STANDARD TERMS
to
MASTER SERVICING AGREEMENT
OCTOBER 1, 1999 EDITION
NATIONAL MORTGAGE SECURITIES CORPORATION
TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions................................................................... 1
ARTICLE II
ASSIGNMENT OF MORTGAGE LOANS AND TRUST ESTATE;
DOCUMENTS TO BE DEPOSITED WITH THE TRUSTEE
Section 2.01. Trustee to Retain Possession of Documents..................................... 5
Section 2.02. Trustee to Retain Possession of Certain Insurance Policies and Documents...... 5
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. General Duties of Master Servicer............................................. 6
Section 3.02. Termination of Sales/Servicing Agreements..................................... 6
Section 3.03. Enforcement of "Due-on-Sale" Clauses; Assumption Agreements................... 7
Section 3.04. Release of Trustee Mortgage Loan Files........................................ 8
Section 3.05. Documents, Records and Funds in Possession of Master Servicer to be
Held for Trustee.............................................................. 9
Section 3.06. Modification of Requirements to Servicing Provisions of the
Sales/Servicing Agreement..................................................... 10
Section 3.07. Waiver by master Servicer of Certain Requirements in the
Sales/Servicing Agreement..................................................... 11
Section 3.08. Assignment of Sales/Servicing Agreements...................................... 11
Section 3.09. Representations and Warranties................................................ 11
Section 3.10. Closing Certificate and Opinion............................................... 12
ARTICLE IV
INSURANCE AND BONDS
Section 4.01. Maintenance of Insurance and Collections Thereunder........................... 13
Section 4.02. Payment of Premiums........................................................... 13
Section 4.03. Presentment of Claims and Collection of Proceeds.............................. 13
Section 4.04. Renewal of Primary Mortgage Insurance Policies................................ 14
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ARTICLE V
ADVANCES BY MASTER SERVICER FOR P & I
ADVANCES, ATTORNEYS' FEES AND OTHER COSTS
Section 5.01. Recoverable Advances.......................................... 14
Section 5.02. Non-Recoverable Advances...................................... 15
ARTICLE VI
PAYMENTS BY MASTER SERVICER
Section 6.01. General....................................................... 16
Section 6.02. Deposits Into Master Custodial P&I Account.................... 16
Section 6.03. Withdrawals From Master Custodial P&I Accounts................ 16
Section 6.04. Payments for Additional Interest In Connection with Certain
Prepayments and Other Liquidations............................ 17
Section 6.05. Payments for the Repurchase of Loans.......................... 18
Section 6.06. Payments for Losses due to Mortgagor Bankruptcies............. 19
ARTICLE VII
COMPENSATION AND DISBURSEMENTS TO MASTER SERVICER
Section 7.01. Compensation to the Master Servicer........................... 19
Section 7.02. Authorized Disbursements from the Collateral Proceeds Account. 19
ARTICLE VIII
REPORTS AND CERTIFICATE TO TRUSTEE
Section 8.01. Reports to the Issuer and Trustee............................. 20
Section 8.02. Annual Officer's Certificate as to Compliance................. 20
Section 8.03. Annual Independent Public Accountants' Servicing Report....... 21
ARTICLE IX
MERGER OR CONSOLIDATION OF MASTER SERVICER; RESIGNATION
Section 9.01. Merger or Consolidation....................................... 22
Section 9.02. Assignment or Transfer of Master Servicing Agreement.......... 22
Section 9.03. Resignation of Master Servicer................................ 22
ARTICLE X
DEFAULT
Section 10.01. Events of Default by Master Servicer.......................... 22
Section 10.02. Other Remedies of Trustee..................................... 24
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ARTICLE XI
DUTIES OF THE MASTER SERVICER
Section 11.01. General Bond Administration............................................ 24
Section 11.02. REMIC Bond Administration.............................................. 26
Section 11.03. Additional Bond Administration Rights and Duties of Master Servicer.... 26
Section 11.04. Additional Costs Payable by Master Servicer............................ 27
ARTICLE XII
MISCELLANEOUS
Section 12.01. No Assignment or Delegation of Duties by Master Servicer............... 27
Section 12.02. Binding Nature of Agreement; Assignment................................ 27
Section 12.03. Entire Agreement....................................................... 27
Section 12.04. Amendments and Supplements............................................. 27
Section 12.05. Controlling Law........................................................ 28
Section 12.06. Indulgences, No Waivers................................................ 28
Section 12.07. Titles Not to Affect Interpretation.................................... 28
Section 12.08. Attorney's Fees........................................................ 28
EXHIBITS
Exhibit A Form of Performance Letter................................................... A-1
Exhibit B Monthly Bond Remittance Report............................................... B-1
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RECITALS
A master servicer identified in the Master Servicing Agreement of which
these Standard Terms are a part (the "Master Servicer") intends to act as
"master servicer" on behalf of National Mortgage Securities Corporation ("NMSC")
for one or more Series of collateralized structured securities (the
"Securities") pursuant to an indenture between NMSC or an owner trust created by
it (the "Issuer") and the trustee identified in such indenture (the "Trustee").
The Securities are to be secured by mortgage loans that have been sold or
pledged to the Issuer by NMSC (the "Mortgage Loans"). Collection of the
scheduled principal and interest payments on the Mortgage Loans, plus pass-
through payments of prepayments and liquidation proceeds, will be paid to the
Trustee on behalf of the Issuer for the payment of the principal and interest on
the Securities.
NMSC has entered into Sales/Servicing Agreements with various Servicers
acceptable to the Master Servicer and has assigned its interest in the
Sales/Servicing Agreements either to the Issuer or to one of its subsidiaries,
which, in turn, has assigned its interest to the Issuer. Under the terms of its
Sales/Servicing Agreement, each Servicer has agreed to service the mortgage
loans sold by it to NMSC. To provide for the administration and servicing of
the Mortgage Loans that secure payment of the Securities, including the orderly
and timely collection of scheduled payments of principal and interest and the
advance of such payments by the Master Servicer to the extent recoverable from
Liquidation Proceeds, Insurance Proceeds, or subsequent payments by the
Borrower, the Issuer and NMSC, on behalf of itself or one of its subsidiaries,
have retained the Master Servicer to act as a "master servicer" for all Mortgage
Loans and to manage and supervise the administration and servicing of the
Mortgage Loans by all Servicers for the benefit of the Issuer, NMSC, the Trustee
and the Securityholders.
STANDARD TERMS
NOW THEREFORE, in consideration of the mutual covenants and obligations
contained below and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Issuer, NMSC and Master Servicer
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
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The following terms shall have the meanings ascribed to them below, unless
the context or use otherwise clearly indicates another or different meaning and
intent. Moreover, such meanings are equally applicable to the singular and the
plural forms of such terms, as the context may require. Capitalized terms not
otherwise defined in these Standard Terms shall have the meanings ascribed to
them in the Sales/Servicing Agreement. (Copies of the Sales/Servicing
Agreement are held by the Master Servicer and the Issuer at their respective
places of business located at the addresses specified in the Master Servicing
Agreement.)
"Advance Claims Endorsement": An endorsement to the Pool Insurance Policy
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which obligates the Mortgage Insurer that issued such Pool Insurance Policy to
advance delinquent principal and interest installments on any Mortgage Loan.
"Collateral Proceeds Account": A trust account established by the Trustee
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with a bank, savings and loan association or other depository to which the
Master Servicer shall remit from time to time the funds the Master Servicer has
collected and deposited in a Master Custodial P&I Account in respect of the
Mortgage Loans pledged to the Trustee as collateral for Securities.
"Event of Default": As provided in Section 10.01 of these Standard Terms.
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"FNMA Guidelines": The guidelines contained in the FNMA Seller's Guide and
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in the FNMA Servicing Guide pertaining to one-to-four family, first-lien,
conventional residential mortgage loans, and such other rules, regulations and
guidelines adopted by FNMA that establish eligibility requirements for the
purchase of conventional, residential mortgage loans by FNMA or establish loan
service requirements for mortgage loans purchased by FNMA, as amended or
supplemented from time to time.
"Indenture": A trust indenture between the Trustee and the Issuer under
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which Securities are issued, as amended or supplemented from time to time.
"Issuer": An affiliate of NMSC which has issued Securities secured by
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Mortgage Loans.
"Master Custodial P & I Account": An account maintained by the Master
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Servicer specifically for the collection from any Servicer of the payment of
principal and interest on mortgage loans purchased by NMSC.
"Master Servicer Remittance Date": The date specified in the Master
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Servicing Agreement, which is the day each month on which the Master Servicer
will remit funds to the Trustee.
"Master Servicer": The Person designated and appointed by the Trustee to
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act as "master servicer" pursuant to Sections 9.03 and 10.01 of these Standard
Terms.
"Master Servicer Errors and Omissions Insurance Policy": Insurance
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coverage in an amount and otherwise in form and substance acceptable under FNMA
guidelines, insuring the Master Servicer as the named insured against liability
for damages arising out of errors, omissions or mistakes committed in the
performance of the services and other obligations required of the Master
Servicer under its Master Servicing Agreement with the Issuer and, unless waived
by the Master Servicer, naming the Trustee as an additional insured, containing
a severability of interests provision, but no other exclusion or other provision
that would limit the liability of any insured to any other insured.
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"Master Servicer Fidelity Bond": A fidelity bond issued by an insurer and
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in form and substance acceptable under FNMA Guidelines, under which such insurer
(a) agrees to indemnify the Master Servicer for all losses sustained as a result
of any theft, embezzlement, fraud or other dishonest act on the part of the
Master Servicer's directors, officers or employees, and (b) provides for limits
of liability under such bond for each director, officer or employee of not less
than an amount required by such guidelines.
"Master Servicing Agreement": Each agreement between the Issuer and the
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Master Servicer under which the Master Servicer agrees to supervise the
Servicers of the Mortgage Loans and to assume certain other obligations in
accordance with such agreement and the terms and conditions of these Standard
Terms, as supplemented and amended from time to time.
