreement.
(e)
Any
out-of-pocket costs incurred by the Servicer pursuant to this Section 2.02
and
Section 3.01(a), including any recording or other fees in connection with the
Servicer’s obtaining the necessary powers of attorney (and which are specified
herein to be an expense of the Seller), shall be reimbursed to the Servicer
by
the Seller within five (5) Business Days of receipt by the Seller of an invoice
for reimbursement. The Trust shall not reimburse the Seller for any such
reimbursement to the Servicer.
(f)
The
Master Servicer and the Indenture Trustee shall have the right to examine the
books, records and other information of the Servicer, with respect to or
concerning this Agreement or the Revolving Credit Loans, during business hours
or at such other times as may be reasonable under applicable circumstances,
upon
reasonable advance written notice to the Servicer.
12
ARTICLE
III.
SERVICING
OF THE REVOLVING CREDIT LOANS
Section
3.01 Servicer
to Service.
The
Servicer, as an independent contractor, shall service and administer the
Revolving Credit Loans from and after the Closing Date or Servicing Transfer
Date, as applicable, and shall have full power and authority, acting alone,
to
do any and all things in connection with such servicing and administration
which
the Servicer may deem necessary or desirable, consistent with the terms of
this
Agreement and with Accepted Servicing Practices.
The
Seller, the Master Servicer and the Servicer additionally agree that the
Servicer will fully furnish, in accordance with the Fair Credit Reporting Act
of
1970, as amended (the “Fair Credit Reporting Act”) and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis.
The
Seller and the Servicer additionally agree as follows:
(a)
The
Servicer shall (i) record or cause to be recorded the Mortgage or the Assignment
of Mortgage, as applicable, with respect to all MERS Eligible Revolving Credit
Loans, in the name of MERS, or shall ascertain that such have previously been
so
recorded; (ii) with the cooperation of the Indenture Trustee, take such actions
as are necessary to cause the Trust to be clearly identified as the owner of
each MERS Revolving Credit Loan and each MERS Eligible Revolving Credit Loan
on
the records of MERS for purposes of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS; (iii) prepare or cause
to
be prepared all Assignments of Mortgage with respect to all Non-MERS Eligible
Revolving Credit Loans; (iv) record or cause to be recorded, subject to Section
2.02(b) hereof, all Assignments of Mortgage with respect to Non-MERS Revolving
Credit Loans in the name of the Trust; (v) pay the recording costs pursuant
to
Section 2.02 hereof; and/or (vi) track such Mortgages and Assignments of
Mortgage to ensure they have been recorded. The Servicer shall be entitled
to be
paid by the Seller fees for the preparation and recordation of the Mortgages
and
Assignments of Mortgage. After the expenses of such recording costs pursuant
to
Section 2.02 hereof shall have been paid by the Servicer, the Servicer shall
submit to the Seller a reasonably detailed invoice for reimbursement of
recording costs and fees it incurred hereunder.
(b)
If
applicable, the Servicer shall, in accordance with the relevant provisions
of
the Xxxxxxxx-Xxxxxxxx National Affordable Housing Act of 1990, as the same
may
be amended from time to time, and the regulations provided in accordance with
the Real Estate Settlement Procedures Act, provide notice to the Mortgagor
of
each Revolving Credit Loan of the transfer of the servicing thereto to the
Servicer.
(c)
The
Servicer shall be responsible for the preparation of and costs associated with
notifications to Mortgagors of the assumption of servicing by the
Servicer.
13
(d)
The
Servicer shall, in accordance with the customary and usual standards of practice
of prudent mortgage servicers of fixed and adjustable rate open-end home equity
mortgage loans, approve and make disbursements of principal in connection with
Mortgagor drafts upon the Credit Line approved in connection with each Revolving
Credit Loan. The Servicer shall provide to the Mortgagors all checks, drafts
or
other documentation necessary for such Mortgagors to obtain a Credit Line
Advance. On each Remittance Date, with respect to each Credit Line Advance
disbursed by the Servicer and reported to the Indenture Trustee and the Master
Servicer, the Servicer shall be entitled to reimburse itself, from amounts
on
deposit in the Custodial Account, in an amount equal to (i) the principal amount
of each unreimbursed Credit Line Advance disbursed by Servicer with respect
to a
Revolving Credit Loan and (ii) interest, at the Credit Advance Rate, on the
principal amount of each such Credit Line Advance from the date such Credit
Line
Advance was disbursed by Servicer to but not including such date reimbursement
is received by the Servicer. In the event that there are insufficient funds
on
deposit in the Custodial Account on any Remittance Date to reimburse the
Servicer as provided in the preceding sentence (such shortfall, an “Advance
Reimbursement Shortfall Amount”),
the
Servicer shall deliver to the Indenture Trustee and the Master Servicer a
request for reimbursement of the amount of such Advance Reimbursement Shortfall
Amount at least three Business Days prior to such Remittance Date. The Indenture
Trustee on behalf of the Trust shall promptly reimburse the Servicer on such
Remittance Date for such Advance Reimbursement Shortfall Amount.
(e)
The
Servicer, at its discretion and in accordance with the customary and usual
standards of practice of prudent mortgage servicers of fixed and adjustable
rate
open-end home equity mortgage loans, may perform any of the following actions in
connection with a Revolving Credit Loan:
(i)
with
the
approval of the Indenture Trustee and Master Servicer, increase the amount
of
the related Credit Line;
(ii)
with
the
approval of the Indenture Trustee and Master Servicer, terminate a dormant
Revolving Credit Loan, to the extent permitted under the related Mortgage Note;
(iii)
permit
payments from the Mortgagor of interest only during the period when Credit
Line
Advances may be made; or
(iv)
with
the
approval of the Indenture Trustee, eliminate the ability of the Mortgagor to
make future drafts upon the Credit Line, or reduce the Credit Line, to the
extent permitted under the related Mortgage Note.
14
(f)
Notwithstanding
anything to the contrary contained herein, the Servicer shall, in servicing
the
Revolving Credit Loans, follow and comply with the servicing guidelines
established by Xxxxxx Mae, and the Servicer may waive, modify or vary any term
of any Revolving Credit Loan or consent to the postponement of strict compliance
with any such term or in any manner grant indulgence to any Mortgagor if in
the
Servicer’s reasonable and prudent determination such waiver, modification,
postponement or indulgence is in the best interests of the Qualified Insurer
and the
Certificateholders and is consistent with the terms of this Agreement; provided,
however, that if the Mortgagor is in default with respect to the Revolving
Credit Loan or such default is, in the judgment of the Servicer, reasonably
foreseeable, the Servicer shall not permit any modification of any material
term
of any Revolving Credit Loan that would change the Mortgage Interest Rate,
defer
or forgive the payment of principal or interest, reduce or increase the
outstanding principal balance (except for actual payments of principal) or
change the final maturity date on such Revolving Credit Loan. In the event
of
any such modification which permits the deferral of interest or principal
payments on any Revolving Credit Loan, the Servicer shall, on the Business
Day
immediately preceding the Remittance Date in any month in which any such
principal or interest payment has been deferred, make a Monthly Advance in
accordance with Section 4.03, in an amount equal to the difference between
(i)
such month’s principal and one month’s interest at the Revolving Credit Loan
Remittance Rate on the unpaid principal balance of such Revolving Credit Loan
and (ii) the amount paid by the Mortgagor. The Servicer shall be entitled to
reimbursement for such advances to the same extent as for all other advances
made pursuant to Section 4.03. Without limiting the generality of the foregoing,
the Servicer shall continue, and is hereby authorized and empowered, to execute
and deliver on behalf of itself and the Indenture Trustee, all instruments
of
satisfaction or cancellation, or of partial or full release, discharge and
all
other comparable instruments, with respect to the Revolving Credit Loans and
with respect to the Mortgaged Properties. Upon the request of the Servicer,
the
Indenture Trustee and the Master Servicer shall execute and deliver to the
Servicer any powers of attorney and other documents, furnished to it by the
Servicer and reasonably satisfactory to the Indenture Trustee and Master
Servicer, necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties under this Agreement. Notwithstanding
anything contained herein to the contrary, the Servicer shall not, without
the
Indenture Trustee’s written consent: (i) initiate any action suit or proceeding
solely under the Indenture Trustee’s name without indicating the Servicer’s
representative capacity; or (ii) take any action with the intent to cause,
and
that actually causes, the Indenture Trustee to be registered to do business
in
any state. Promptly after the execution of any assumption, modification,
consolidation or extension of any Revolving Credit Loan, the Servicer shall
forward to the Master Servicer copies of any documents evidencing such
assumption, modification, consolidation or extension. [Notwithstanding anything
to the contrary contained in this Servicing Agreement, the Servicer shall not
make or permit any modification, waiver or amendment of any term of any
Revolving Credit Loan that would cause any REMIC created under the Indenture
to
fail to qualify as a REMIC or result in the imposition of any tax under Section
860F(a) or Section 860G(d) of the Code.] Notwithstanding anything to the
contrary herein, the Servicer shall not, without specifically notifying the
Indenture Trustee and Master Servicer in writing and obtaining the Indenture
Trustee’s prior written consent:
(i)
make
any
future advances with respect to a Revolving Credit Loan in excess of the Credit
Line with respect to such Revolving Credit Loan;
(ii)
make
any
Servicing Advance in excess of $[ ];
(iii)
permit
any modification with respect to any Revolving Credit Loan that would change
the
Mortgage Interest Rate, defer or forgive the payment of principal or interest,
reduce or increase the outstanding principal balance or change the final
maturity date on such Revolving Credit Loan;
(iv)
sell
any
Specially Serviced Revolving Credit Loan;
15
(v)
forgive
any principal or interest on, or permitting to be satisfied at a discount,
any
Revolving Credit Loan; or
(vi)
accept
substitute or additional collateral, or release any collateral, for a Revolving
Credit Loan.
Notwithstanding
anything to the contrary in this Agreement, the Servicer shall not (unless
the
Servicer determines, in its own discretion, that there exists a situation of
extreme hardship to the Mortgagor), waive any premium or penalty in connection
with a prepayment of principal of any Revolving Credit Loan, and shall not
consent to the modification of any Mortgage Note to the extent that such
modification relates to payment of a prepayment premium or penalty.
In
servicing and administering the Revolving Credit Loans, the Servicer shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, the Xxxxxx Xxx Guides, and the Master Servicer’s and Seller’s
reliance on the Servicer.
Section
3.02 Collection
of Revolving Credit Loan Payments.
Continuously
from the Closing Date or Servicing Transfer Date, as applicable, until the
date
each Revolving Credit Loan ceases to be subject to this Agreement, the Servicer
shall proceed diligently to collect all payments due under each of the Revolving
Credit Loans when the same shall become due and payable and shall take special
care in ascertaining and estimating Escrow Payments and all other charges that
will become due and payable with respect to the Revolving Credit Loans and
each
related Mortgaged Property, to the end that the installments payable by the
Mortgagors will be sufficient to pay such charges as and when they become due
and payable.
Section
3.03 Establishment
of and Deposits to Custodial Account.
The
Servicer shall segregate and hold all funds collected and received pursuant
to
the Revolving Credit Loans separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled as directed by the Master
Servicer. The Custodial Account shall be an Eligible Deposit Account established
with an Eligible Institution. Any funds deposited in the Custodial Account
may
be invested in Eligible Investments subject to the provisions of Section 3.11
hereof. Funds deposited in the Custodial Account may be drawn on by the Servicer
in accordance with Section 3.04. The creation of any Custodial Account shall
be
evidenced by a certification in the form of Exhibit B. A copy of such
certification shall be furnished to the Master Servicer and, upon request,
to
any subsequent owner of the Revolving Credit Loans.