"Monthly Remittance Report": The monthly report to be provided by the
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Master Servicer to the Trustee pursuant to Section 8.01 of these Standard Terms,
providing such information as is set forth in Exhibit C.
"Monthly P & I Advance": An advance of funds by the Master Servicer
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pursuant to the Master Servicing Agreement or by any other institution pursuant
to an Advance Claims Endorsement to pay delinquent principal and interest
installments (net of related servicing fees) on any Mortgage Loan.
"Mortgage Loans": The loans evidenced by the Notes and Security
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Instruments referred to in the Mortgage Loan Schedule attached to the Indenture
Supplement, respectively, which the Issuer has pledged to the Trustee as
collateral for the Securities pursuant to the Indenture.
"Mortgagor Bankruptcy Bond": A surety bond, insurance policy, letter of
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credit or other credit instrument, in form and substance satisfactory to the
Issuer and the Trustee, issued by an insurance company, surety company, or by a
bank, trust company, savings and loan association or other financial institution
acceptable to the Trustee providing coverage against loss resulting from any
order, decree or other action by a court in connection with a bankruptcy
proceeding that reduces the amount of indebtedness secured by any Security
Instrument or the interest rate of any Note.
"NMSC": National Mortgage Securities Corporation, a Virginia corporation.
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"Non-Recoverable Advance": As provided in Section 5.01(f) to these
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Standard Terms.
"Officer's Certificate": A certificate signed by a Servicing Officer.
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"Opinion of Counsel": A written opinion of counsel to the Master Servicer,
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which opinion is as to form and substance, and is issued by counsel, reasonably
acceptable to the Trustee.
"Performance Letter": A letter of credit issued by an entity satisfactory
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to the Rating Agency in such amount and substance that is satisfactory to the
Rating Agency and in substantially the form attached hereto as Exhibit A, duly
executed by it and delivered to the
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Trustee (i) contemporaneously with the execution and delivery of the Master
Servicing Agreement, (ii) in substitution for a cash deposit or insurance policy
pursuant to Section 6.05 hereof or (iii) in substitution for a Performance
Letter delivered to the Trustee contemporaneously with the execution and
delivery of the Master Servicing Agreement.
"Purchase Price": With respect to a Mortgage Loan purchased from the Trust
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Estate, an amount equal to the unpaid Principal Balance of the Mortgage Loan
plus thirty days interest thereon at the Note Rate.
"Rating Agency": The rating agency or rating agencies that rate the
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Securities at the request of the Issuer at the time of issuance of the
Securities.
"REMIC Election": An election to treat the collateral pledged to secure
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the Securities as a real estate mortgage investment conduit (a "REMIC") pursuant
to Section 860D of the Code.
"REMIC Pool": The collateral pledged to secure the Securities as to which
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a REMIC Election is made.
"Sales/Servicing Agreement": Each of the several Sales/Servicing
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Agreements between a Servicer and NMSC under which the Servicer has agreed to
service certain Mortgage Loans, and in case any of such Sales/Servicing
Agreements is hereafter terminated, any substitute Sales/Servicing Agreement
between NMSC and a substitute servicer, together with all amendments or
supplements to the foregoing as may be entered into from time to time.
"Securities": Obligations of the Issuer secured by Mortgage Loans and
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issued pursuant to the terms of an Indenture.
"Securityholder": A Person whose name appears as the holder of Securities
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on the register maintained by or for an Issuer.
"Series Year": The twelve month period following the date of the Master
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Servicing Agreement and each anniversary thereof.
"Servicer": The mortgage loan servicing company that has entered into a
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Sales/Servicing Agreement with NMSC and is servicing Mortgage Loans, its
successors and permitted assigns, and any other Person that shall enter into a
substitute Sales/Servicing Agreement with the consent of the Master Servicer.
"Servicing Officer": Any officer of the Master Servicer who is responsible
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for the administration and supervision of servicing of the Mortgage Loans.
"Special Hazard Insurance Policy": A casualty insurance policy, in form
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and substance satisfactory to the Issuer and the Trustee, insuring the Trustee
against loss sustained by damage or destruction to Mortgaged Premises, which
loss is not insured by a Hazard Insurance Policy or Flood Insurance Policy (if
any).
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"Standard Terms to Master Servicing Agreement" or "Standard Terms": These
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Standard Terms and all exhibits, schedules and appendices hereto, as amended and
supplemented from time to time.
"Trust Estate": The corpus of the trust created by the Indenture
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consisting of (i) the Mortgage Loans, excluding all payments of principal and
interest due before the Cut-Off Date; (ii) such funds as from time to time are
held in the Collateral Proceeds Account; (iii) such funds as from time to time
are held in the Master Custodial P & I Account and the Custodial P & I Accounts;
(iv) the Mortgaged Premises that secure a Mortgage Loan which have been acquired
by foreclosure (of any type) or by deed-in-lieu of foreclosure; (v) any
Insurance Proceeds or Liquidation Proceeds to which the holder of any Mortgage
Loan or the Trustee is entitled; (vi) all right, title and interest of the
Issuer under the Master Servicing Agreement; (vii) all rights of NMSC pursuant
to the respective Sales/Servicing Agreements relative to the Servicers'
obligations with respect to the Mortgage Loans; and (viii) any other tangible or
intangible property, rights or benefits that were granted, assigned or conveyed
to the Trustee under the Indenture as collateral for the Securities.
"Trust Receipt": As provided in Section 3.04(b) of these Standard Terms.
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"Trustee": The trustee acting as "trustee" for the Bondholders under the
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Indenture.
"Trustee Mortgage Loan File": As provided in Section 2.01 of these
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Standard Terms.
ARTICLE II
ASSIGNMENT OF MORTGAGE LOANS AND TRUST ESTATE;
DOCUMENTS TO BE DEPOSITED WITH THE TRUSTEE
Section 2.01. Trustee to Retain Possession of Documents.
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Concurrently with the execution and delivery of the Master Servicing
Agreement, the Issuer shall have pledged, transferred and assigned to the
Trustee, as collateral for the payment of principal and interest on the
Securities, all right, title and interest of the Issuer in and to the Trust
Estate. Prior to or contemporaneously with the execution of such Master
Servicing Agreement, the Issuer shall have delivered or caused to be delivered
to the Trustee or its agent with respect to each Mortgage Loan certain documents
and instruments as specified in Section 362 of the Sales/Servicing Agreement,
which shall be referred to in these Standard Terms as the "Trustee Mortgage Loan
File." The Trustee or its agent shall retain possession of these documents and
shall release them only under the circumstances specified herein.
Section 2.02. Trustee to Retain Possession of Certain Insurance Policies
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and Documents.
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The Trustee or its agent shall also retain possession and custody of the
originals of any Special Hazard Insurance Policy, any Pool Insurance Policy, any
Mortgagor Bankruptcy Bond, any Performance Letter, and any certificates of
renewal as to the foregoing as may be issued from time to time as contemplated
by these Standard Terms. Until the Bonds have been paid in
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full and the Issuer otherwise has fulfilled its obligations under the Indenture,
the Trustee or its agent shall also retain possession and custody of each
Trustee Mortgage Loan File in accordance with and subject to the terms and
conditions of the Indenture. The Master Servicer shall promptly deliver to the
Trustee or its agent upon the execution or receipt thereof, the originals of any
Special Hazard Insurance Policy, any Pool Insurance Policy, any Mortgagor
Bankruptcy Bond, any Performance Letter, and any certificates of renewal
thereof, and such other documents or instruments that constitute portions of the
Trustee Mortgage Loan File that come into the possession of the Master Servicer
from time to time.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. General Duties of Master Servicer.
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For and on behalf of the Trustee, NMSC, and the Securityholders, the Master
Servicer shall supervise, administer, monitor and oversee the servicing of the
Mortgage Loans by the Servicers and the observance and performance by the
Servicers of all services, duties, responsibilities and obligations that are to
be observed or performed by them under their respective Sales/Servicing
Agreements. Upon the request of a Servicer, the Master Servicer will not
unreasonably withhold its consent to the transfer of the servicing obligations
from such Servicer to another Servicer, provided, however, that the new Servicer
executes a new Sales/Servicing Agreement whose servicing provisions are
identical to the previous Sales/Servicing Agreement, and the new Servicer has
been approved by the Master Servicer. Moreover, the Master Servicer agrees to
maintain the Master Servicer Errors and Omissions Policy and the Master Servicer
Fidelity Bond in full force and effect throughout the term of the Master
Servicing Agreement.
During the term of the Master Servicing Agreement the Master Servicer shall
consult fully with each of the Servicers as may be necessary from time to time
to perform and carry out the Master Servicer's obligations hereunder and
receive, review and evaluate all reports, information and other data that are
provided to the Master Servicer by each Servicer and otherwise exercise
reasonable efforts to cause each Servicer to perform and observe the covenants,
obligations and conditions to be performed or observed by it under its
Sales/Servicing Agreement. If any Servicer materially breaches or fails to
perform or observe any material obligations or conditions of its Sales/Servicing
Agreement, the Master Servicer shall promptly deliver to the Trustee, NMSC and
the Issuer an Officer's Certificate certifying that such Servicer is in default
and describing the events and circumstances giving rise to the default and what
action (if any) has been, or is to be, taken by the Servicer to cure the default
and setting forth what action (if any) that the Master Servicer plans to take.
Section 3.02. Termination of Sales/Servicing Agreements.
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If the Master Servicer or the Trustee terminates any Sales/Servicing
Agreement with a Servicer, the Master Servicer, at its election, shall enter
into a substitute servicing agreement
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with NMSC, or arrange for another mortgage loan service company acceptable to it
to do so, under which such mortgage loan service company or the Master Servicer,
as the case may be, shall assume, satisfy, perform and carry out all
liabilities, duties, responsibilities and obligations that are to be, or
otherwise were to have been, satisfied, performed and carried out by the
Servicer under such terminated Sales/Servicing Agreement, regardless whether
such liabilities, duties, responsibilities or obligations shall have accrued
before or after the termination of such Sales/Servicing Agreement, including but
not limited to, the Servicer's obligations to purchase certain Mortgage Loans
and any other liabilities or obligations of the Servicer arising from any breach
by the Servicer of any representations and warranties contained in its
Sales/Servicing Agreement causing a material impairment in the value of such
Mortgage Loans. If the Master Servicer does not elect to enter into a substitute
Sales/Servicing Agreement with NMSC, the Master Servicer shall nevertheless
assume, satisfy, perform and carry out all obligations which otherwise were to
have been satisfied, performed and carried out by the Servicer under such
terminated Sales/Servicing Agreement until a substitute mortgage loan service
company has been appointed and designated and a substitute Sales/Servicing
Agreement has been entered into by NMSC and such substitute Servicer.
Section 3.03. Enforcement of "Due-on-Sale" Clauses; Assumption Agreements.
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(a) Enforcement. Each Sales/Servicing Agreement requires the Servicer to
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enforce any "due-on-sale clause" contained in any Note or Security Instrument to
the extent that such enforcement is permissible by law and governmental
regulation and will not adversely affect or jeopardize coverage under any
Primary Mortgage Insurance Policy or any Pool Insurance Policy; provided,
however, that if the Servicer reasonably expects that the enforceability or
legality of the "due-on-sale clause" will be litigated, the Servicer shall
promptly notify the Master Servicer and each Mortgage Insurer and obtain their
written approval before initiating any enforcement proceedings. The Master
Servicer shall grant such approval if, in its and its counsel's reasonable
judgment, such enforcement is permissible by law and governmental regulation,
will not adversely affect or jeopardize coverage under any Primary Mortgage
Insurance Policy or any Pool Insurance Policy and will not result in advances by
or other expenses to the Servicer or the Master Servicer that are not
recoverable from Liquidation Proceeds or Insurance Proceeds relating to the
Mortgage Loan.
(b) Assumptions. Subject to the limitation specified in Subsection 3.03(a)
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above and to such other limitations or conditions in the related Sales/Servicing
Agreement, whenever a Mortgaged Premises is to be conveyed to a Person by a
Borrower and the Person is to enter into an assumption agreement or modification
agreement or supplement to the Note or the Security Instrument that requires the
signature of the Trustee, or if an instrument of release signed by the Trustee
is required to release the Borrower from liability on the Mortgage Loan, the
Master Servicer shall obtain from the Servicer the assumption agreement with the
Person to whom the Mortgage Premises is to be conveyed and such modification
agreement or supplement to the Note or the Security Instrument or other
instruments as are reasonable or necessary to carry out the terms of the Note or
the Security Instrument or otherwise to comply with any applicable laws
regarding assumptions and/or the transfer of the Mortgaged Premises to such
Person, and deliver them to the Trustee for signature with a letter explaining
the nature of such documents and the
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reason or reasons why the Trustee's signature is required. With such letter, the
Master Servicer shall also deliver to the Trustee an Officer's Certificate from
the applicable Servicer as provided in Section 741 of the Sales/Servicing
Agreement. Upon the closing of the transactions contemplated by such documents,
the Master Servicer shall cause the fully executed and duly recorded (where
appropriate) originals of the assumption agreement, the release (if any) or the
modification or supplement to the Note or the Security Instrument to be
delivered to the Trustee or its agent and deposited in the Trustee Mortgage Loan
File.
Section 3.04. Release of Trustee Mortgage Loan Files.
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(a) Payments-in-Full. The Sales/Servicing Agreement requires that upon the
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payment-in-full of any Mortgage Loan, the Servicer shall deposit the proceeds
thereof in the appropriate Custodial P & I Account maintained by the Servicer,
and prepare and deliver to the Master Servicer with respect to the Security
Instrument which secures the Note, a request for reconveyance, deed or
conveyance or release or satisfaction of the Security Instrument or other
appropriate instrument releasing the Mortgaged Premises from the lien
represented by the Security Instrument. Upon receipt of the certificate (RMIC
Form 340) as required by the Sales/Servicing Agreement, the Master Servicer
shall deliver such certificate to the Trustee, together with a certificate of a
Servicing Officer setting forth the Master Servicer's recommendations as to what
action should be taken by the Trustee in respect of such documents. In the
event the Trustee Mortgage Loan File with respect to such Mortgage Loan is
released, the Trustee or its agent shall send such Trustee Mortgage Loan File to
the Servicer for recordation of the mortgage release or satisfaction in the
proper recording office.
(b) Release of Trustee Mortgage Loan File for Other Purposes. From time to
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time as is appropriate for the servicing or foreclosure of a Mortgage Loan or
the acquisition of Mortgaged Premises in lieu of foreclosure or for the making
of any claim against or collection under any Mortgage Insurance Policy, Flood
Insurance Policy, Hazard Insurance Policy, Mortgagor Bankruptcy Bond, the
Special Hazard Insurance Policy, the Servicer Fidelity Bond, the Servicer Errors
and Omissions Policy, or for purposes of effecting a partial release of any
Mortgaged Premises from the lien of the Security Instrument or for making any
corrections to the Note or the Security Instrument or other documents
constituting the Trustee Mortgage Loan File, the Master Servicer shall deliver
to the Trustee, with a copy to the Issuer, (i) an officer's certificate of the
Servicer (RMIC Form 340) as required under Section 731 or Section 742 of the
Sales/Servicing Agreement, and shall certify as to the reason for such release
and that such release will not invalidate the insurance coverage provided in
respect to the Mortgage Loan under any of the foregoing insurance policies, and
(ii) an executed Trust Receipt (RMIC Form 347), executed by an officer of the
Lender or by a Servicing Officer, designating whether the Trustee Mortgage File,
or the part thereof requested, shall be released to the Master Servicer or the
Servicer. Upon receipt of the foregoing, the Issuer will cause the Trustee or
its agent to deliver to the Master Servicer, or the Servicer if the Master
Servicer so requests, the Trustee Mortgage Loan File or documents so requested.
Subject to the further limitations in this Section 3.04(b) below, the Master
Servicer shall cause the Trustee Mortgage Loan File or documents so released to
be returned to the Trustee or its agent when the need therefor by the Master
Servicer or Servicer no longer exists, unless the Mortgage Loan is liquidated
and the proceeds thereof are
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deposited in a Custodial P & I Account, in which case the Issuer shall cause the
Trustee to deliver the Trust Receipt to the Master Servicer. If a Servicer at
any time seeks to initiate a foreclosure proceeding in respect of any Mortgaged
Premises as authorized by its Sales/Servicing Agreement, the Master Servicer
shall deliver or cause to be delivered to the Trustee, for signature, as
appropriate, any court pleadings, request for trustee's sale or other documents
necessary to such foreclosure or to any legal action brought to obtain judgment
against the Borrower on the Note or the Security Instrument or to obtain a
deficiency judgment or to enforce any other remedies or rights provided by the
Note or the Security Instrument or otherwise available at law or in equity.
Together with such documents or pleadings, the Master Servicer shall deliver to
the Trustee an officer's certificate of the Servicer as required under Section
731 or Section 742 of the Sales/Servicing Agreement requesting that such
pleadings or documents be executed by the Trustee and a Servicing Officer shall
certify as to the reason such documents or pleadings are required and that the
execution and delivery thereof by the Trustee will not invalidate the insurance
coverage under the Special Hazard Insurance Policy, Flood Insurance Policy (if
any), or Mortgagor Bankruptcy Bond or invalidate or otherwise affect the lien of
the Security Instrument except for the termination of such lien upon completion
of the foreclosure. Notwithstanding the foregoing, the Master Servicer shall
cause possession of any Trustee Mortgage Loan File or documents therein which
have been released by the Trustee to be retained at all times by the Master
Servicer or the Servicer, if appropriate, unless (i) the Mortgage Loan has been
liquidated and the Insurance Proceeds or Liquidation Proceeds relating to the
Mortgage Loan have been deposited in a Custodial P & I Account or (ii) the
Trustee Mortgage Loan File or documents have been delivered to an attorney or to
a public trustee or other public official as required by law for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgage Premises and the Master Servicer has delivered to the Trustee a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which the Trustee Mortgage Loan File or documents were delivered and
the purpose or purposes of such delivery.
Section 3.05. Documents, Records and Funds in Possession of Master
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Servicer to be Held for Trustee.
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Notwithstanding other provisions of the Master Servicing Agreement, the
Master Servicer shall transmit to the Trustee as required by the Master
Servicing Agreement and the Sales/Servicing Agreement all documents and
instruments coming into the possession of the Master Servicer from time to time
and shall account fully to the Trustee and NMSC for all funds received by the
Master Servicer in the Master Custodial P & I Account or which otherwise are
collected by the Master Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan. All Trustee Mortgage Loan Files, Lender
Mortgage Loan Files and funds collected or held by, or under the control of, the
Master Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds or Insurance
Proceeds, including but not limited to, any funds on deposit in the Master
Custodial P & I Account and in any Custodial P & I Account, shall be held by the
Master Servicer for and on behalf of the Trustee, NMSC and the Securityholders
and shall be and remain the sole and exclusive property of the Trustee. The
Master Servicer also agrees that it shall not create, incur or subject any
Lender Mortgage Loan File, Trustee Mortgage Loan File or funds
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that are deposited in any Custodial P & I Account or Custodial T & I Reserve
Account, in the Master Custodial P & I Account and or any funds that otherwise
are or may become due or payable to the Trustee, to any claim, lien, security
interest, judgment, levy, writ of attachment or other encumbrance, nor assert by
legal action or otherwise any claim or right of set-off against any Lender
Mortgage Loan File or Trustee Mortgage Loan File or any funds collected on, or
in connection with, a Mortgage Loan except, however, that the Master Servicer
shall be entitled to set-off against and deduct from any such funds any amounts
that are properly due and payable to the Master Servicer under this Agreement.