16
The
Servicer shall deposit in the Custodial Account on a daily basis, and retain
therein, the following collections received by the Servicer and payments made
by
the Servicer after the Closing Date or Servicing Transfer Date, as
applicable:
(i)
all
payments on account of principal on the Revolving Credit Loans, including all
Principal Prepayments;
(ii)
all
payments on account of interest on the Revolving Credit Loans adjusted to the
Revolving Credit Loan Remittance Rate;
(iii)
all
Liquidation Proceeds;
(iv)
all
Insurance Proceeds (other than amounts applied to the restoration or repair
of
the Mortgaged Property or immediately released to the Mortgagor in accordance
with Accepted Servicing Practices);
(v)
all
Condemnation Proceeds that are not applied to the restoration or repair of
the
Mortgaged Property or released to the Mortgagor;
(vi)
with
respect to each Principal Prepayment in full or in part, the Prepayment Interest
Shortfall Amount, if any, for the month of distribution. Such deposit shall
be
made from the Servicer’s own funds, without reimbursement therefor, up to a
maximum amount per month of the Servicing Fee actually received for such month
for the Revolving Credit Loans;
(vii)
all
Monthly Advances made by the Servicer pursuant to Section 4.03;
(viii)
any
amounts required to be deposited by the Servicer in connection with the
deductible clause in any blanket hazard insurance policy;
(ix)
any
amounts received with respect to or related to any REO Property or REO
Disposition Proceeds;
(x)
any
Prepayment Penalty Amounts; and
(xi)
any
other
amount required hereunder to be deposited by the Servicer in the Custodial
Account.
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of the Servicing Fee and Ancillary
Income need not be deposited by the Servicer into the Custodial
Account.
Any
interest paid on funds deposited in the Custodial Account by the depository
institution shall accrue to the benefit of the Servicer and the Servicer shall
be entitled to retain and withdraw such interest from the Custodial Account
pursuant to Section 3.04. Additionally, any other benefit derived from the
Custodial Account associated with the receipt, disbursement and accumulation
of
principal, interest, taxes, hazard insurance, mortgage insurance, etc. shall
accrue to the Servicer.
17
Section
3.04 Permitted
Withdrawals From Custodial Account.
The
Servicer shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(i)
to
make
payments to the Master Servicer in the amounts and in the manner provided for
in
Section 4.01;
(ii)
in
the
event the Servicer has elected not to retain the Servicing Fee out of any
Mortgagor payments on account of interest or other recovery of interest with
respect to a particular Revolving Credit Loan (including late collections of
interest on such Revolving Credit Loan, or interest portions of Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds) prior to the deposit
of
such Mortgagor payment or recovery in the Custodial Account, to pay to itself
the related Servicing Fee from all such Mortgagor payments on account of
interest or other such recovery for interest with respect to that Revolving
Credit Loan;
(iii)
to
pay
itself investment earnings on funds deposited in the Custodial
Account;
(iv)
to
clear
and terminate the Custodial Account upon the termination of this Agreement;
(v)
to
transfer funds to another Eligible Institution in accordance with Section 3.11
hereof;
(vi)
to
invest
funds in certain Eligible Investments in accordance with Section 3.11 hereof;
(vii)
to
reimburse itself for the amount of any Credit Line Advances made by Servicer
and
not timely reimbursed by the Indenture Trustee on behalf of the Trust in
accordance with Section 3.01(d) hereof;
(viii)
to
reimburse itself to the extent of funds in the Custodial Account for Monthly
Advances of the Servicer’s funds made pursuant to Section 4.03, the Servicer's
right to reimburse itself pursuant to this subclause (ix) with respect to any
Revolving Credit Loan being limited to amounts received on or in respect of
the
related Revolving Credit Loan which represent late recoveries of payments of
principal or interest with respect to which a Monthly Advance was made, it
being
understood that, in the case of any such reimbursement, the Servicer’s right
thereto shall be prior to the rights of the Trust, provided,
however,
that
following the final liquidation of a Revolving Credit Loan, the Servicer may
reimburse itself for previously unreimbursed Monthly Advances in excess of
Liquidation Proceeds or Insurance Proceeds with respect to such Revolving Credit
Loan from any funds in the Custodial Account, it being understood, in the case
of any such reimbursement, that the Servicer’s right thereto shall be prior to
the rights of the Trust. The Servicer may recover at any time from amounts
on
deposit in the Custodial Account the amount of any Monthly Advances that the
Servicer deems nonrecoverable or that remain unreimbursed to the Servicer from
related Liquidation Proceeds after the final liquidation of the Revolving Credit
Loan;
18
(ix)
to
reimburse itself for remaining unreimbursed Servicing Advances with respect
to
any defaulted Revolving Credit Loan as to which the Servicer has determined
that
all amounts that it expects to recover on behalf of the Trust from or on account
of such Revolving Credit Loan have been recovered;
(x)
to
reimburse itself for expenses incurred or reimbursable to the Servicer pursuant
to Sections 3.12 and 6.03 to the extent not previously reimbursed under clause
(ix) of this Section 3.04; and
(xi)
to
withdraw funds deposited in error.
Section
3.05 Establishment
of and Deposits to Escrow Account.
The
Servicer shall segregate and hold all funds collected and received pursuant
to a
Revolving Credit Loan constituting Escrow Payments separate and apart from
any
of its own funds and general assets and shall establish and maintain one or
more
Escrow Accounts, in the form of time deposit or demand accounts, titled as
directed by the Master Servicer. Each Escrow Account shall be an Eligible
Deposit Account established with an Eligible Institution in a manner that shall
provide maximum available insurance thereunder. Funds deposited in the Escrow
Account may be drawn on by the Servicer in accordance with Section 3.06. The
creation of any Escrow Account shall be evidenced by a certification in the
form
of Exhibit C. A copy of such certification shall be furnished to the Master
Servicer and, upon request, to any subsequent owner of the Revolving Credit
Loans.
The
Servicer shall deposit in the Escrow Account or Accounts on a daily basis,
and
retain therein:
(i)
all
Escrow Payments collected on account of the Revolving Credit Loans, for the
purpose of effecting timely payment of any such items as required under the
terms of this Agreement; and
(ii)
all
amounts representing Insurance Proceeds or Condemnation Proceeds that are to
be
applied to the restoration or repair of any Mortgaged Property.
The
Servicer shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 3.06.
The
Servicer shall retain any interest paid on funds deposited in the Escrow Account
by the depository institution, other than interest on escrowed funds required
by
law to be paid to the Mortgagor. Additionally, any other benefit derived from
the Escrow Account associated with the receipt, disbursement and accumulation
of
principal, interest, taxes, hazard insurance, mortgage insurance, etc. shall
accrue to the Servicer. To the extent required by law, the Servicer shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account may be non-interest bearing or that interest paid thereon is
insufficient for such purposes.
19
Section
3.06 Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Servicer
only:
(i)
to
effect
timely payments of ground rents, taxes, assessments, water rates, sewer rents,
mortgage insurance premiums, condominium charges, fire and hazard insurance
premiums or other items constituting Escrow Payments for the related
Mortgage;
(ii)
to
refund
to any Mortgagor any funds found to be in excess of the amounts required under
the terms of the related Revolving Credit Loan;
(iii)
for
transfer to the Custodial Account and application to reduce the principal
balance of the Revolving Credit Loan in accordance with the terms of the related
Mortgage and Mortgage Note;
(iv)
to
reimburse the Servicer for any Servicing Advance made by the Servicer with
respect to a related Revolving Credit Loan, but only from amounts received
on
the related Revolving Credit Loan which represent late collections of Escrow
Payments;
(v)
for
application to restoration or repair of the Mortgaged Property in accordance
with the Xxxxxx Mae Guides;
(vi)
to
pay to
the Servicer, or any Mortgagor to the extent required by law, any interest
paid
on the funds deposited in the Escrow Account;
(vii)
to
remove
funds inadvertently placed in the Escrow Account by the Servicer;
and
(viii)
to
clear
and terminate the Escrow Account on the termination of this
Agreement.
Section
3.07 Reserved.
Section
3.08 Fidelity
Bond and Errors and Omissions Insurance.
The
Servicer shall keep in force during the term of this Agreement a Fidelity Bond
and Errors and Omissions Insurance Policy. Such Fidelity Bond and Errors and
Omissions Insurance shall be maintained with recognized insurers and shall
be in
such form and amount as would permit the Servicer to be qualified as a Xxxxxx
Xxx or Xxxxxxx Mac seller-servicer. The Servicer shall be deemed to have
complied with this provision if an affiliate of the Servicer has such errors
and
omissions and fidelity bond coverage and, by the terms of such insurance policy
or fidelity bond, the coverage afforded thereunder extends to the Servicer.
The
Servicer shall furnish to the Master Servicer or Indenture Trustee a copy of
each such bond and insurance policy if (i) the Master Servicer or Indenture
Trustee so requests and (ii) the Servicer is not an affiliate of
[______________] at the time of such request.
20
Section
3.09 Notification
of Adjustments.
With
respect to each Adjustable Rate Mortgage Loan, the Servicer shall adjust the
Mortgage Interest Rate on the related interest rate adjustment date and shall
adjust the Monthly Payment on the related mortgage payment adjustment date,
if
applicable, in compliance with the requirements of applicable law and the
related Mortgage and Mortgage Note. The Servicer shall execute and deliver
any
and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and
Monthly Payment adjustments. The Servicer shall promptly, upon written request
therefor, deliver to the Master Servicer such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate
and
implement such adjustments. Upon the discovery by the Servicer or the receipt
of
notice from the Master Servicer that the Servicer has failed to adjust a
Mortgage Interest Rate or Monthly Payment in accordance with the terms of the
related Mortgage Note, the Servicer shall immediately deposit in the Custodial
Account from its own funds the amount of any interest loss or deferral caused
thereby.
Section
3.10 Completion
and Recordation of Assignments of Mortgage.
As
soon
as practicable after the Closing Date, the Servicing Transfer Date or the date
on which a Qualifying Substitute Revolving Credit Loan is delivered pursuant
to
Section [___] of the Sale and Servicing Agreement, as applicable (but in no
event more than 90 days thereafter except to the extent delays are caused by
the
applicable public recording office), the Servicer shall cause the endorsements
on the Mortgage Note (if applicable), and the Assignments of Mortgage (subject
to Section 3.01(a)) to be completed in the name of the Trust (or MERS, as
applicable).
Section
3.11 Protection
of Accounts.
The
Servicer may transfer the Custodial Account or any Escrow Account to a different
Eligible Institution from time to time; provided
that in
the event the Custodial Account or any Escrow Account is held in a depository
institution or trust company that ceases to be an Eligible Institution, the
Servicer shall transfer such Custodial Account or Escrow Account, as the case
may be, to an Eligible Institution. Such transfer shall be made only upon
obtaining the consent of the Master Servicer, which consent shall not be
withheld unreasonably.
The
Servicer shall bear any expenses, losses or damages sustained by the Master
Servicer or the Indenture Trustee if the Custodial Account and/or the Escrow
Account are not demand deposit accounts.