The Master Servicer hereby acknowledges that concurrently with the execution of
the Master Servicing Agreement, the Trustee shall have acquired and shall hold a
security interest in the Lender Mortgage Loan Files and Trustee Mortgage Loan
Files (and in all Mortgage Loans represented by such Lender Mortgage Loan Files
and Trustee Mortgage Loan Files) and in all funds now or hereafter held by, or
under the control of, a Servicer or the Master Servicer that are collected by
any Servicer or the Master Servicer in connection with the Mortgage Loans,
whether as scheduled installments or principal or interest or as full or partial
prepayments of principal or interest or as Liquidation Proceeds or Insurance
Proceeds, and in all proceeds of the foregoing and proceeds of proceeds (but
excluding any Servicing Fees or other amounts to which the Servicer is entitled
under its Sales/Servicing Agreement or the Master Servicer is entitled to under
the Master Servicing Agreement); and the Master Servicer agrees that so long as
the Mortgage Loans are assigned to and held by the Trustee, all Lender Mortgage
Loan Files and Trustee Mortgage Loan Files (and any documents or instruments
constituting a part of such files) and such funds which come into the possession
or custody of, or which are subject to the control of, the Master Servicer shall
be held by the Master Servicer for and on behalf of the Trustee as the Trustee's
agent and bailee for purposes of perfecting the Trustee's security interest
therein as provided by the applicable uniform commercial code or other laws.
Section 3.06. Modification of Requirements to Servicing Provisions of the
-----------------------------------------------------------
Sales/Servicing Agreement.
-------------------------
Subject to the prior written approval of the Issuer, NMSC and the Trustee,
the Master Servicer from time to time may issue to any Servicer, to the extent
permitted by such Servicer's Sales/Servicing Agreement, such modifications and
amendments to the Sales/Servicing Agreement that the Master Servicer deems
necessary or appropriate to confirm or carry out more fully the intent and
purpose of the Sales/Servicing Agreement and the duties, responsibilities and
obligations to be performed by the Servicer thereunder. Such consents by the
Issuer, NMSC and the Trustee will not be unreasonably withheld. Prior to the
issuance of any modification or amendment, the Master Servicer shall deliver to
the Trustee, with a copy to the Issuer and NMSC, an Officer's Certificate
setting forth (i) the provision that is to be modified or amended, (ii) the
modification or amendment that the Master Servicer desires to issue and (iii)
the reason or reasons for such proposed amendment or modification.
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Section 3.07. Waiver by master Servicer of Certain Requirements in the
--------------------------------------------------------
Sales/Servicing Agreement.
-------------------------
In addition to any other powers granted the Master Servicer, the Master
Servicer is specifically hereby authorized, in its sole discretion, to waive
compliance by any Servicer with:
(a) the requirement in the Sales/Servicing Agreement that the Fidelity Bond
and Errors and Omissions Policy name NMSC and the Master Servicer as additional
obligees or insureds;
(b) the requirement in the Sales/Servicing Agreement that the Errors and
Omissions Policy contain a severability of interests provisions; and
(c) the requirement in the Sales/Servicing Agreement that property taxes
and insurance premiums be collected on any Mortgage Loan with a Loan-to-Value in
excess of 80% and deposited in a Custodial T & I Account either (i) on a loan by
loan basis for a Servicer whose Errors and Omissions Policy is in an amount
equal to at least $1 million or (ii) on an over-all Servicer basis for a
Servicer whose Errors and Omissions Policy is in an amount equal to at least $5
million.
Section 3.08. Assignment of Sales/Servicing Agreements.
----------------------------------------
Pursuant to Section 140 of the Sales/Servicing Agreement, without the
consent of the Master Servicer, a Servicer may not transfer or assign all or
substantially all of its rights, benefits or privileges under any
Sales/Servicing Agreement to any other Person nor delegate to or subcontract
with, nor authorize or appoint, any other Person to perform all or substantially
all of the Servicer's duties, covenants or obligations to be performed by the
Servicer under the Sales/Servicing Agreement. The Master Servicer agrees that
on written application from a Servicer, it will consider promptly such a request
to transfer and/or delegate and will not unreasonably withhold its consent to
such transfer and/or delegation.
Section 3.09. Representations and Warranties.
------------------------------
The Master Servicer hereby represents and warrants to the Issuer, the
Trustee, NMSC, and the underwriters for the Securities, and at all times during
the terms of each Master Servicing Agreement shall be deemed to represent and
warrant, that:
(a) The Master Servicer has been duly incorporated and is validly existing
in good standing under the laws of the jurisdiction of its incorporation and is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction in which the performance of its duties under
the Master Servicing Agreement would require such qualification; the Master
Servicer holds all material licenses, certificates and permits from all
governmental authorities necessary for the conduct of its business and has
received no notice of proceedings relating to the revocation of any such
license, certificate or permit, which singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would materially affect the
conduct of the business, results of operations, net worth or condition
(financial or
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otherwise) of the Master Servicer; and the Master Servicer will have the
corporate power and authority to conduct its business as required or
contemplated by the Master Servicing Agreement and to perform the covenants and
obligations to be performed by it hereunder.
(b) The execution and delivery by the Master Servicer of the Master
Servicing Agreement is within the corporate power of the Master Servicer and has
been duly authorized by all necessary corporate action on the part of the Master
Servicer; and neither the execution and delivery of the Master Servicing
Agreement by the Master Servicer, nor the consummation by the Master Servicer of
the transactions herein contemplated, nor compliance with the provisions hereof
by the Master Servicer, will (1) conflict with or result in a breach of, or will
constitute a default under, any of the provisions of the certificate of
incorporation or by-laws of the Master Servicer or any law, governmental rule or
regulation, or any judgment, decree or order binding on the Master Servicer or
its properties, or any of the provisions of any indenture, mortgage, deed of
trust, contract or other instrument to which the Master Servicer is a party or
by which it is bound or (2) result in the creation or imposition of any lien,
charge or encumbrance upon any of its properties pursuant to the terms of any
such indenture, mortgage, deed of trust, contract or other instrument.
(c) The Master Servicing Agreement has been duly executed and delivered
by the Master Servicer and constitutes a legal, valid and binding agreement of
the Master Servicer enforceable against the Master Servicer in accordance with
its terms, subject to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and to general principles of equity.
Section 3.10. Closing Certificate and Opinion.
-------------------------------
On or before the date of closing of a series of Securities, the Master
Servicer will deliver to the Issuer an Officer's Certificate, dated the date of
the closing of such series of Securities, confirming that the representations
and warranties contained in Section 3.09 are true and correct as of such date,
and that the underwriters of such series of Securities shall be entitled to rely
thereon. The Master Servicer shall cause to be delivered to the underwriters of
such series of Securities an opinion of counsel, dated the date of closing on
such series of Securities, in form and substance satisfactory to such
underwriters, as to the due authorization, execution and delivery of the Master
Servicing Agreement by the Master Servicer and the enforceability thereof. The
Master Servicer shall also deliver a Certificate dated the date of closing on
such series of Securities, signed by two officers, as required under the
Indenture, to the effect that:
(a) No Event of Default by the Master Servicer has occurred hereunder;
(b) To the extent required by any Rating Agency rating the Securities, a
guarantee of the performance of certain obligations of the Master Servicer
hereunder has been provided; and
(c) The Master Servicer maintains such errors and omissions insurance and
fidelity bond coverage as is required hereunder.
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ARTICLE IV
INSURANCE AND BONDS
Section 4.01. Maintenance of Insurance and Collections Thereunder.
---------------------------------------------------
The Master Servicer shall maintain and keep in full force and effect during
the term of the Master Servicing Agreement each Pool Insurance Policy (and any
endorsement thereto), the Mortgagor Bankruptcy Bond and the Special Hazard
Insurance Policy and shall provide from time to time to the surety or insurer
under each such policy or bond all reports and other information required
thereby; provided, however, that the Trustee must pay when due the premium or
premiums due each surety or insurance company issuing such policies and bonds.
In the event (i) that any insurance company or surety company for any of the
foregoing policies or bonds shall be unable to fulfill its obligations under
such bond or policy, or (ii) any Rating Agency shall lower or propose to lower
the rating on the Securities due to the financial condition of such insurance
company or surety company, the Master Servicer upon approval of the Trustee
shall terminate such policy or bond and secure replacement policies in form and
substance satisfactory to the Trustee with coverage comparable to that which has
been terminated. A replacement policy or bond shall also be obtained for any
such policy or bond that is cancelled or terminated for any reason.
Notwithstanding the foregoing, if the cost of any such replacement policy or
bond shall be greater than the cost of the policy or bond that has been
terminated, then the Master Servicer shall notify NMSC of such increase in cost
and, if NMSC does not agree to pay such additional amounts, the amount of
coverage shall be reduced to a level such that the premium therefor shall not
exceed the cost of premium for the policy or bond that has been terminated,
provided that the Rating Agency has consented to such reduction in coverage. If
NMSC does agree to pay an amount in excess of the cost of the original policy or
bond, the Master Servicer shall structure the replacement policy or bond so that
failure by NMSC to pay such additional amount will not affect the amount of
coverage obtainable for the cost of the original policy or bond.
Section 4.02. Payment of Premiums.
-------------------
No later than 15 Business Days prior to the date thereof, the Master
Servicer shall deliver to the Trustee a statement of the premium due on the
Mortgagor Bankruptcy Bond (if any), each Pool Insurance Policy (if any), and the
Special Hazard Policy (if any), together with an Officer's Certificate
certifying that the amount reflected on the statement is correct and is properly
due and payable and instructing the Trustee to pay such amounts to the
appropriate insurer or surety. The Master Servicer shall obtain and provide to
the Trustee from each such insurer or surety a renewal policy or a certificate
evidencing that such policy or bond has been renewed and will remain in force
for the renewal period stated thereon.
Section 4.03. Presentment of Claims and Collection of Proceeds.
------------------------------------------------
The Master Servicer shall prepare and present on behalf of the Trustee and
the Securityholders all claims under any Mortgagor Bankruptcy Bond, each
Servicer Fidelity Bond,
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each Servicer Errors and Omissions Policy, and the Special Hazard Insurance
Policy, and take such actions (including the negotiation, settlement, compromise
or enforcement of the insured's claim) as shall be necessary to realize recovery
under such bonds and policies. Any proceeds disbursed to the Master Servicer in
respect of such policies or bonds shall be promptly deposited in the Master
Custodial P & I Account upon receipt, except for any amounts realized under the
Special Hazard Insurance Policy that are to be applied to the repair or
restoration of the related property as a condition requisite to the presentation
of claims on the related Mortgage Loan to the insurer under any applicable
Mortgage Insurance Policy. The Master Servicer shall also assure that each
Servicer prepares and presents on behalf of the Trustee and the Securityholders
all claims under each applicable Mortgage Insurance Policy, and that each
Servicer takes such other actions (including the negotiation, settlement,
compromise and enforcement of the insured's claim) as is necessary to realize
recovery under such policies and that all claim proceeds are deposited in the
appropriate Custodial P & I Account.
Section 4.04. Renewal of Primary Mortgage Insurance Policies.
----------------------------------------------
The Master Servicer may, subject to applicable law, direct any Servicer to
renew any Primary Mortgage Insurance Policy on any Mortgage Loan not insured by
the Mortgage Insurer that issued the Pool Insurance Policy which covered such
Mortgage Loan with a Primary Mortgage Insurance Policy issued by the Mortgage
Insurer which issued the Pool Insurance Policy relating to such Mortgage Loan.
ARTICLE V
ADVANCES BY MASTER SERVICER FOR P & I
ADVANCES, ATTORNEYS' FEES AND OTHER COSTS
Section 5.01. Recoverable Advances.
--------------------
The Master Servicer shall be required to make the following advances with
respect to Mortgage Loans to the extent the Master Servicer determines, in good
faith, that an advance made hereunder is recoverable from Insurance Proceeds,
Liquidation Proceeds or subsequent payments by the Borrower of the related
Mortgage Loans. In the event the Master Servicer determines that all, or a
portion, of any advance required by this Section 5.01 is not so recoverable, the
Master Servicer shall promptly deliver to the Trustee and to NMSC an Officer's
Certificate setting forth the reasons for such determination.
(a) Monthly P & I Advance. The Master Servicer shall make a Monthly P & I
---------------------
Advance to the Master Custodial P & I Account, in the amount, if any, of the
aggregate scheduled installments of principal and interest (less applicable
servicing fees) on the Mortgage Loans that were due on the Due Date but which
were not received or advanced by the Servicers and remitted to the Master
Custodial P & I Account on or prior to the Master Servicer Remittance Date. Each
Monthly P & I Advance shall be remitted in immediately available funds to the
Master Custodial P & I Account no later than the Master Servicer Remittance Date
for the month in which the Due Date occurs. Prior to the close of business on
the Master Servicer
-14-
Remittance Date, the Master Servicer shall determine whether and to what extent
any Servicers have failed to make any advances of principal or any interest in
respect to scheduled installments of principal and interest that were due on the
Due Date and whether such deficiencies, if advanced by the Master Servicer,
would be reimbursable from Insurance Proceeds, Liquidation Proceeds or
subsequent payments by the Borrower of the related Mortgage Loans.
(b) Advances for Attorneys' Fees. To the extent not made by the
----------------------------
Servicer, the Master Servicer shall make advances from time to time for
attorneys' fees and court costs incurred, or which reasonably can be expected to
be incurred, for the foreclosure of any Mortgage Loan or for any transaction in
which the Trustee is expected to receive a deed-in-lieu of foreclosure.
(c) Advances for Repairs and Restoration. In the event that any
------------------------------------
Mortgaged Premises shall be damaged or destroyed, and if the Servicer fails to
advance the funds necessary to repair or restore the damaged or destroyed
Mortgaged Premises, then the Master Servicer shall advance such funds and take
such other action as if necessary to repair or restore the damage or loss.
(d) Advances for Taxes and Insurance Premiums. To the extent a Servicer
-----------------------------------------
is required to advance funds sufficient to pay the taxes or insurance premiums
with respect to a Mortgage Loan pursuant to Section 980 of the Sales/Servicing
Agreement and the Servicer fails to make such advance, the Master Servicer shall
advance such funds and take such steps as are necessary to pay such taxes or
insurance premiums.
(e) Advances for Amounts Collected by Servicer but Not Remitted. In the
-----------------------------------------------------------
event that any Servicer fails to remit to the Master Custodial P & I Account on
or before the Master Servicer Remittance Date, the full amount of the funds in
the custody or under the control of the Servicer that the Servicer is required
to remit under its Sales/Servicing Agreement, then the Master Servicer, upon and
subject to the terms of this Article V, shall promptly advance and remit to the
Master Custodial P & I Account an amount equal to the required remittance.
Section 5.02. Non-Recoverable Advances.
------------------------
Any Monthly P & I Advance or other advance previously made by the Master
Servicer under this Section 5.01 which the Master Servicer shall ultimately
determine in its good faith judgment to be not recoverable from Insurance
Proceeds, Liquidation Proceeds or subsequent payments by the Borrower shall be a
Non-Recoverable Advance. The determination by the Master Servicer that it has
made a Non-Recoverable Advance shall be evidenced by an Officer's Certificate of
the Master Servicer promptly delivered to the Trustee and NMSC setting forth the
reasons for such determination. Following the Trustee's receipt of the
Officer's Certificate and NMSC's acceptance of such certification, the Master
Servicer shall be entitled to reimbursement for such Non-Recoverable Advance as
provided in Section 7.02 of these Standard Terms.
-15-
ARTICLE VI
PAYMENTS BY MASTER SERVICER
Section 6.01. General.
-------
The Master Servicer shall establish and maintain a Master Custodial P&I
Account into which the Master Servicer shall deposit payments, collections and
advances with respect to each Mortgage Loan until such amounts are transferred
to the Collateral Proceeds Account as provided herein. The Master Servicer may
elect to use a single Master Custodial P&I Account for more than one series of
Securities. Each separate Master Custodial P&I Account shall reflect the
custodial nature of the account and that all funds in such account are held in
trust for the benefit of the Trustee. In the event that Master Servicer does
not timely receive each installment of principal and interest in respect of any
Mortgage Loan, the Master Servicer shall advance funds as provided in Section
5.01 hereof.
Section 6.02. Deposits Into Master Custodial P&I Account.
------------------------------------------
On the 15th calendar day of each month (or the next preceding business day
if such 15th day is not a business day) the Master Servicer shall withdraw from
each Custodial P&I Account maintained by a Servicer and deposit into the Master
Custodial P&I Account an amount with respect to each Mortgage Loan serviced by
such Servicer equal to:
(a) All scheduled installments of principal and interest on the Mortgage
Loan received or advanced by the Servicer net of (a) Servicing Fees due the
Servicer and (b) any funds to be applied by the Trustee from the Buy-Down Fund;
(b) Any amounts in respect of a Mortgage Loan representing late payments
of principal and interest to the extent such amounts exceed outstanding
unreimbursed advances, if any, of the Servicer with respect to such Mortgage
Loan, net of Servicing Fees due the Servicer;
(c) Each principal prepayment (whether full or partial) on such Mortgage
Loans (net of Servicing Fees due the Servicer), together with any interest
applicable to such principal prepayments which has been paid by the Borrower;
and
(d) Any Insurance Proceeds (to the extent not applied to the repair or
restoration of the Mortgaged Property) or Liquidation Proceeds (net of Servicing
Fees due the Servicer).
Section 6.03. Withdrawals From Master Custodial P&I Accounts.
----------------------------------------------
On a daily basis, to the extent of amounts received in respect of a
Mortgage Loan from Insurance Proceeds, Liquidation Proceeds, or late payments
made by the Borrower, the Master Servicer may withdraw from the appropriate
Master Custodial P&I Account any amounts advanced by the Master Servicer for
principal and interest on such Mortgage Loan for which the Master Servicer is
entitled to reimbursement under these Standard Terms.
-16-
If at any time the funds in any Master Custodial P&I Account exceed the
limits of the FDIC insurance on such account, the Master Servicer shall promptly
withdraw such excess funds from such account and transfer such excess funds to
the appropriate Collateral Proceeds Account or a separate Master Custodial P&I
Account. Any funds deposited in a Master Custodial P&I Account, may be invested
to the next Master Servicer Remittance Date only in "Eligible Investments" as
defined in the Indenture.
On or prior to the Master Servicer Remittance Date, the Master Servicer, to
the extent not remitted prior to the Master Servicer Remittance Date, shall
remit from the funds in each Master Custodial P&I Account by wire transfer (or
as otherwise instructed by the Trustee) in immediately available funds to the
Collateral Proceeds Account an amount equal to the aggregate of the following:
(i) All scheduled installments of principal and interest on the
applicable Mortgage Loans received or advanced by a Servicer or the Master
Servicer that were due on the Due Date, net of (a) Servicing and Master
Servicing Fees due the Servicer and the Master Servicer, respectively, and
(b) any funds to be applied by the Trustee from the Buy-Down Fund;
(ii) All amounts received in respect of the applicable Mortgage
Loans representing late payments of principal and interest due to the
extent such amounts exceed outstanding unreimbursed advances, if any, of
the Servicer or the Master Servicer with respect to such Mortgage Loans,
net of Servicing and Master Servicing Fees;
(iii) Each principal prepayment (whether full or partial) on the
applicable Mortgage Loans, together with interest calculated to the end of
the calendar month during which such principal prepayment shall have been
received by the Servicer as required by Section 6.04 (including the portion
of the interest which shall have been paid by the Borrower and the
interest, if any, which shall have been paid by the Master Servicer
pursuant to Section 6.04 hereof), net of Servicing and Master Servicing
Fees; and
(iv) Any Insurance Proceeds in respect of such Mortgage Loans (to
the extent not applied to the repair or restoration of the Mortgaged
Property) or Liquidation Proceeds together with interest calculated to the
end of the calendar month during which such Insurance Proceeds or
Liquidation Proceeds shall have been received by the Servicer as required
by Section 6.04 (including the portion of the interest which shall have
been paid from such proceeds and the interest, if any, which shall have
been paid by the Master Servicer pursuant to Section 6.04 hereof), net of
Servicing and Master Servicing Fees.
Section 6.04. Payments for Additional Interest In Connection with Certain
-----------------------------------------------------------
Prepayments and Other Liquidations.