Amounts
on deposit in the Custodial Account and the Escrow Account may at the option
of
the Servicer be invested in Eligible Investments. Any such Eligible Investment
shall mature no later than the Business Day immediately preceding the related
Remittance Date; provided,
however,
that if
such Eligible Investment is an obligation of a Qualified Depository (other
than
the Servicer) that maintains the Custodial Account or the Escrow Account, then
such Eligible Investment may mature on the related Remittance Date. Any such
Eligible Investment shall be made in the name of the Servicer in trust for
the
benefit of the Trust. All income on or gain realized from any such Eligible
Investment shall be for the benefit of the Servicer and may be withdrawn at
any
time by the Servicer. Any losses incurred in respect of any such investment
shall be deposited in the Custodial Account or the Escrow Account, by the
Servicer out of its own funds immediately as realized.
21
Section
3.12 Payment
of Taxes, Insurance and Other Charges.
With
respect to each Revolving Credit Loan, the Servicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and fire and hazard insurance coverage and shall obtain, from time
to
time, all bills for the payment of such charges (including renewal premiums)
and
shall effect payment thereof prior to the applicable penalty or termination
date, employing for such purpose deposits of the Mortgagor in the Escrow Account
which shall have been estimated and accumulated by the Servicer in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage. The
Servicer assumes full responsibility for the timely payment of all such bills,
shall effect timely payment of all such charges irrespective of each Mortgagor’s
faithful performance in the payment of same or the making of the Escrow
Payments, and shall make advances from its own funds to effect such payments.
With regard to any Revolving Credit Loans for which the Mortgagor is not
required to escrow Escrow Payments with the Servicer, the Servicer shall use
reasonable efforts consistent with Accepted Servicing Practices to determine
that any such payments are made by the Mortgagor at the time they first became
due and shall insure that the Mortgaged Property is not lost to a tax lien
as a
result of nonpayment and that such Mortgage is not left uninsured and shall
make
advances from its own funds to effect any such delinquent payments to avoid
the
lapse of insurance coverage on the Mortgaged Property or to avoid the imposition
of a tax lien.
Section
3.13 Maintenance
of Hazard Insurance.
The
Servicer shall cause to be maintained for each Revolving Credit Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by
a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located, in an amount which is at least equal to the greater of (i) the
outstanding principal balance of the Revolving Credit Loan and (ii) an amount
such that the proceeds thereof shall be sufficient to prevent the Mortgagor
or
the loss payee from becoming a co-insurer.
If
upon
origination of the Revolving Credit Loan, the related Mortgaged Property was
located in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards (and such flood insurance
has
been made available) a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect with
a
generally acceptable insurance carrier in an amount representing coverage equal
to the lesser of (i) the minimum amount required, under the terms of coverage,
to compensate for any damage or loss on a replacement cost basis (or the unpaid
balance of the mortgage if replacement cost coverage is not available for the
type of building insured) and (ii) the maximum amount of insurance which is
available under the Flood Disaster Protection Act of 1973, as amended. If at
any
time during the term of the Revolving Credit Loan, the Servicer determines
in
accordance with applicable law and pursuant to the Xxxxxx Xxx Guides that a
Mortgaged Property is located in a special flood hazard area and is not covered
by flood insurance or is covered in an amount less than the amount required
by
the Flood Disaster Protection Act of 1973, as amended, the Servicer shall notify
the related Mortgagor that the Mortgagor must obtain such flood insurance
coverage, and if said Mortgagor fails to obtain the required flood insurance
coverage within forty-five (45) days after such notification, the Servicer
shall
force place the required flood insurance on the Mortgagor’s behalf.
22
Section
3.14 Maintenance
of Mortgage Blanket Insurance.
The
Servicer shall obtain and maintain a blanket policy insuring against losses
arising from fire and hazards covered under extended coverage on all of the
Revolving Credit Loans. To the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 3.12 and otherwise complies
with all other requirements of Section 3.12, it shall conclusively be deemed
to
have satisfied its obligations as set forth in Section 3.12. Any amounts
collected by the Servicer under any such policy relating to a Revolving Credit
Loan shall be deposited in the Custodial Account or Escrow Account subject
to
withdrawal pursuant to Sections 3.04 or 3.06. Such policy may contain a
deductible clause, in which case, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
3.12, and there shall have been a loss which would have been covered by such
policy, the Servicer shall deposit in the Custodial Account at the time of
such
loss the amount not otherwise payable under the blanket policy because of such
deductible clause, such amount to be deposited from the Servicer’s funds,
without reimbursement therefor.
Section
3.15 Restoration
of Mortgaged Property.
The
Servicer need not obtain the approval of the Indenture Trustee or the Master
Servicer prior to releasing any Insurance Proceeds or Condemnation Proceeds
to
the Mortgagor to be applied to the restoration or repair of the Mortgaged
Property if such release is in accordance with Accepted Servicing Practices.
At
a minimum, with respect to claims greater than $10,000, the Servicer shall
comply with the following conditions in connection with any such release of
Insurance Proceeds or Condemnation Proceeds:
(i)
the
Servicer shall receive satisfactory independent verification of completion
of
repairs and issuance of any required approvals with respect thereto;
(ii)
the
Servicer shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens; and
(iii)
pending
repairs or restoration, the Servicer shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
Section
3.16 Management
of REO Property.
(a)
If
title
to any Mortgaged Property is acquired in foreclosure or by deed in lieu of
foreclosure (each, an “REO
Property”),
the
Servicer shall dispose of such REO Property not later than the end of the third
taxable year after the year of its acquisition by the Trust unless the Servicer
has applied for and received a grant of extension from the Internal Revenue
Service to the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, the applicable Trust may hold REO
Property for a longer period without adversely affecting the REMIC status of
such REMIC or causing the imposition of a federal or state tax upon such REMIC
and has notified the Master Servicer of such extension being granted by
providing a copy of the application and the grant of such extension to the
Master Servicer. If the Servicer has received such an extension, then the
Servicer shall continue to attempt to sell the REO Property for its fair market
value for such period longer than three years as such extension permits (the
“Extended Period”). If the Servicer has not received such an extension and the
Servicer is unable to sell the REO Property within the period ending 3 months
before the end of such third taxable year after its acquisition by the Trust
or
if the Servicer has received such an extension, and the Servicer is unable
to
sell the REO Property within the period ending three months before the close
of
the Extended Period, the Servicer shall, before the end of the three year period
or the Extended Period, as applicable, (i) purchase such REO Property at a
price
equal to the REO Property’s fair market value as acceptable to the Master
Servicer or (ii) auction the REO Property to the highest bidder (which may
be
the Servicer) in an auction reasonably designed to produce a fair price prior
to
the expiration of the three-year period or the Extended Period, as the case
may
be. The Indenture Trustee shall (i) sign any document prepared or delivered
to
it by the Servicer or (ii) take any other action, in the case of each of (i)
and
(ii) reasonably requested by the Servicer, which would enable the Servicer,
on
behalf of the Trust, to request such grant of extension.
23
(b)
Notwithstanding
any other provisions of this Agreement, no REO Property acquired by the Trust
shall be rented (or allowed to continue to be rented) or otherwise used by
or on
behalf of the Trust in such a manner or pursuant to any terms that would: (i)
cause such REO Property to fail to qualify as “foreclosure property” within the
meaning of Section 860G(a)(8) of the Code; or (ii) subject any Trust to the
imposition of any federal income taxes on the income earned from such REO
Property, including any taxes imposed by reason of Sections 860F or 860G(c)
of
the Code, unless the Servicer has agreed to indemnify and hold harmless the
Trust with respect to the imposition of any such taxes.
(c)
Prior
to
acceptance by the Servicer of an offer to sell any REO Property, the Servicer
shall notify the Master Servicer of such offer in writing which notification
shall set forth all material terms of said offer (each a “Notice
of
Sale”).
The
Master Servicer shall be deemed to have approved the sale of any REO Property
unless the Master Servicer notifies the Servicer in writing, within five (5)
days after its receipt of the related Notice of Sale, that it disapproves of
the
related sale, in which case the Servicer shall not proceed with such
sale.
Section
3.17 Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 4.02, the Servicer shall
furnish to the Master Servicer on or before the Remittance Date each month
a
statement with respect to any REO Property covering the operation of such REO
Property for the previous month and the Servicer’s efforts in connection with
the sale of such REO Property and any rental of such REO Property incidental
to
the sale thereof for the previous month. That statement shall be accompanied
by
such other information as the Master Servicer shall reasonably
request.
Section
3.18 MERS.
(a)
The
Servicer shall use its Best Efforts to cause the Trust to be identified as
the
owner of each MERS Revolving Credit Loan on the records of MERS for purposes
of
the system of recording transfers of beneficial ownership of mortgages
maintained by MERS.
24
(b)
The
Servicer shall maintain in good standing its membership in MERS. In addition,
the Servicer shall comply with all rules, policies and procedures of MERS,
including the Rules of Membership, as amended, and the MERS Procedures Manual,
as amended.
(c)
With
respect to all MERS Revolving Credit Loans serviced hereunder, the Servicer
shall promptly notify MERS as to any transfer of beneficial ownership of such
Revolving Credit Loans of which the Servicer has notice.
(d)
With
respect to all MERS Revolving Credit Loans serviced hereunder, the Servicer
shall notify MERS as to any transfer of servicing pursuant to Section 3.15
or
Section 9.01 within 10 Business Days of such transfer of servicing. The Servicer
shall cooperate with the Indenture Trustee, the Master Servicer and any
successor servicer to the extent necessary to ensure that such transfer of
servicing is appropriately reflected on the MERS system.
Section
3.19 Waiver
of Prepayment Penalty Amounts.
Except
as
provided below, the Servicer or any designee of the Servicer shall not waive
any
Prepayment Penalty Amount with respect to any Revolving Credit Loan. If the
Servicer or its designee fails to collect a Prepayment Penalty Amount at the
time of the related prepayment of any Revolving Credit Loan subject to such
Prepayment Penalty Amount, the Servicer shall pay to the Trust at such time
(by
deposit to the Custodial Account) an amount equal to the amount of the
Prepayment Penalty Amount not collected; provided,
however,
the
Servicer shall not have any obligation to pay the amount of any uncollected
Prepayment Penalty Amount under this Section 3.19 if the failure to collect
such
amount is the result of inaccurate or incomplete information in the Prepayment
Penalty Amount Schedule provided by the Seller and which is included as part
of
the Revolving Credit Loan Schedule attached hereto as Exhibit A. The Prepayment
Penalty Amounts listed on the Prepayment Penalty Amount Schedule attached hereto
as Exhibit A are complete, true and accurate and may be relied on by the
Servicer in its calculation of Prepayment Penalty Amounts. If the Prepayment
Penalty Amount data set forth on Exhibit A is incorrect, then the Servicer
shall
have no liability for any loss resulting from calculation of Prepayment Penalty
Amounts using the data provided. Notwithstanding the above, the Servicer or
its
designee may waive a Prepayment Penalty Amount without paying to the Trust
the
amount of such Prepayment Penalty Amount only if such Prepayment Penalty Amount
(i) relates to a defaulted Revolving Credit Loan or a reasonably foreseeable
default, such waiver is standard and customary in servicing similar mortgage
loans to the Revolving Credit Loan, and such waiver, in the reasonable judgment
of the Servicer would maximize recovery of total proceeds from the Revolving
Credit Loan, taking into account the amount of such Prepayment Charge and the
related Revolving Credit Loan, or (ii) relates to a prepayment charge the
collection of which, if collected, would be a violation of applicable
laws.