----------------------------------
In the event that any Mortgage Loan is paid in full following the 6th day
preceding the Master Servicer Remittance Date or partially prepaid, whether from
payment by the Borrower, Liquidation Proceeds, Insurance Proceeds or otherwise
and such prepayment in full or partial
-17-
prepayment does not include interest on the outstanding principal balance
through and including the last day of the month during which such prepayment is
made, then to the extent that such interest shall not have been paid by the
Servicer and deposited in the appropriate Custodial P & I Account on or before
the Master Servicer Remittance Date next succeeding the date of such full or
partial prepayment, the Master Servicer shall pay and deposit into the Master
Custodial P & I Account, on or before the Master Servicer Remittance Date of the
month in which such prepayment is remitted to the Trustee an amount equal to
such additional interest (net of Servicing Fees). Such payment will not be
considered a Non-Recoverable Advance; and in case of such payment, the Master
Servicer shall not be entitled to any recovery or reimbursement from the
Trustee, NMSC, or the Securityholders, but may seek and obtain recovery from the
Servicer that failed to make the payment through legal action or otherwise, to
the extent provided in the related Sales/Servicing Agreement.
In the event of any prepayment in full of any Mortgage Loan on or before
the 6th day preceding the Master Servicer Remittance Date, such prepayment shall
be deemed to have been made as of the last day of the preceding calendar month,
so that no interest will be deemed to have accrued on such Mortgage Loan with
respect to the calendar month in which the prepayment in full occurs and the
Master Servicer will not be obligated to deposit to the Master Custodial P&I
Account any interest actually accrued and paid on such Mortgage Loan with
respect to the calendar month in which such prepayment occurs.
Section 6.05. Payments for the Repurchase of Loans.
------------------------------------
In lieu of the Issuer providing a mortgage repurchase bond to secure the
Securities, the Master Servicer agrees to the following condition to secure its
obligation under Section 3.02 of these Standard Terms. Section 3.02
specifically requires the Master Servicer, upon a default or termination of a
Servicer under a Sales/Servicing Agreement, to assume the Servicer's obligations
under the Sales/Servicing Agreement, including the obligation to purchase
certain Mortgage Loans pursuant to Section 630 of the Sales/Servicing Agreement.
The Master Servicer's obligation to repurchase Mortgage Loans securing a series
of Securities is specifically limited to repurchase in the event that insurance
proceeds otherwise payable have been denied on the grounds of fraud and is
further limited at any one time to the First Year Repurchase Limit set forth in
the Master Servicing Agreement for the period ending one year from the date of
the Master Servicing Agreement (the "First Year"); to the Second Year Repurchase
Limit set forth in the Master Servicing Agreement (less any amounts already paid
by the Master Servicer under this Section 6.05) for the period beginning one
year from the date of this Master Servicing Agreement and ending one year
thereafter (the "Second Year"); to the Third Year Repurchase Limit set forth in
the Master Servicing Agreement (less any amount already paid by the Master
Servicer under this Section 6.05) for the period beginning two years from the
date of this Master Servicing Agreement and ending three years thereafter (the
"Third Year"); to the Fourth Year Repurchase Limit set forth in the Master
Servicing Agreement (less any amounts already paid by the Master Servicer under
this Section 6.05) for the period beginning three years from the date of this
Master Servicing Agreement and ending four years thereafter (the "Fourth Year");
and to the Fifth Year Repurchase Limit set forth in the Master Servicing
Agreement (less any amounts already paid by the Master Servicer under this
Section 6.05) for the period beginning four years
-18-
from the date of this Master Servicing Agreement and ending five years
thereafter (the "Fifth Year"). Any payments by the Master Servicer under this
Section 6.05 will not be considered a Non-Recoverable Advance. The obligations
of the Master Servicer under this Section 6.05 are further secured by the
Performance Letter. In lieu of a Performance Letter, or partially in lieu of a
Performance Letter, (i) the Master Servicer may put up cash into a fund held by
the Trustee, (ii) the Master Servicer may pledge an insurance policy
satisfactory to the Rating Agencies or (iii) the Issuer may structure into the
Securities a subordinated amount designated for this repurchase obligation.
Section 6.06. Payments for Losses due to Mortgagor Bankruptcies.
-------------------------------------------------
In lieu of the Issuer providing a mortgagor bankruptcy insurance policy,
the Master Servicer will pledge to the Trustee a Mortgagor Bankruptcy Fund to
protect against any losses to the Securityholders from the reduction of the
principal balance or interest rate on any Note by a bankruptcy court. To the
extent the Trustee draws on such Mortgagor Bankruptcy Fund, such loss will be
borne by the Master Servicer, and will not be considered a Non-Recoverable
Advance. The amount of the Mortgagor Bankruptcy Fund will be specified in the
Indenture for the Securities.
ARTICLE VII
COMPENSATION AND DISBURSEMENTS TO MASTER SERVICER
Section 7.01. Compensation to the Master Servicer.
-----------------------------------
As compensation for the services provided by the Master Servicer under the
Master Servicing Agreement, the Master Servicer shall be entitled to receive as
a monthly servicing fee in respect of each Mortgage Loan, payable from the
Master Custodial P & I Account, an amount equal to the product of the "Master
Servicing Fee Percentage" set forth in the Master Servicing Agreement multiplied
by the outstanding principal amount of each Mortgage Loan determined as of the
Due Date of the month prior to the month for which this fee is due, divided by
12. In return for its obligations under Section 6.04, the Master Servicer is
entitled to receive as additional compensation, any interest earnings on the
Master Custodial P & I Account, and any interest received on Liquidation
principal that is received in the same month that such Liquidation principal is
remitted to the Trustee. The Master Servicer is permitted to pay itself the
monthly servicing fee within five Business Days after the Master Servicer has
delivered to the Trustee the Monthly Remittance Report for such month; provided,
however, that the Master Servicer shall not be entitled to receive any monthly
servicing fee until the month during which the first Master Servicer Remittance
Date occurs.
Section 7.02. Authorized Disbursements from the Collateral Proceeds
-----------------------------------------------------
Account.
-------
Following receipt by the Trustee of the Officer's Certificate required by
Section 5.01(f) and NMSC's acceptance thereof, not later than five Business Days
following the Trustee's receipt of the Monthly Remittance Report from the Master
Servicer, the Trustee shall reimburse
-19-
or pay the Master Servicer or each Servicer, as appropriate, from the Collateral
Proceeds Account (or any other account established by the Indenture) to the
extent not previously reimbursed or paid, the amounts set forth below in the
following descending order of priority prior to the disbursement of any funds to
the Securityholders:
(a) Any advances made by the Master Servicer under the Master Servicing
Agreement that are Non-Recoverable Advances; and
(b) Any advances made by any Servicer under its Sales/Servicing Agreement
that are Non-Recoverable Advances.
ARTICLE VIII
REPORTS AND CERTIFICATE TO TRUSTEE
Section 8.01. Reports to the Issuer and Trustee.
---------------------------------
Not later than the day of each calendar month specified in Subsections (a)
or (b) below (or the previous Business Day if such specified day is not a
Business Day), the Master Servicer shall forward to the Issuer and the Trustee
the following statements and reports, each certified as true and correct by a
Servicing Officer:
(a) On or by the 16th day of each month, the Master Servicer shall notify
the Trustee of the amount of funds to be remitted by the Master Servicer to the
Trustee on the Master Servicer Remittance Date.
(b) On or by the 20th day of each month, the reports described in
paragraphs A, B, C, D and E on Exhibit B, together with an Officer's Certificate
---------
certifying that all such information is correct, and that the Master Servicer
has complied with all aspects of the Master Servicing Agreement.
The reports constituting the Monthly Remittance Report shall be current as
of the first day of such month. The Master Servicer shall use its best efforts
promptly to provide such reports to the Rating Agencies rating the Securities.
Section 8.02. Annual Officer's Certificate as to Compliance.
---------------------------------------------
The Master Servicer shall deliver to the Trustee on or before April 30 of
each year, an Officer's Certificate with respect to each Master Servicing
Agreement entered into by the Issuer, NMSC, and the Master Servicer on or before
the preceding December 31, certifying that (i) such Servicing Officer has
reviewed the activities of the Master Servicer during the calendar year or
portion thereof and its performance under each such Master Servicing Agreement,
(ii) to the best of such Servicing Officer's knowledge, based on such review,
the Master Servicer has performed and fulfilled its duties, responsibilities and
obligations under each such Master Servicing Agreement in all material respects
throughout such year, or, if there has been a default in the fulfillment of any
such duties, responsibilities or obligations, specifying each such default known
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to such Servicing Officer and the nature and status thereof, (iii) a Servicing
Officer has conducted an examination of the activities of each Servicer during
the preceding calendar year and its performance under the Sales/Servicing
Agreement, (iv) a Servicing Officer has examined each Servicer Fidelity Bond and
Servicer Errors and Omissions Policy and that such bond and policy are in effect
and conform to the requirements of the related Servicing Agreement and (v) the
Master Servicer has received from each Servicer such Servicer's annual audited
financial statements and other information as required by Section 111 of the
Sales/Servicing Agreement and (vi) to the best of such Servicing Officer's
knowledge, based on such examination, the Servicer has performed and fulfilled
its duties, responsibilities and obligations under its Sales/Servicing Agreement
in all material respects throughout such year, or, if such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof.
Section 8.03. Annual Independent Public Accountants' Servicing Report.
-------------------------------------------------------
The Master Servicer at its expense shall cause its independent certified
public accountants, which shall be a firm of national reputation, to furnish a
single statement to the Trustee and to the Issuer on or before April 30 of each
year relative to all series of Securities for which a Master Servicing Agreement
has been executed to the effect that such firm has examined certain records and
documents prepared by the Master Servicer relating to the Master Servicer's
performance of its obligations required by Articles Four and Five of the
Standard Terms to each Master Servicing Agreement entered into on or before the
preceding December 31, and that, on the basis of such examination, such firm is
of the opinion that the Master Servicer's activities have been conducted in
compliance with each such Master Servicing Agreement, except for (i) such
exceptions as such firm believes to be immaterial and (ii) such other exceptions
as are set forth in such statement. Such examination shall be performed using
various statistical sampling techniques to verify the performance or occurrence
of the following: (i) receipt of the detail and certification reports and the
custodial account reconciliation reports from the Servicers each month, (ii)
reconciliation and verification of the Servicer remittance each month, (iii)
reconciliation of the funds transferred to the Trustee by Bond Series, (iv)
receipt of a copy of the Servicer's Errors and Omissions Policy, Fidelity Bond
Policy and ACH Authorization forms, and (v) maintenance by the Master Servicer
of an Errors and Omission Policy in favor of [_________________] and a Fidelity
Bond Policy in favor of [________], which additionally names [______________] as
a named insured. In addition, such examination shall include inquiries of the
Trustee, to determine whether the Trustee has received (i) a report setting
forth the principal balance and monthly remittance amount for each loan by the
15th day of each month and (ii) funds due from the Master Servicer by the 20th
day of each month. Upon request by the Trustee, NMSC, or the Issuer, the Master
Servicer shall furnish to the Trustee copies of the audit report for each
Servicer as shall be required by the Sales/Servicing Agreement with such
Servicer.
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ARTICLE IX
MERGER OR CONSOLIDATION OF MASTER SERVICER; RESIGNATION
Section 9.01. Merger or Consolidation.
-----------------------
Anything herein to the contrary notwithstanding, any corporation into which
the Master Servicer may be merged or consolidated or any corporation resulting
from any merger or consolidation to which the Master Servicer shall be a party
or any corporation succeeding to the business of the Master Servicer shall be
the successor of the Master Servicer hereunder without the execution or filing
of any paper or any further act on the part of any of the parties hereto.
Section 9.02. Assignment or Transfer of Master Servicing Agreement.
----------------------------------------------------
The Master Servicer may, with the prior written consent of the Issuer,
NMSC, and the Trustee, assign or transfer all of its rights and obligations
under the Master Servicing Agreement, provided, however, that the Trustee shall
not consent to such an assignment or transfer unless it shall have received
written notice from the Rating Agency that rated the Series to which the Master
Servicing Agreement relates that such assignment or transfer will not result in
a reduction of the rating assigned by the Rating Agency to such Series.
Section 9.03. Resignation of Master Servicer.
------------------------------
The Master Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an opinion of counsel
to such effect delivered to the Trustee. No such resignation shall become
effective until the Trustee shall have assumed or a successor master servicer
shall have been appointed by the Trustee and until such successor shall have
assumed the Master Servicer's responsibilities and obligations under the Master
Servicing Agreement.
ARTICLE X
DEFAULT
Section 10.01. Events of Default by Master Servicer.
------------------------------------
The happening of any of the following events shall constitute a default
("Event of Default") by the Master Servicer under the Master Servicing
Agreement:
(a) Any failure on the part of the Master Servicer to make when due any
of the advances or to perform any other obligations required under Article V
above;
(b) Any failure on the part of the Master Servicer to make when due any
payment or to perform any other obligations required under Article VI above;
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(c) Any failure on the part of the Master Servicer duly to observe or
perform in any material respect any covenants or conditions (other than those
referred to in Section 10.01(a) and 10.01(b) above) to be performed or observed
by it in the Master Servicing Agreement which continues uncured for a period of
45 days after the date on which the Trustee shall have given to the Master
Servicer written notice of such failure and demanding that such default be
cured;
(d) Any involuntary petition in bankruptcy or any other similar petition
shall be filed against the Master Servicer seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future federal, state or other statute, law or
regulation, and shall remain undismissed for 60 days, or if any custodian,
trustee, receiver or liquidator of all or any substantial part of the assets of
the Master Servicer shall be appointed or take possession of such assets without
the consent or acquiescence of the Master Servicer and such appointment remains
unvacated for 60 days;
(e) The Master Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of, or relating to, the Master
Servicer, or all or substantially all of the Master Servicer's property;
(f) The Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(g) Any Rating Agency shall lower or give written notice to lower the
then current rating of the Securities because the existing or prospective
financial condition or mortgage loan servicing capability of the Master Servicer
is insufficient to maintain the then current rating of the Securities.
In case of any Event of Default, the Trustee or the Issuer upon written
approval of the Trustee may terminate all authority, power and rights of the
Master Servicer under the Master Servicing Agreement, and all rights, power and
authority of the Master Servicer shall automatically and without further action
by any Person pass to and be vested in the Trustee. Without limiting the
generality of the foregoing, the Trustee is hereby authorized and empowered to
execute and deliver on behalf of the Master Servicer, as the Master Servicer's
attorney-in-fact, any and all documents and other instruments, and to do or
accomplish all other acts or things that in the Trustee's sole and absolute
judgment may be necessary or appropriate to effect such termination.
Notwithstanding the foregoing, upon any such termination the Master Servicer
shall do all things reasonably requested by the Trustee to effect the
termination of the Master Servicer's responsibilities, rights and powers
hereunder, including, without limitation, providing to the Trustee all documents
and records reasonably requested by the Trustee to enable the Trustee or its
designee to assume and carry out the duties and obligations that otherwise were
to have been performed and carried out by the Master Servicer hereunder but for
such termination.
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Section 10.02. Other Remedies of Trustee.
-------------------------
Upon any Event of Default, the Trustee, in addition to the rights specified
in Section 10.01, shall have the right, in its own name and as "Trustee", to
take all actions now or hereafter existing at law, in equity or by statute to
enforce its rights and remedies, of the Securityholders (including the
institution and prosecution of all judicial, administrative and other
proceedings and the filings of proofs of claim and debt in connection
therewith). No remedy provided for by the Master Servicing Agreement shall be
exclusive of any other remedy, and each and every remedy shall be cumulative and
in addition to any other remedy and no delay or omission to exercise any right
or remedy shall impair any such right or remedy or shall be deemed to be a
waiver of any Event of Default.
ARTICLE XI
DUTIES OF THE MASTER SERVICER
Section 11.01. General Bond Administration.
---------------------------
The Master Servicer shall perform (or supervise the performance of) the
following duties on behalf of the Issuer (unless otherwise specified, references
in this subsection are to Sections of the Indenture and each capitalized term
used in this Section 11.01 and not otherwise defined shall have the meaning
ascribed to it in the Indenture):
(i) cause each Paying Agent other than the Trustee to execute and
deliver to the Trustee an instrument specifying the responsibilities of
such Paying Agent in accordance with the provisions of Section 9.03
(Section 9.03);
(ii) prepare and cause to be delivered to the Trustee the annual
written compliance statement (Section 9.09);
(iii) compensate and reimburse the Trustee pursuant to Section 7.07
(Section 7.07);
(iv) prepare (or cause to be prepared) any supplemental indenture or
amendment to the Indenture to be executed subsequent to the Closing Date
(and documents required to accompany them) as the Issuer or Trustee may
determine to be necessary or appropriate (Sections 10.01 and 10.02);
(v) prepare and deliver notices to the Trustee for execution as
necessary, distribute such notices and prepare such other information and
documents as may be required in connection with any optional redemption of
the Bonds (Sections 11.01, 11.03 and 11.04);
(vi) advise the Issuer with respect to any proposed removal of the
Trustee and, if a successor or additional trustee is to be appointed,
solicit and review bids, examine the qualifications of bidders, submit to
the Issuer a list of qualified candidates from which
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such appointment may be made by the Issuer and draft any notice required in
connection with the appointment of a successor trustee (Sections 7.10 and
7.11);
(vii) if a successor to the Bond Registrar is to be appointed
subsequent to the Closing Date, solicit and review bids, examine the
qualifications of bidders, and submit to the Issuer a list of qualified
candidates from which such appointment may be made by the Issuer (Section
3.05);
(viii) subsequent to the Closing Date, prepare, file, record or
deliver such continuation statements, instruments of further assurance and
such other instruments as required by Section 9.05 of the Indenture and
submit such instruments to the Issuer for execution and filing or delivery
and advise the Issuer when the Master Servicer becomes aware of a necessity
to take other action to protect the Trust Estate (Section 9.05);
(ix) cause all Opinions of Counsel required by Section 9.06 to be
prepared and delivered to the Issuer for delivery to the Trustee (Section
9.06);
(x) prepare documents necessary for the satisfaction and discharge
of the Indenture, submit such documents to the Issuer and (upon execution
by the Issuer) deliver and (as necessary) record such documents (Section
5.01);
(xi) prepare and deliver to the Issuer for distribution any
notifications required in connection with any election by the Issuer to
defease the Bonds (Section 5.01);
(xii) prepare all documents required in connection with any Grant
of Substitute Mortgage Collateral and submit such documents to the Issuer
for execution, obtain any Opinions of Counsel required in connection
therewith, and prepare any notices required in connection with the issuance
of a replacement Guaranteed Investment Contract and deliver such notices to
the Issuer (Section 3.11);
(xiii) prepare (or cause to be prepared) certificates or opinions
with respect to compliance with the Indenture and submit such certificates
or opinions to the Issuer for execution (Section 15.01 );
(xiv) prepare and cause to be filed all reports required to be
filed pursuant to Section 8.04 (Section 8.04);
(xv) compile and render all Accounting Reports, Interest Payment
Date Reports and Collateral Valuation Reports required pursuant to Section
12.09 (Section 12.09);
(xvi) cause to be delivered to the Trustee the Yearly Accountants'
Certificates (Sections 13.01(f));
(xvii) make any required corrections in Collateral Valuation and
Accounting Reports (Section 13.01(h));
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(xviii) cause to be delivered to the Trustee all Accountants'
Certificates, written instructions, and other documents required to
disburse excess funds or release Mortgage Collateral from the Trust Estate
(Section 13.05); and
(xix) notify the Rating Agencies of any events of which the Issuer
is required to give notice pursuant to the Indenture.
Section 11.02. REMIC Bond Administration.