25
Section
3.20 Safeguarding
Customer Information.
The
Servicer has implemented and will maintain security measures designed to meet
the objectives of the Interagency Guidelines Establishing Standards for
Safeguarding Customer Information published in final form on February 1,
2001, 66 Fed. Reg. 8616 and the rules promulgated thereunder, as amended from
time to time (the “Guidelines”).
The
Servicer shall promptly provide the Master Servicer and the Indenture Trustee
information reasonably available to it regarding such security measures upon
the
reasonable request of the Master Servicer and the Indenture Trustee which
information shall include, but not be limited to, any Statement on Auditing
Standards (SAS) No. 70 report covering the Servicer’s operations, and any other
audit reports, summaries of test results or equivalent measures taken by the
Servicer with respect to its security measures to the extent reasonably
necessary in order for the Seller to satisfy its obligations under the
Guidelines.
Section
3.21 Realization
Upon Specially Serviced Revolving Credit Loans.
Subject
to Section 3.01(f),
the Servicer shall foreclose upon or otherwise comparably convert the ownership
of properties securing such of the Specially Serviced Revolving Credit Loans
as
come into and continue in default and as to which (a) in the reasonable
judgment of the Servicer, no satisfactory arrangements can, in accordance with
prudent lending practices, be made for collection of delinquent payments
pursuant to Section 3.01 and (b) such foreclosure or other conversion
is otherwise in accordance with Section 3.01. The Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration, repair, protection or maintenance of any property unless it
shall determine that such expenses will be recoverable to it as Servicing
Advances either through Liquidation Proceeds or through Insurance Proceeds
(in
accordance with Section 3.03) or from any other source relating to the
Specially Serviced Revolving Credit Loan. The Servicer shall be required to
advance funds for all other costs and expenses incurred by it in any such
foreclosure proceedings (including funds necessary to pay off the first lien,
if
any, on the related Mortgaged Property; provided
that it
shall be entitled to reimbursement thereof from the proceeds of liquidation
of
the related Mortgaged Property, as contemplated by
Section 3.03.
ARTICLE
IV.
PAYMENTS
TO MASTER SERVICER
Section
4.01 Remittances.
On
each
Remittance Date the Servicer shall remit by wire transfer of immediately
available funds to the Master Servicer (i) all amounts deposited in the
Custodial Account as of the close of business on the last day of the related
Due
Period (net of charges against or withdrawals from the Custodial Account
pursuant to Section 3.04), plus (ii) all Monthly Advances, if any, which the
Servicer is obligated to make pursuant to Section 4.03, minus (iii) any amounts
attributable to Principal Prepayments, Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds or REO Disposition Proceeds received after the applicable
Prepayment Period, which amounts shall be remitted on the following Remittance
Date, together with any additional interest required to be deposited in the
Custodial Account in connection with such Principal Prepayment in accordance
with Section 3.03(vi), and minus (iv)
any
amounts attributable to Monthly Payments collected but due on a Due Date or
Due
Dates subsequent to the first day of the month in which such Remittance Date
occurs, which amounts shall be remitted on the Remittance Date next succeeding
the Due Date related to such Monthly Payment.
26
With
respect to any remittance received by the Master Servicer after the Business
Day
on which such payment was due, the Servicer shall pay to the Master Servicer
interest on any such late payment at an annual rate equal to the Prime Rate,
adjusted as of the date of each change, plus two (2) percentage points, but
in
no event greater than the maximum amount permitted by applicable law. Such
interest shall be deposited in the Custodial Account by the Servicer on the
date
such late payment is made and shall cover the period commencing with the day
following such Business Day and ending with the Business Day on which such
payment is made, both inclusive. Such interest shall be remitted along with
the
distribution payable on the next succeeding Remittance Date. The payment by
the
Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Servicer.
All
remittances required to be made to the Master Servicer shall be made to the
following wire account or to such other account as may be specified by the
Master Servicer from time to time:
[_______________]
[_______________]
[_______________]
[_______________]
[_______________]
Section
4.02 Statements
to Master Servicer.
Not
later
than the tenth calendar day of each month (or if such calendar day is not a
Business Day, the immediately preceding Business Day), the Servicer shall
furnish to the Master Servicer (i) a monthly remittance advice in the format
set
forth in Exhibit D-1 hereto and a monthly default loan report in the format
set
forth in Exhibit D-2 hereto (or in such other format mutually agreed between
the
Servicer and the Master Servicer) relating to the period ending on the last
day
of the preceding calendar month and (ii) all such information required pursuant
to clause (i) above on a magnetic tape or other similar media reasonably
acceptable to the Master Servicer. The Servicer shall include in the monthly
remittance advice information regarding each Employee Mortgage Loan. The format
of this monthly reporting may be amended from time to time to the extent
necessary to comply with applicable law or the terms of the Sale and Servicing
Agreement.
Not
later
than the seventeenth day of each month, the Servicer shall furnish to the Master
Servicer (a) a monthly payoff remittance advice regarding any Principal
Prepayments in full applied to the related Revolving Credit Loan on or after
the
seventeenth day of the month preceding the month of such reporting date, but
on
or before the sixteenth day of the month of such reporting date, containing
such
information and in such format as is mutually acceptable to the Master Servicer
and the Servicer, and in any event containing sufficient information to permit
the Master Servicer to properly report Principal Prepayment in full information
to the Indenture Trustee under the Sale and Servicing Agreement and (b) all
such
information required pursuant to clause (a) above in electronic format, on
magnetic tape or other similar media reasonably acceptable to the Master
Servicer.
27
In
addition, no later than March 15 of each calendar year, commencing March 15,
20[__], the Servicer shall furnish to each Person who was an owner of the
Revolving Credit Loans at any time during such calendar year as required by
applicable law or if not required by applicable law, at the request of such
owner as to the aggregate of remittances for the applicable portion of such
year.
The
Master Servicer may request that the Servicer provide, at the Master Servicer’s
expense, an appraisal or a broker price opinion on any Revolving Credit Loan
which is 90 days or more delinquent. The Servicer shall use its best efforts
to
deliver such appraisal or broker price opinion to the Master Servicer within
15
calendar days after such request.
Such
obligation of the Servicer shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Servicer
pursuant to any requirements of the Internal Revenue Code as from time to time
are in force.
Beginning
with calendar year 20[__], the Servicer shall provide the Master Servicer with
such information concerning the Revolving Credit Loans as is necessary for
the
Master Servicer or the Indenture Trustee to prepare the Trust’s federal income
tax return as the Master Servicer or the Indenture Trustee may reasonably
request from time to time.
The
Servicer shall promptly notify the Securities Administrator, the Master Servicer
and the Depositor (i) of any legal proceedings pending against the Servicer
of
the type described in Item 1117 (§
229.1117) of
Regulation AB and (ii) if the Servicer shall become (but only to the extent
not
previously disclosed to the Securities Administrator, the Master Servicer and
the Depositor) at any time an affiliate of any of the Sponsor, the Indenture
Trustee, the Master Servicer, another Servicer, the Securities Administrator,
any Originator contemplated by Item 1110 (§
229.1110) of
Regulation AB, any significant obligor contemplated by Item 1112 (§
229.1112) of
Regulation AB, any enhancement or support provider contemplated by Items 1114
or
1115 (§§
229.1114-1115) of
Regulation AB or any other material party to the Trust contemplated by Item
1100(d)(1) (§
229.1100(d)(1)) of
Regulation AB.
Section
4.03 Monthly
Advances by Servicer.
On
the
Business Day immediately preceding each Remittance Date, the Servicer shall
deposit in the Custodial Account from its own funds or from amounts held for
future distribution, or both, an amount equal to the aggregate of all Monthly
Advances relating to Monthly Payments which were due on the Revolving
Credit
Loans
during the applicable Due Period and which were delinquent at the close of
business on the immediately preceding Determination Date or which were deferred
pursuant to Section 3.01. The Servicer’s obligation to make such Monthly
Advances as to any Revolving
Credit
Loan
will continue through the last Monthly Payment due prior to the payment in
full
of the Revolving
Credit
Loan, or
through the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including Insurance Proceeds and Condemnation Proceeds) with respect to the
Revolving
Credit
Loan
unless the Servicer deems such Monthly Advances to be unrecoverable, as
evidenced by an Officer’s Certificate of the Servicer delivered to the Master
Servicer.
28
ARTICLE
V.
GENERAL
SERVICING PROCEDURES
Section
5.01 Servicing
Compensation.
As
consideration for servicing the Revolving Credit Loans subject to this
Agreement, the Servicer shall retain (i) the relevant Servicing Fee for each
Revolving Credit Loan remaining subject to this Agreement during any month
and
(ii) Ancillary Income. In addition, if at any time the Servicer is the Retained
Interest Holder with respect to any Revolving Credit Loans, then the Servicer,
as the Retained Interest Holder, shall retain an amount equal to the Retained
Interest relating to such Revolving Credit Loans; provided, that (i) the
Indenture Trustee and the Master Servicer shall have no obligation to make
payment of the Retained Interest to the Servicer and (ii) the Servicer’s right
to retain the Retained Interest is limited to (and the Retained Interest may
only be retained from) the interest portion (including recoveries with respect
to interest from Liquidation Proceeds to the extent permitted by Section 3.04
of
this Agreement) of the Monthly Payments collected by the Servicer with respect
to those Revolving Credit Loans for which payment is in fact made of the entire
amount of the Monthly Payment. The Servicing Fee shall be payable monthly.
The
Servicing Fees shall be payable only at the time of and with respect to those
Revolving Credit Loans for which payment is in fact made of the entire amount
of
the Monthly Payment or as otherwise provided in Section 3.04. The obligation
of
the Trust (if any) to pay the Servicing Fees is limited as provided in Section
3.04. The aggregate of the Servicing Fees payable to the Servicer for any month
with respect to the Revolving Credit Loans shall be reduced by any Prepayment
Interest Shortfall Amount with respect to such month. Any Prepayment Interest
Excess Amount shall be retained by, or paid to, the Servicer as a part of the
Servicing Fee.
The
Servicer shall be required to pay all expenses incurred by it in connection
with
its servicing activities hereunder and shall not be entitled to reimbursement
thereof except as specifically provided for herein.
Section
5.02 Annual
Audit Report.
On
or
before March 1st of each year, beginning with March 1, 20[__], the Servicer
shall, at its own expense, cause a firm of independent public accountants (who
may also render other services to Servicer), which is a member of the American
Institute of Certified Public Accountants, to furnish to the Seller, the
Indenture Trustee, the Depositor and the Master Servicer (i) year-end audited
(if available) financial statements of the Servicer and (ii) a report to the
effect that such firm that attests to, and reports on, the assessment made
by
such asserting party pursuant to Section 5.04 below, which report shall be
made
in accordance with standards for attestation engagements issued or adopted
by
the Public Company Accounting Oversight Board.
29
Section
5.03 Annual
Officer’s Certificate.