-------------------------
With respect to a Series of Bonds for which the Issuer has made (or intends
to make) a REMIC Election, the Master Servicer shall perform (or supervise the
performance of), on behalf of the Issuer, the following duties relating to
federal, state, and local tax compliance of the REMIC:
(i) the preparation of and filing (after execution by the Issuer
or other person, as necessary) with the Internal Revenue Service or other
taxing authority any and all tax or information returns or reports required
to be filed by the REMIC Pool that are due after the Closing Date,
including any Forms 8281 (collectively, "Post-Closing Reports and Returns")
in the time and manner required by the Code, applicable regulations or
procedures thereunder, or equivalent provisions of state or local law;
(ii) the making of an election for the REMIC Pool to be treated as
a REMIC in the time and manner required by the Code or applicable
regulations or procedures thereunder;
(iii) the provision of advice and instruction to the Issuer as to
how to conduct the affairs of the REMIC Pool in a manner consistent with
applicable provisions of the Code and regulations thereunder in connection
with maintaining the status of the REMIC Pool as a REMIC (including with
respect to the termination of the REMIC and, in connection with the
termination of the REMIC, the preparation of a plan of liquidation of the
REMIC Pool at the appropriate time);
(iv) the acquisition and retention of ownership of a nominal
principal amount of any residual interest Bond or residual interest
certificate and the performance of the duties of the REMIC "tax matters
person" under the Code;
(v) the provision of advice and instruction to the Issuer with
respect to all requirements for any exemption from withholding (that the
Master Servicer reasonably believes to be available) of federal or state
income taxes with respect to the Bonds including the filing of any related
Post-Closing Reports and Returns and the acquisition
Section 11.03. Additional Bond Administration Rights and Duties of Master
----------------------------------------------------------
Servicer.
--------
The Master Servicer will provide such additional reports, statements and
other information relating to the Securities to the Issuer, the Trustee, or the
Securityholders, as may reasonably be requested by the Issuer.
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Section 11.04. Additional Costs Payable by Master Servicer.
-------------------------------------------
The Master Servicer will pay all Trustee's fees associated with the Series
Bonds and will bear all costs associated with the performance of the Master
Servicer's duties hereunder, including (but not limited to) accountants' fees,
attorneys' fees, internal costs, and costs associated with the Performance
Letter and the Pool Insurance Policies.
ARTICLE XII
MISCELLANEOUS
Section 12.01. No Assignment or Delegation of Duties by Master Servicer.
--------------------------------------------------------
Except as expressly provided in the Master Servicing Agreement, the Master
Servicer shall not assign or transfer any of its rights, benefits or privileges
under the Master Servicing Agreement to any other Person, or delegate to or
subcontract with, or authorize or appoint any other Person to perform any of the
duties, covenants or obligations to be performed by the Master Servicer
hereunder, without the prior written consent of the Trustee, and any agreement,
instrument or act purporting to effect any such assignment, transfer, delegation
or appointment shall be void. Notwithstanding the foregoing, the Master
Servicer shall have the right without the prior written consent of the Trustee
and hereby agrees to delegate to or subcontract with or authorize or appoint an
affiliate of the Master Servicer to perform and carry out any duties, covenants
or obligations to be performed and carried out by the Master Servicer hereunder.
In no case, however, except an assignment pursuant to Section 9.02 of these
Standard Terms, shall any permitted assignment relieve the Master Servicer of
any liability to the Trustee, NMSC, or the Issuer hereunder.
Section 12.02. Binding Nature of Agreement; Assignment.
---------------------------------------
The Master Servicing Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
Section 12.03. Entire Agreement.
----------------
The Master Servicing Agreement, which includes these Standard Terms and the
Sales/Servicing Agreement, contains the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements, understanding, inducements and conditions,
express or implied, oral or written, or any nature whatsoever with respect to
the subject matter hereof. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof.
Section 12.04. Amendments and Supplements.
--------------------------
These Standard Terms may not be modified, amended or superseded other than
by an agreement in writing among the Master Servicer, NMSC, and the Issuer which
has been
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approved in writing by the Trustee. The Master Servicer shall use its best
efforts promptly to provide notice to the Rating Agency if these Standard Terms
are so modified, amended or superseded.
Section 12.05. Controlling Law.
---------------
The Master Servicing Agreement and all questions relating to its validity,
interpretation, performance and enforcement, shall be governed by and construed,
interpreted and enforced in accordance with the laws of the Commonwealth of
Virginia, notwithstanding any Virginia or other choice-of-law provisions to the
contrary.
Section 12.06. Indulgences, No Waivers.
-----------------------
Neither the failure nor any delay on the part of a party to exercise any
right, remedy, power or privilege under the Master Servicing Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.
Section 12.07. Titles Not to Affect Interpretation.
-----------------------------------
The titles of paragraphs and subparagraphs contained in these Standard
Terms are for convenience only, and they neither form a part of these Standard
Terms nor are they to be used in the construction or interpretation hereof.
Section 12.08. Attorney's Fees.
---------------
If either party hereto shall bring suit against the other as a result of
any alleged breach or failure by the other party to fulfill or perform any
covenants or obligations under the Master Servicing Agreement or in any deed,
instrument or other document delivered pursuant hereto, or to seek declaratory
relief as to the rights or obligations of either party hereto, then in such
event, the prevailing party in such action shall, in addition to any other
relief granted or awarded by the Court, be entitled to judgment for reasonable
attorneys' fees incurred by reason of such action and all costs of suit and
those incurred in preparation thereof, at both trial and appellate levels.
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Exhibits to
Standard Terms to Master Servicing Agreement
--------------------------------------------
Exhibits Title
-------- -----
A Performance Letter
B Monthly Remittance Report
EXHIBIT A
PERFORMANCE LETTER
_____________, 19__
[Trustee]
[Address]
[Address]
Attn: ______________________
Re: Our Transferable Letter of Credit No. ____________
Section 6.05 of Standard Terms to Master Servicing Agreement
------------------------------------------------------------
Gentlemen:
By order of our client, [____________] (the "Master Servicer"), we hereby
open our Transferable Letter of Credit No. ____________ in favor of
"[_____________], Trustee", as the trustee under the indenture referred to in
the second paragraph hereof, for an amount not to exceed in the aggregate U.S.
$_____________ (_______________________ U.S. Dollars), effective immediately.
This Letter of Credit is relative to, but does not incorporate by such
reference, that certain indenture dated as of ___________________, 198_, as
supplemented by the Series Supplement dated as of ____________ 1, 198_, between
[Issuer] [NMSC] [(the "Issuer")] and you (the "Indenture").
Funds under this Letter of Credit are available to you as such trustee or
to your successor as such trustee under the Indenture (collectively, "Trustee")
to whom this Letter of Credit shall be transferred by you as hereafter provided
(collectively the "Trustee") against Trustee's sight draft(s) drawn on us,
mentioning thereon our Credit No. ___________. Each such draft must be
accompanied by Trustee's signed written statement to us, certifying (i) that the
officer executing
A-1
the certificate is a duly authorized officer of the drawer of the draft, (ii)
that the drawer of the draft is the Trustee under the Indenture and (iii) that
the amount of the accompanying draft represents the amount due and payable under
the Master Servicing Agreement dated as of ___________, 19__, between the Master
Servicer and, _______________ and the Issuer (the "Master Servicing Agreement")
for which Trustee is entitled to draw under this Letter of Credit because the
Master Servicer has not complied with the terms of Section 6.05 of the Master
Servicing Agreement.
We may at any time terminate this Letter of Credit upon at least sixty (60)
days prior written notice to Trustee delivered via registered mail specifying
that this Letter of Credit shall expire on a date not less than sixty (60) days
from the date such notice is delivered to Trustee, whereupon this Letter of
Credit shall expire on such date with the same effect as if such expiry date had
originally been set forth herein, provided, however, that upon Trustee's receipt
of such notification, Trustee will have a minimum of sixty (60) days to draw one
sight draft for the unutilized balance of this Letter of Credit, mentioning
thereon our Credit No. __________, and accompanied by Trustee's signed written
statement to us certifying (i) that the officer executing the certificate is a
duly authorized officer of the drawer of the draft, and (ii) that the drawer of
the draft is the Trustee under the Indenture.
This Letter of Credit may be transferred in its entirety for the then
relevant amount to your successor as trustee under the Indenture, and said
transfer will become effective upon our receipt at our ____________ office, New
York, New York, Attention: _____________________ of (a) the original of this
Letter of Credit, and (b) our transfer form properly filled out and signed by
you. If we receive here Trustee's sight drafts(s) and statement(s) in
conformity with the terms and conditions hereof, we will honor the same by
payment in immediately available funds upon the due presentation and delivery of
such documents. Where any date mentioned herein shall fall on a day when our
said office is closed for business, such date shall be extended to 3:00 p.m. New
York time on the next following day on which such office is open for business.
We hereby agree to provide written notice to you of any change in the
rating of our commercial paper.
The Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1983 Revision), International Chamber of Commerce
Publication No. 400, and, to the extent not inconsistent with said Uniform
Customs, the laws of the State of New York, including the New York Uniform
Commercial Code.
Very truly yours,
_______________________
Authorized Signature
A-2
EXHIBIT B
MONTHLY REMITTANCE REPORT
The Monthly Remittance Report forwarded to the Issuer and the Trustee for
Mortgage Loans will set forth the information set forth below.
A. Calculation of the monthly remittance to the Trustee (including
payments of principal and interest and all other cash adjustments) (i)
for each Mortgage Loan, and (ii) for all Mortgage Loans in the
aggregate.
B. The aggregate remaining scheduled principal balance of the Mortgage
Loans.
C. The calculation of the Master Servicing Fee due for the current month.
D. For any uninsured loss, a schedule setting forth the loan number, the
Borrower's last name, the amount of the uninsured loss and an
explanation;
E. If requested by the Issuer, for any principal prepayment (curtailment
or liquidation), a schedule setting forth the loan number, Borrower's
last name, the amount of the principal prepayment, and, if a
curtailment, whether such curtailment is deemed to have been paid
prior to the first day of the remittance month.
F. Calculation and required balance of the Month-End Reserve Fund.
B-1