(a)
On
or
before March 1st of each year, beginning with March 1, 20[__], the Servicer,
at
its own expense, will deliver to the Seller, the Depositor, the Indenture
Trustee and the Master Servicer (i) with respect to the period ending on the
immediately preceding December 31, a Servicing Officer’s certificate stating, as
to each signer thereof, that (1) a review of the activities of the Servicer
during such preceding calendar year or portion thereof and of its performance
under this Agreement has been made under such Servicing Officer’s supervision
and (2) to the best of such officers’ knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Agreement in all
material respects throughout such year, or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such Servicing Officer’s and the nature and status thereof
including the steps being taken by the Servicer to remedy such default and/or
(ii) such other certificates as may be required under Item
1123
(§
229.1123) of
Regulation AB
or other
applicable law or regulation.
(b)
For
so
long as a certificate under the Xxxxxxxx-Xxxxx Act of 2002, as amended,
(“Xxxxxxxx-Xxxxx”) is required to be given on behalf of the Trust, no later than
March 1st of each year (or if not a Business Day, the immediately preceding
Business Day), beginning with March 1, 20[__], or at any other time that the
Master Servicer or the Depositor provides a certification pursuant to
Xxxxxxxx-Xxxxx and upon thirty (30) days’ written request of such parties, a
Servicing Officer of the Servicer shall execute and deliver an Officer’s
Certificate to the Master Servicer, the Indenture Trustee and the Depositor
for
the benefit of the Trust, the Master Servicer and the Depositor and their
officers, directors and affiliates, in the form of Exhibit E hereto or as may
be
required by applicable law or regulation.
(c) The
Servicer shall indemnify and hold harmless the Master Servicer, the Depositor
and their respective officers, directors, agents and affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 5.03 or the negligence, bad
faith or willful misconduct of the Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Master Servicer and/or the Depositor, then the Servicer agrees
that
it shall contribute to the amount paid or payable by the Master Servicer and/or
the Depositor as a result of the losses, claims, damages or liabilities of
the
Master Servicer and/or the Depositor in such proportion as is appropriate to
reflect the relative fault of the Master Servicer and/or the Depositor on the
one hand and the Servicer on the other in connection with a breach of the
Servicer’s obligations under this Section 5.03 or the Servicer’s negligence, bad
faith or willful misconduct in connection therewith.
Section
5.04 Compliance
with Applicable Servicing Criteria.
On
or
before March 1 of each calendar year, the Servicer shall deliver to the
Indenture Trustee, the Master Servicer and the Depositor a report regarding
its
assessment of compliance with the servicing criteria specified in paragraph
(d)
of Item 1122 of Regulation AB (§ 229.1122(d)), as of and for the period ending
the end of the fiscal year ending no later than December 31 of the year prior
to
the year of delivery of the report, with respect to asset-backed security
transactions taken as a whole in which the Servicer is performing any of the
servicing criteria specified in paragraph (d) of Item 1122 of Regulation AB
(§
229.1122(d)) that it is performing pursuant to its obligations under this
Agreement, and that are backed by the same asset type backing such asset-backed
securities. Each such report shall include all of the statements required under
paragraph (a) of Item 1122 of Regulation AB (§ 229.1122(a)).
30
Section
5.05 Transfers
of Mortgaged Property.
The
Servicer shall use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note and to deny assumption by the person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note; provided that, if in
the
Servicer's prudent business judgment, it determines that an assumption of the
Revolving Credit Loan is in the best interests of the Trust, it shall deliver
notice of such determination to the Master Servicer and may permit such
assumption if approved by the Master Servicer. When the Mortgaged Property
has
been conveyed by the Mortgagor, the Servicer shall, to the extent it has
knowledge of such conveyance, so long as the Master Servicer has not consented
to an assumption in accordance with the preceding sentence, exercise its rights
to accelerate the maturity of such Revolving Credit Loan under the “due-on-sale”
clause applicable thereto, provided, however, that the Servicer shall not be
required to take such action if the Servicer, in its prudent business judgment,
believes it is not in the best interests of the Trust and shall not exercise
such rights if prohibited by law from doing so.
If
the
Servicer reasonably believes it is unable under applicable law to enforce such
“due-on-sale” clause or if the Master Servicer approves such assumption pursuant
to the preceding paragraph, the Servicer shall enter into (i) an assumption
and
modification agreement with the person to whom such property has been conveyed,
pursuant to which such person becomes liable under the Mortgage Note and the
original Mortgagor remains liable thereon or (ii) in the event the Servicer
is
unable under applicable law to require that the original Mortgagor remain liable
under the Mortgage Note and the Servicer has the prior consent of the primary
mortgage guaranty insurer, a substitution of liability agreement with the owner
of the Mortgaged Property pursuant to which the original Mortgagor is released
from liability and the owner of the Mortgaged Property is substituted as
Mortgagor and becomes liable under the Mortgage Note; provided that no such
substitutions should be permitted unless such person satisfies the underwriting
criteria of the Servicer and has a credit risk rating at least equal to that
of
the original Mortgagor. The Revolving Credit Loan, as assumed, shall conform
in
all respects to the requirements, representations and warranties of this
Agreement. The Servicer shall notify the Master Servicer that any such
assumption or substitution agreement has been contemplated by forwarding to
the
Master Servicer a copy of such assumption or substitution agreement (indicating
the Mortgage File to which it relates). The Servicer shall forward an original
copy of such agreement to the Custodian to be held by the Custodian with the
other documents related to such Revolving Credit Loan. The Servicer shall be
responsible for recording any such assumption or substitution agreements. In
connection with any such assumption or substitution agreement, the Monthly
Payment on the related Revolving Credit Loan shall not be changed but shall
remain as in effect immediately prior to the assumption or substitution, the
Mortgage Interest Rate, the stated maturity or the outstanding principal amount
of such Revolving Credit Loan shall not be changed nor shall any required
monthly payments of principal or interest be deferred or forgiven. Any
assumption fee collected by the Servicer for entering into an assumption
agreement shall be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, none of the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Revolving
Credit Loan or the outstanding principal amount of the Revolving Credit Loan
shall be changed.
31
ARTICLE
VI.
REPRESENTATIONS,
WARRANTIES
AND
AGREEMENTS
Section
6.01 Representations,
Warranties and Agreements of the Servicer.
The
Servicer, as a condition to the consummation of the transactions contemplated
hereby, hereby makes the following representations and warranties to the Seller,
the Master Servicer and the Indenture Trustee as of the Closing
Date:
(a)
Due
Organization and Authority.
The
Servicer is a corporation duly organized, validly existing and in good standing
under the laws of the State of [__] and has all licenses necessary to carry
on
its business as now being conducted and is licensed, qualified and in good
standing in each state where a Mortgaged Property is located if the laws of
such
state require licensing or qualification in order to conduct business of the
type conducted by the Servicer, and in any event the Servicer is in compliance
with the laws of any such state to the extent necessary to ensure the
enforceability of the terms of this Agreement; the Servicer has the full power
and authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by
the
Servicer and the consummation of the transactions contemplated hereby have
been
duly and validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Servicer and all requisite action has been taken
by the Servicer to make this Agreement valid and binding upon the Servicer
in
accordance with its terms;
(b)
Ordinary
Course of Business.
The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Servicer;
(c)
No
Conflicts.
Neither
the execution and delivery of this Agreement, the acquisition of the servicing
responsibilities by the Servicer or the transactions contemplated hereby, nor
the fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Servicer’s organizational documents or any legal
restriction or any agreement or instrument to which the Servicer is now a party
or by which it is bound, or constitute a default or result in an acceleration
under any of the foregoing, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Servicer or its property
is
subject, or impair the ability of the Servicer to service the Revolving Credit
Loans, or impair the value of the Revolving Credit Loans;
(d)
Ability
to Perform.
The
Servicer does not believe, nor does it have any reason or cause to believe,
that
it cannot perform each and every covenant contained in this
Agreement;
32
(e)
No
Litigation Pending.
There
is no action, suit, proceeding or investigation pending or threatened against
the Servicer which, either in any one instance or in the aggregate, may result
in any material adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment of the
right
or ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or which
would draw into question the validity of this Agreement or of any action taken
or to be taken in connection with the obligations of the Servicer contemplated
herein, or which would be likely to impair materially the ability of the
Servicer to perform under the terms of this Agreement;
(f)
No
Consent Required.
No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Servicer
of
or compliance by the Servicer with this Agreement;
(g)
Ability
to Service.
The
Servicer is an approved seller/servicer for Xxxxxx Xxx or Xxxxxxx Mac, with
the
facilities, procedures and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Revolving Credit Loans.
The
Servicer is in good standing to service mortgage loans for either Xxxxxx Mae
or
Xxxxxxx Mac. The Servicer is a member in good standing of the MERS
system;
(h)
No
Untrue Information.
Neither
this Agreement nor any statement, report or other document furnished or to
be
furnished pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of fact or omits to state
a
fact necessary to make the statements contained therein not
misleading;
(i)
No
Commissions to Third Parties.
The
Servicer has not dealt with any broker or agent or anyone else who might be
entitled to a fee or commission in connection with this transaction other than
the Seller; and
(j)
Fair
Credit Reporting Act.
The
Servicer for each mortgage loan has
fully
furnished, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly
basis.
Section
6.02 Remedies
for Breach of Representations and Warranties of the Servicer.
It
is
understood and agreed that the representations and warranties set forth in
Section 6.01 shall survive the engagement of the Servicer to perform the
servicing responsibilities as of the Closing Date or Servicing Transfer Date,
as
applicable, hereunder and the delivery of the Servicing Files to the Servicer
and shall inure to the benefit of the Seller, the Trust and the Indenture
Trustee. Upon discovery by either the Servicer, the Master Servicer or the
Seller of a breach of any of the foregoing representations and warranties which
materially and adversely affects the ability of the Servicer to perform its
duties and obligations under this Agreement or otherwise materially and
adversely affects the value of the Revolving Credit Loans, the Mortgaged
Property or the priority of the security interest on such Mortgaged Property
or
the interest of the Seller, the Trust or the Indenture Trustee, the party
discovering such breach shall give prompt written notice to the
other.
33
Within
60
days of the earlier of either discovery by or notice to the Servicer of any
breach of a representation or warranty set forth in Section 6.01 which
materially and adversely affects the ability of the Servicer to perform its
duties and obligations under this Agreement or otherwise materially and
adversely affects the value of the Revolving Credit Loans, the Mortgaged
Property or the priority of the security interest on such Mortgaged Property,
the Servicer shall use its Best Efforts promptly to cure such breach in all
material respects and, if such breach cannot be cured, the Servicer shall,
at
the Indenture Trustee’s or the Master Servicer’s option, assign the Servicer’s
rights and obligations under this Agreement (or respecting the affected
Revolving Credit Loans) to a successor Servicer. Such assignment shall be made
in accordance with Sections 9.01 and 9.02.
In
addition, the Servicer shall indemnify the Seller, Trust, the Indenture Trustee
and the Master Servicer (and each of their respective directors, officers,
employees and agents) and the Trust, and hold each of them harmless against
any
Costs resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Servicer representations
and
warranties contained in this Agreement. It is understood and agreed that the
remedies set forth in this Section 6.02 constitute the sole remedies of the
Seller, the Master Servicer and the Trustee respecting a breach of the foregoing
representations and warranties.
Any
cause
of action against the Servicer relating to or arising out of the breach of
any
representations and warranties made in Section 6.01 shall accrue upon (i)
discovery of such breach by the Servicer or notice thereof by the Seller or
the
Master Servicer to the Servicer, (ii) failure by the Servicer to cure such
breach within the applicable cure period, and (iii) demand upon the Servicer
by
the Seller or the Master Servicer for compliance with this
Agreement.
Section
6.03 Additional
Indemnification by the Servicer; Third Party Claims.
The
Servicer shall indemnify the Seller, the Depositor, the Trustee and the Master
Servicer (and each of their respective directors, officers, employees and
agents) and the Trust Fund, and hold them harmless against any and all Costs
that any such indemnified party may sustain in any way related to (i) the
failure of the Servicer to perform its duties and service the Revolving Credit
Loans in material compliance with the terms of this Agreement (including, but
not limited to its obligation to provide any certification pursuant to Sections
5.03(b) and 5.04 hereunder) or for any inaccurate or misleading information
provided in the certifications required pursuant to Sections 5.03(b) and 5.04
or
(ii) the failure of the Servicer to cause any event to occur or not to occur
which would have occurred or would not have occurred, as applicable, if the
Servicer were applying Accepted Servicing Practices under this Agreement. The
Servicer shall immediately notify the Seller, the Depositor, the Master
Servicer, the Trustee or any other relevant party if a claim is made by a third
party with respect to this Agreement or the Revolving Credit Loans, assume
(with
the prior written consent of the indemnified party in the event of an
indemnified claim) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or any other
party in respect of such claim and follow any written instructions received
from
such indemnifying party in connection with such claim. Subject to the Servicer’s
indemnification pursuant to Section 6.02, or the failure of the Servicer to
service and administer the Revolving Credit Loans in material compliance with
the terms of this Agreement, the Trust Fund shall indemnify the Servicer and
hold the Servicer harmless against any and all Costs that the Servicer may
sustain in connection with any legal action relating to this Agreement, the
Certificates or the origination or Servicing of the Revolving Credit Loans
by
any prior owner or servicer, other than any Costs incurred by reason of the
Servicer’s willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of its reckless disregard of obligations and
duties hereunder.
34
Section
6.04 [Reserved].
Section
6.05 Indemnification
with Respect to Certain Taxes and Loss of REMIC Status.
In
the
event that any REMIC fails to qualify as a REMIC, loses its status as a REMIC,
or incurs federal, state or local taxes as a result of a prohibited transaction
or prohibited contribution under the REMIC Provisions due to the negligent
performance by the Servicer of its duties and obligations set forth herein,
the
Servicer shall indemnify the Holder of the related Residual Certificate, the
Master Servicer, the Trustee and the Trust Fund (and each of their respective
directors, officers, employees and agents) against any and all losses, claims,
damages, liabilities or expenses (“Losses”) resulting from such negligence;
provided,
however,
that the
Servicer shall not be liable for any such Losses attributable to the action
or
inaction of the Trustee, the Depositor or the Holder of such Residual
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which
the
Servicer has relied. The foregoing shall not be deemed to limit or restrict
the
rights and remedies of the Holder of such Residual Certificate, the Trustee
and
the Trust Fund now or hereafter existing at law or in equity or otherwise.
Notwithstanding the foregoing, however, in no event shall the Servicer have
any
liability (1) for any action or omission that is taken in accordance with and
in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement, (2) for any Losses other than arising out of a
negligent performance by the Servicer of its duties and obligations set forth
herein, and (3) for any special or consequential damages to Certificateholders
(in addition to payment of principal and interest on the
Certificates).
Section
6.06 Reporting
Requirements of the Commission and Indemnification.
Notwithstanding
any other provision of this Agreement, the Servicer shall (i) agree to such
modifications and enter into such amendments to this Agreement as may be
necessary, in the judgment of the Depositor, the Master Servicer and their
respective counsel, to comply with any rules promulgated by the U.S. Securities
and Exchange Commission (the “Commission”) and any interpretations thereof by
the staff of the Commission (collectively, “SEC Rules”) and (ii) promptly upon
request provide to the Depositor for inclusion in any periodic report required
to be filed under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), such items of information regarding this Agreement and matters related to
the Servicer, including as applicable (by way of example and not limitation),
a
description of any material litigation or governmental action or proceeding
involving the Servicer or its affiliates (collectively, the “Servicer
Information”), provided,
that
such
information shall be required to be provided by the Servicer only to the extent
that such shall be determined by the Depositor in its sole discretion and its
counsel to be necessary or advisable to comply with any SEC Rules.
35
The
Servicer
hereby
agrees to indemnify and hold harmless the Depositor, the Master Servicer, their
respective officers and directors and each person, if any, who controls the
Depositor or Master Servicer within the meaning of Section 15 of the Securities
Act of 1933, as amended (the “Act”), or Section 20 of the Exchange Act, from and
against any and all losses, claims, expenses, damages or liabilities to which
the Depositor, the Master Servicer, their respective officers or directors
and
any such controlling person may become subject under the Act or otherwise,
as
and when such losses, claims, expenses, damages or liabilities are incurred,
insofar as such losses, claims, expenses, damages or liabilities (or actions
in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Servicer
Information or
arise
out of, or are based upon, the omission or alleged omission to state therein
any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and will reimburse the Depositor, the Master Servicer, their
respective officers and directors and any such controlling person for any legal
or other expenses reasonably incurred by it or any of them in connection with
investigating or defending any such loss, claim, expense, damage, liability
or
action, as and when incurred; provided,
however,
that
the Servicer
shall
be
liable only insofar as such untrue statement or alleged untrue statement or
omission or alleged omission relates solely to the information in the
Servicer
Information
furnished to the Depositor or Master Servicer by or on behalf of the
Servicer
specifically
in connection with this Agreement.
ARTICLE
VII.
THE
SERVICER
Section
7.01 Merger
or Consolidation of the Servicer.
The
Servicer shall keep in full effect its existence, rights and franchises as
a
corporation, and shall obtain and preserve its qualification to do business
as a
foreign entity in each jurisdiction in which such qualification is or shall
be
necessary to protect the validity and enforceability of this Agreement or any
of
the Revolving Credit Loans and to perform its duties under this
Agreement.
Any
Person into which the Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to the business of the Servicer,
shall be the successor of the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, provided, however, that the
successor or surviving Person shall be an institution (i) having a net worth
of
not less than $25,000,000, and (ii) which is a Xxxxxx Mae or Xxxxxxx Mac
approved servicer in good standing.
36
Section
7.02 Limitation
on Liability of the Servicer and Others.
Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Seller, the Master Servicer or
the
Trustee for any action taken or for refraining from the taking of any action
in
good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Servicer or any such person
against any breach of warranties or representations made herein, or failure
to
perform its obligations in strict compliance with any standard of care set
forth
in this Agreement, or any liability which would otherwise be imposed by reason
of any breach of the terms and conditions of this Agreement. The Servicer and
any director, officer, employee or agent of the Servicer may rely in good faith
on any document of any kind prima facie properly executed and submitted by
any
Person respecting any matters arising hereunder. The Servicer shall not be
under
any obligation to appear in, prosecute or defend any legal action which is
not
incidental to its duties to service the Revolving Credit Loans in accordance
with this Agreement and which in its opinion may involve it in any expense
or
liability, provided, however, that the Servicer may, with the consent of the
Master Servicer, undertake any such action which it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto. In such event, the Servicer shall be entitled to reimbursement from
the
Trust Fund for the reasonable legal expenses and costs of such
action.
Section
7.03 Limitation
on Resignation and Assignment by the Servicer.
The
Seller has entered into this Agreement with the Servicer in reliance upon the
independent status of the Servicer, and the representations as to the adequacy
of its servicing facilities, plant, personnel, records and procedures, its
integrity, reputation and financial standing, and the continuance thereof.
Therefore, the Servicer shall neither assign its rights under this Agreement
or
the servicing hereunder nor delegate its duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets without, in each case, the prior written consent of the
Seller (as owner of the servicing rights relating to the Revolving Credit Loans)
and the Master Servicer, which consent, in the case of an assignment of rights
or delegation of duties, shall be granted or withheld in the discretion of
the
Seller and the Master Servicer, and which consent, in the case of a sale or
disposition of all or substantially all of the property or assets of the
Servicer, shall not be unreasonably withheld; provided, that in each case,
there
must be delivered to the Master Servicer and the Trustee a letter from each
Rating Agency to the effect that such transfer of servicing or sale or
disposition of assets will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Certificates.
Notwithstanding the foregoing, the Servicer, without the consent of the Seller
(as
owner
of the servicing rights relating to the Revolving Credit Loans),
the
Master Servicer or the Trustee, may retain third party contractors to perform
certain servicing and loan administration functions, including without
limitation, hazard insurance administration, tax payment and administration,
flood certification and administration, collection services and similar
functions; provided, that the retention of such contractors by Servicer shall
not limit the obligation of the Servicer to service the Revolving
Credit Loans
pursuant to the terms and conditions of this Agreement.
37
The
Servicer shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Servicer and the Master Servicer or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced
by
an Opinion of Counsel to such effect delivered to the Master Servicer and the
Trustee which Opinion of Counsel shall be in form and substance acceptable
to
the Master Servicer and the Trustee. No such resignation shall become effective
until a successor shall have assumed the Servicer’s responsibilities and
obligations hereunder in the manner provided in Section 9.01.
Without
in any way limiting the generality of this Section 7.03, in the event that
the
Servicer either shall assign this Agreement or the servicing responsibilities
hereunder or delegate its duties hereunder or any portion thereof or sell or
otherwise dispose of all or substantially all of its property or assets, without
the prior written consent of the Seller, the Trustee and the Master Servicer,
then the Seller, the Trustee or the Master Servicer shall have the right to
terminate this Agreement upon notice given as set forth in Section 8.01, without
any payment of any penalty or damages and without any liability whatsoever
to
the Servicer or any third party.
Section
7.04 [Subservicing
Agreements and Successor Subservicer.
(a) The
Servicer may enter into subservicing agreements for any servicing and
administration of the Revolving Credit Loans with any institution which (i)
is
an approved Xxxxxx Xxx or Xxxxxxx Mac Seller/Servicer and (ii) which represents
and warrants that it is in compliance with the laws of each state as necessary
to enable it to perform its obligations under such subservicing agreement.
For
this purpose, subservicing shall not be deemed to include outsourcing routine
tasks to third parties including, but not limited to, taxes, insurance, property
inspection, reconveyance, collection or brokering REO Property. The Servicer
shall give prior written notice to the Master Servicer, the Depositor and the
Trustee of the appointment of any subservicer or other subcontractor and shall
furnish to the Master Servicer a copy of such subservicing agreement. For
purposes of this Agreement, the Servicer shall be deemed to have received
payments on Revolving Credit Loans immediately upon receipt by any subservicer
of such payments. Any such subservicing agreement shall be consistent with
and
not violate the provisions of this Agreement. Each subservicing agreement shall
provide that a successor servicer shall have
the
option to terminate such agreement without payment of any fees if the
predecessor servicer is terminated or resigns.
(b) The
Servicer may terminate any subservicing agreement to which it is a party in
accordance with the terms and conditions of such subservicing agreement and
either itself directly service the related Revolving Credit Loans or
enter
into a subservicing agreement with a successor subservicer or subcontractor
that
qualifies under Section 7.04(a).
(c) Notwithstanding
any subservicing agreement or the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a subservicer or other
subcontractor or reference to actions taken through a subservicer or otherwise,
(i) the Servicer shall remain obligated and primarily liable to the Trustee,
the
Master Servicer and the Certificateholders for the servicing and administering
of the Revolving Credit Loans in accordance with the provisions hereof without
diminution of such obligation or liability by virtue of such subservicing
agreements or arrangements or by virtue of indemnification from the subservicer
and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Revolving Credit Loans
and
(ii) any subservicer or other subcontractor that performs any of the functions
identified in Item 1122(d) of Regulation AB must agree in writing that, if
the
Master Servicer or the Depositor determines that such subcontractor was
“participating in the servicing function” within the meaning of Item 1122, such
subcontractor will comply with the provisions of Sections 5.02, 5.03 and 5.04
to
the same extent as if such subservicer were the Servicer. The Servicer shall
be
entitled to enter into any agreement with a subservicer for indemnification
of
the Servicer by such subservicer and nothing contained in this Agreement shall
be deemed to limit or modify such indemnification.]
38
ARTICLE
VIII.
TERMINATION
Section
8.01 Termination
for Cause.
This
Agreement shall be terminable at the option of the Seller or the Master Servicer
if any of the following events of default exist on the part of the
Servicer:
(i)
any
failure by the Servicer to remit to the Master Servicer any payment required
to
be made under the terms of this Agreement which continues unremedied for a
period of two Business Days after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Master Servicer; or
(ii)
failure
by the Servicer duly to observe or perform in any material respect any other
of
the covenants or agreements on the part of the Servicer set forth in this
Agreement which continues unremedied for a period of 30 days; or
(iii)
failure
by the Servicer to maintain its license to do business or service residential
mortgage loans in any jurisdiction, if required by such jurisdiction, where
the
Mortgaged Properties are located; or
(iv)
a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, including bankruptcy, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Servicer and such decree or order shall
have
remained in force undischarged or unstayed for a period of 60 days;
or
(v)
the
Servicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer or of or
relating to all or substantially all of its property; or
(vi)
the
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,
bankruptcy or reorganization statute, make an assignment for the benefit of
its
creditors, voluntarily suspend payment of its obligations or cease its normal
business operations for three Business Days; or
39
(vii)
the
Servicer ceases to meet the qualifications of a Xxxxxx Xxx or Xxxxxxx Mac
seller/servicer;
(viii)
the
Servicer attempts to assign the servicing of the Revolving Credit Loans or
its
right to servicing compensation hereunder or the Servicer attempts to sell
or
otherwise dispose of all or substantially all of its property or assets or
to
assign this Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof (to other than a third party in
the
case of outsourcing routine tasks including, but not limited to, taxes,
insurance, property inspection, reconveyance, collection or brokering REO
Property), in each case without complying fully with the provisions of Section
7.03; and
(ix)
[applicable
trigger events].
In
each
and every such case, so long as an event of default shall not have been
remedied, in addition to whatever rights the Seller or the Master Servicer
may
have at law or equity to damages, including injunctive relief and specific
performance, the Seller or the Master Servicer, by notice in writing to the
Servicer, may terminate all the rights and obligations of the Servicer under
this Agreement and in and to the servicing contract established hereby and
the
proceeds thereof.
Upon
receipt by the Servicer of such written notice, all authority and power of
the
Servicer under this Agreement, whether with respect to the Revolving Credit
Loans or otherwise, shall pass to and be vested in a successor Servicer
appointed by the Seller and the Master Servicer. Upon written request from
the
Seller, the Servicer shall prepare, execute and deliver to the successor entity
designated by the Seller any and all documents and other instruments, place
in
such successor’s possession all Servicing Files, and do or cause to be done all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, including but not limited to the transfer and endorsement
or assignment of the Revolving Credit Loans and related documents, at the
Servicer’s sole expense. The Servicer shall cooperate with the Seller and the
Master Servicer and such successor in effecting the termination of the
Servicer’s responsibilities and rights hereunder, including without limitation,
the transfer to such successor for administration by it of all cash amounts
which shall at the time be credited by the Servicer to the Custodial Account
or
Escrow Account or thereafter received with respect to the Revolving Credit
Loans.
By
a
written notice, the Seller and the Master Servicer may waive any default by
the
Servicer in the performance of its obligations hereunder and its consequences.
Upon any waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
40
Section
8.02 Termination
Without Cause.
This
Agreement shall terminate upon: (i) the later of (a) the distribution of the
final payment or liquidation proceeds on the last Revolving Credit Loan to
the
Master Servicer (or advances by the Servicer for the same), and (b) the
disposition of all REO Property acquired upon foreclosure of the last Revolving
Credit Loan and the remittance of all funds due hereunder, (ii) mutual consent
of the Servicer, the Seller (as owner of the servicing rights relating to the
Revolving Credit Loans), the Trustee and the Master Servicer in writing or
(iii)
at the sole discretion of the Seller (acting in its capacity as owner of the
servicing rights relating to the Revolving Credit Loans). Any such termination
pursuant to clause (iii) above shall be with 30 days’ prior notice, in writing
and delivered to the Trustee, the Master Servicer and the Servicer by registered
mail to the addresses set forth in Section 9.03 of this Agreement (in the case
of the Servicer) or in the Trust Agreement (in the case of the Trustee or the
Master Servicer). The Servicer shall comply with the termination procedures
set
forth in Sections 7.03, 8.01 and 9.01 hereof. The Master Servicer or the Trustee
shall have no right to terminate the Servicer pursuant to this Section 8.02.
In
connection with a termination by the Seller pursuant to clause (iii) of this
Section 8.02, the Servicer shall be reimbursed for all unreimbursed
out-of-pocket Servicing Advances, Monthly Advances and Servicing Fees and other
reasonable and necessary out-of-pocket costs associated with any transfer of
servicing at the time of such transfer of servicing. Any invoices received
by
the Servicer after termination will be forwarded to the Seller or the successor
servicer for payment within thirty (30) days of receipt from the Servicer.
ARTICLE
IX.
MISCELLANEOUS
PROVISIONS
Section
9.01 Successor
to the Servicer.
Simultaneously
with the termination of the Servicer’s responsibilities and duties under this
Agreement (a) pursuant to Sections 6.02, 7.03, 8.01 or 8.02(ii), the Master
Servicer shall (i) succeed to and assume all of the Servicer’s responsibilities,
rights, duties and obligations under this Agreement, or (ii) appoint a successor
having the characteristics set forth in clauses (i) and (ii) of Section 7.01
and
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the Servicer under this Agreement simultaneously with the
termination of the Servicer’s responsibilities, duties and liabilities under
this Agreement; or (b) pursuant to a termination under Section 8.02(iii), the
Seller (as owner of the servicing rights relating to the Revolving Credit Loans)
shall appoint a successor having the characteristics set forth in clauses (i)
and (ii) of Section 7.01 and which shall succeed to all rights and assume all
of
the responsibilities, duties and liabilities of the Servicer under this
Agreement simultaneously with the termination of the Servicer’s
responsibilities, duties and liabilities under this Agreement. Any successor
to
the Servicer shall be subject to the approval of the Master Servicer and, to
the
extent required by the Trust Agreement, the Trustee and such successor, shall
be
a member in good standing of the MERS system (if any of the Revolving Credit
Loans are MERS Eligible Revolving Credit Loans, unless such Revolving Credit
Loans are withdrawn from MERS and Assignments of Mortgage are recorded in favor
of the Trustee at the expense of the successor Servicer). Any approval of a
successor servicer by the Master Servicer and, to the extent required by the
Trust Agreement, the Trustee, shall, if the successor servicer is not at that
time a servicer of other Revolving Credit Loans for the Trust Fund, be
conditioned upon the receipt by the Master Servicer and the Trustee of a letter
from each Rating Agency to the effect that such transfer of servicing will
not
result in a qualification, withdrawal or downgrade of the then-current rating
of
any of the Certificates. In connection with such appointment and assumption,
the
Master Servicer or the Seller, as applicable, may make such arrangements for
the
compensation of such successor out of payments on Revolving Credit Loans as
it
and such successor shall agree, provided, however, that no such compensation
shall be in excess of that permitted the Servicer under this Agreement. In
the
event that the Servicer’s duties, responsibilities and liabilities under this
Agreement should be terminated pursuant to the aforementioned sections, the
Servicer shall discharge such duties and responsibilities during the period
from
the date it acquires knowledge of such termination until the effective date
thereof with the same degree of diligence and prudence which it is obligated
to
exercise under this Agreement, and shall take no action whatsoever that might
impair or prejudice the rights or financial condition of its successor. The
resignation or removal of the Servicer pursuant to the aforementioned sections
shall not become effective until a successor shall be appointed pursuant to
this
Section 9.01 and shall in no event relieve the Servicer of the representations
and warranties made pursuant to Sections 6.01 and the remedies available to
the
Master Servicer and the Seller under Section 6.02 and 6.03, it being understood
and agreed that the provisions of such Sections 6.01, 6.02 and 6.03 shall be
applicable to the Servicer notwithstanding any such resignation or termination
of the Servicer, or the termination of this Agreement. Neither the Master
Servicer, in its capacity as successor servicer, nor any other successor
servicer, shall be responsible for the lack of information and/or documents
that
are not transferred to it by the Servicer and that it cannot otherwise obtain
through reasonable efforts.
41
Within
a
reasonable period of time, but in no event longer than 30 days of the
appointment of a successor entity, the Servicer shall prepare, execute and
deliver to the successor entity any and all documents and other instruments,
place in such successor’s possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes
of
such notice of termination, including but not limited to the transfer and
endorsement of the Mortgage Notes and related documents, and the preparation
and
recordation of Assignments of Mortgage. The Servicer shall cooperate with the
Trustee, the Master Servicer or the Seller, as applicable, and such successor
in
effecting the termination of the Servicer’s responsibilities and rights
hereunder and the transfer of servicing responsibilities to the successor
Servicer, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Revolving Credit Loans.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Trustee, the Servicer, the Master Servicer and the Seller an instrument
(i)
accepting such appointment, wherein the successor shall make the representations
and warranties set forth in Section 6.01 (including a representation that the
successor Servicer is a member of MERS, unless none of the Revolving Credit
Loans are MERS Revolving Credit Loans or MERS Eligible Revolving Credit Loans
or
any such Revolving Credit Loans have been withdrawn from MERS and Assignments
of
Mortgage are recorded in favor of the Trustee) and (ii) an assumption of the
due
and punctual performance and observance of each covenant and condition to be
performed and observed by the Servicer under this Agreement, whereupon such
successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer, with like effect
as if originally named as a party to this Agreement. Any termination or
resignation of the Servicer or termination of this Agreement pursuant to
Sections 6.02, 7.03, 8.01 or 8.02 shall not affect any claims that the Master
Servicer or the Trustee may have against the Servicer arising out of the
Servicer’s actions or failure to act prior to any such termination or
resignation. In addition, in the event any successor servicer is appointed
pursuant to Section 8.02(iii) of this Agreement, such successor servicer must
satisfy the conditions relating to the transfer of servicing set forth in the
Trust Agreement.
42
The
Servicer shall deliver promptly to the successor servicer the funds in the
Custodial Account and Escrow Account (and any funds thereafter received by
it
with respect to the Revolving Credit Loans) and all Revolving Credit Loan
documents and related documents and statements held by it hereunder and the
Servicer shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more
fully
and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer.
Upon
a
successor’s acceptance of appointment as such, the Servicer shall notify the
Trustee, the Seller and Master Servicer of such appointment in accordance with
the procedures set forth in Section 9.03.
Section
9.02 Costs.
[____________]
shall pay the legal fees and expenses of its attorneys. Costs and expenses
incurred in connection with the transfer of the servicing responsibilities,
including fees for delivering Servicing Files, shall be paid by [____________].
Subject to Sections 2.02 and 3.01(a), the Depositor shall pay the costs
associated with the preparation, delivery and recording of Assignments of
Mortgages.
Section
9.03 Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if sent by facsimile or mailed by overnight
courier, addressed as follows (or such other address as may hereafter be
furnished to the other party by like notice):
43
(i) if
to the
Seller:
[____________]
[____________]
[____________]
Attention:
[_________]
Telephone
No.: [____________]
Facsimile:
[____________]
(ii) if
to the
Servicer:
[_______________]
[_______________]
[_______________]
Attention:
[___________]
Telephone
No.: [_______________]
Telecopier
No.: [_______________]
(iii) if
to the
Master Servicer:
[_______________]
[_______________]
[_______________]
Attention:
[___________]
Telephone
No.: [_______________]
Telecopier
No.: [_______________]
(iv) if
to the
Trustee:
[_______________]
[_______________]
[_______________]
Attention:
[___________]
Telephone
No.: [_______________]
Telecopier
No.: [_______________]
Any
such
demand, notice or communication hereunder shall be deemed to have been received
on the date delivered to or received at the premises of the addressee.
44
Section
9.04 Severability
Clause.
Any
part,
provision, representation or warranty of this Agreement which is prohibited
or
which is held to be void or unenforceable shall be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation or warranty of this
Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction as to any Revolving Credit Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of
any
part, provision, representation or warranty of this Agreement shall deprive
any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is as close as possible to the economic effect of this Agreement
without regard to such invalidity.
Section
9.05 No
Personal Solicitation.
From
and
after the Closing Date, the Servicer hereby agrees that it will not take any
action or permit or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors on the Servicer’s behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Revolving Credit Loan (on a targeted basis) for any purposes of prepayment,
refinancing or modification of the related Revolving Credit Loan, provided,
however, that this limitation shall not prohibit Servicer from soliciting such
Mortgagor for purposes of prepayment, refinance or modification of any loan
owned or serviced by Servicer other than a Revolving Credit Loan. It is
understood and agreed that, among other marketing activities, promotions
undertaken by Servicer which are directed of the general public at large or
which are directed generally to a segment of the then existing customers of
Servicer or any of its direct or indirect subsidiaries (including, without
limitation, the mailing of promotional materials to Servicer’s deposit customers
by inserting such materials into customer account statements, mass mailings
based on commercially acquired mailing lists and newspaper, radio and television
advertisements) shall not constitute solicitation under this section. In the
event the Servicer does refinance any Revolving Credit Loan as a result of
a
violation of the requirements set forth in this Section 9.05, Servicer hereby
agrees to pay to the Trust Fund an amount equal to the difference, if any,
between the amount that the Trust Fund would have received if it had sold the
Revolving Credit Loan to a third party, and the proceeds received by the Trust
Fund as a result of such refinancing.
Section
9.06 Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.
Section
9.07 Place
of Delivery and Governing Law.
This
Agreement shall be deemed in effect when a fully executed counterpart thereof
is
received by the Seller in the State of New York and shall be deemed to have
been
made in the State of New York. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
45
Section
9.08 Further
Agreements.
The
Seller and the Servicer each agree to execute and deliver to the other such
reasonable and appropriate additional documents, instruments or agreements
as
may be necessary or appropriate to effectuate the purposes of this
Agreement.
Section
9.09 Intention
of the Parties.
It
is the
intention of the parties that the Seller is conveying, and the Servicer is
receiving only a contract for servicing the Revolving Credit Loans. Accordingly,
the parties hereby acknowledge that the Trust Fund remains the sole and absolute
owner of the Revolving Credit Loans and all rights (other than the servicing
rights) related thereto.
Section
9.10 Successors
and Assigns; Assignment of Servicing Agreement.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Servicer, the Seller, the Trustee and the Master Servicer and their respective
successors and assigns. This Agreement shall not be assigned, pledged or
hypothecated by the Servicer to a third party except in accordance with Section
7.03.
Section
9.11 Assignment
by the Seller.
The
Seller shall have the right, upon notice to but without the consent of the
Servicer, to assign, in whole or in part, its interest under this Agreement
to
the Depositor, which in turn shall assign such rights to the Trustee, and the
Trustee then shall succeed to all rights (but not the obligations, except as
set
forth in the Trust Agreement) of the Seller under this Agreement (and in
performing hereunder, the Trustee shall have all of the rights, protections
and
immunities afforded to it under the Trust Agreement). All references to the
Seller in this Agreement shall be deemed to include its assignee or designee
and
any subsequent assignee or designee, specifically including the Trustee, except
with respect to the Seller’s retained servicing rights pursuant to Section
8.02(iii).
The
Seller shall have the right, upon notice to but without the consent of the
Servicer or the Trustee, to assign, in whole or in part, its retained servicing
rights. All references to the Seller in this Agreement, in its capacity as
an
owner of servicing rights, shall be deemed to include the assignee or designee
and any subsequent assignee or designee, of the Seller’s rights arising pursuant
to Section 8.02(iii).
Section
9.12 Waivers.
No
term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
Section
9.13 Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
46
Section
9.14 General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a)
the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
(b)
accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(c)
references
herein to “Articles,” “Sections,” “Subsections,” “Paragraphs” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(d)
a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e)
the
words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f)
the
term
“include” or “including” shall mean by reason of enumeration.
Section
9.15 Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(i)
consents, waivers and modifications which may hereafter be executed, (ii)
documents received by any party at the closing, and (iii) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
Section
9.16 Protection
of Confidential Information.
The
Servicer shall keep confidential and shall not divulge to any party, without
the
Seller’s prior written consent, any nonpublic information pertaining to the
Revolving
Credit Loans
or
any borrower thereunder, except to the extent that it is appropriate for the
Servicer to do so in working with legal counsel, auditors, taxing authorities
or
other governmental agencies or it is otherwise in accordance with Accepted
Servicing Practices.
47
Section
9.17 Amendment.
This
Agreement may be amended from time to time by the written agreement signed
by
the Master Servicer, the Seller and the Servicer; provided
that the
party requesting such amendment shall, at its own expense, provide the Trustee,
the Master Servicer and the Seller with an Opinion of Counsel that such
amendment will not materially adversely affect the interest of the
Certificateholders in the Revolving
Credit Loans.
Any such amendment shall be deemed not to adversely affect in any material
respect any the interest of the Certificateholders in the Revolving
Credit Loans,
if
the Trustee receives written confirmation from each Rating Agency that such
amendment will not cause such Rating Agency to reduce, qualify or withdraw
the
then current rating assigned to the Certificates (and any Opinion of Counsel
requested by the Trustee, the Master Servicer and the Seller in connection
with
any such amendment may rely expressly on such confirmation as the basis
therefore).
48
IN
WITNESS WHEREOF, the Servicer, the Seller and the Master Servicer have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the date first above written.
[_______ _____], | ||
as
Seller
|
||
|
|
|
By: | ||
Name:
Title:
|
||
[_______ _____], | ||
as
Servicer
|
||
|
|
|
By: | ||
Name:
Title:
|
||
[_______ _____], | ||
as
Master Servicer
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|
By: | ||
Name:
Title:
|
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Acknowledged
By:
[_________________],
as
Trustee and not individually
By:
Name:
Title:
EXHIBIT
A
REVOLVING
CREDIT LOAN
SCHEDULE
(including
Prepayment Penalty Schedule)
A-1
EXHIBIT
B
CUSTODIAL
ACCOUNT CERTIFICATION
[_______]
[__],
20[__]
[_______________]
hereby
certifies that it has established the account described below as a Custodial
Account pursuant to Section 3.03 of the Servicing Agreement dated [_______]
[__],
20[__], by and between [____________],
as
seller, [_______________],
in as
servicer and [_______________],
as master
servicer, and acknowledged by [_______________],
as
trustee.
Title
of
Account: [_______________],
in
trust for the Master Servicer for [_______________],
Home
Equity Loan Mortgage Pass-Through Certificates, Series 20[__]-[__],
and
various Mortgagors.
Account
Number: _______________
Address
of office or branch of the firm at which Account is maintained:
[_______ _____], | ||
|
||
|
|
|
By: | ||
Name:
Title:
|
||
B-1
EXHIBIT
C
ESCROW
ACCOUNT CERTIFICATION
[_______________]
hereby
certifies that it has established the account described below as a Custodial
Account pursuant to Section 3.05 of the Servicing Agreement dated [_______]
[__],
20[__], by and between [____________],
as
seller, [_______________],
in as
servicer and [_______________],
as master
servicer, and acknowledged by [_______________],
as
trustee.
Title
of
Account: [_______________],
in
trust for the Master Servicer for [______________] Certificates, Series
20[__]-[__],
and
various Mortgagors.
Account
Number: _______________
Address
of office or branch of the firm at which Account is maintained:
[_______ _____], | ||
|
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|
|
|
By: | ||
Name:
Title:
|
||
X-0
XXXXXXX
X-0
FORM
OF MONTHLY REMITTANCE ADVICE
D-1-1
EXHIBIT
D-2
STANDARD
LAYOUT FOR MONTHLY DEFAULTED LOAN REPORT
D-2-1
EXHIBIT
E
[Date]
Xxxxxxxxx
Mortgage Securities Corporation
000
Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx
Xx,
Xxx Xxxxxx 00000
Attention:
Xxxxxxx Xxxxx
[______________]
[______________]
[______________]
Attention:
[______________]
[______________]
[______________]
[______________]
Attention:
[______________]
Reference
is made to the Servicing Agreement dated as of [________] [__], 20[__] (the
“Agreement”), by and among [______________], as seller (the “Seller”),
[______________], as servicer (in such capacity, the “Servicer”), and
[______________], as master servicer (in such capacity, the “Master Servicer”),
and acknowledged by [______________], as trustee (the “Trustee”). I, [identify
the certifying individual], a [title] of the Servicer, hereby certify to the
Master Servicer, the Trustee and Xxxxxxxxx Mortgage Securities Corporation
(the
“Depositor”), and their respective officers, directors and affiliates, and with
the knowledge and intent that they will rely upon this certification,
that:
1. I
have
reviewed the information required to be delivered to the Master Servicer
pursuant to Section 5.03 of the Agreement (the “Servicing
Information”).
2. Based
on
my knowledge, the Servicing Information does not contain any untrue statement
of
a material fact information or omit to state a material fact necessary to make
the Servicing Information, in light of the circumstances under which such
statements were made, not misleading as of the date of this
certification;
3. Based
on
my knowledge, the Servicing Information has been provided to the Master Servicer
when and as required under the Agreement; and
E-1
4. I
am
responsible for reviewing the activities performed by the Servicer under the
Agreement, and based upon my knowledge and the review required under the
Agreement, and except as disclosed in writing to you on or prior to the date
of
this certification either in the accountants’ report required under the
Agreement or in disclosure a copy of which is attached hereto, the Servicer
has,
as of the date of this certification, fulfilled its obligations under this
Agreement.
[_______ _____], | ||
|
||
|
|
|
By: | ||
Name:
Title:
|
||
E-2
EXHIBIT
F
ASSIGNMENT
AND ASSUMPTION AGREEMENT
F-1